European Lithium Limited (ASX: EUR) has announced that their ASX trading has been halted today. The halt was implemented following the company’s decision to seek additional capital from the Australian Securities Exchange and other sources, including potentially further debt and/or equity offerings.
The company cites its need for extra capital stemming from its ongoing acquisition of Wolfsberg Lithium Project in Styria, Austria. Wolfsberg is the largest permitted lithium mine in Europe and, as a consequence, is a major asset for the company as they look to capitalize on the growing demand for lithium in the euro region.
Investors should note, however, that the halt in trading will remain until such time that the funding arrangements are clarified. The company has also stated that the halt is in accordance with ASX Listing Rule Chapter 17.3.
The decision to seek additional capital follows the company’s steady progress with the Wolfsberg Project throughout this year, including the completion of restructuring agreements and the sale of their Zukovje and Nehaj projects in Slovenia.
European Lithium has been focused on maintaining liquidity and minimising dilution of its core shareholding, as its financial position stabilises. This comes after the company reacted to the uncertainty in the market caused by the COVID-19 pandemic, which has affected not just ASX listed companies but also businesses of all sizes across the world.
At the time of the halt in trading, the company had an issued equity capital of 368.8 million ordinary shares at an issue price of A$0.028, equating to a market capitalisation of roughly A$10.3 million.
The Wolfsberg Lithium Project is anticipated to contribute to the growing lithium industry in Europe and could result in Europe becoming a significant lithium supplier in the 2019 to 2020 timeframe.
For investors looking to capitalise on the potential of the project, however, they will need to wait until the ASX trading halt is lifted – at the earliest this could happen in the new year. European Lithium will continue to update the market on progress as it seeks to secure additional capital.
