Guess which ASX lithium share is rocketing 18% on a new deal with BMW

a man and woman agreeing to a deal with a handshake

a man and woman agreeing to a deal with a handshake

The biggest ASX lithium shares are all edging higher in late morning trade.

But one small-cap lithium stock is leaving them far behind.

Shares in European Lithium Ltd (ASX: EUR), with a market cap of some $143 million, are soaring 18% at the time of writing, having earlier posted gains of more than 34%.

This comes after the ASX lithium share emerges from yesterday’s trading halt, which it requested “pending an announcement regarding offtake arrangements.”

That announcement was released this morning when European Lithium reported on a deal with Bayerische Motoren Werke (ETR: BMW).

And ASX investors have taken note.

ASX lithium share rockets on agreement with BMW

European Lithium reported it has signed a non-binding memorandum of understanding (MOU) with BMW, securing its first offtake of battery grade lithium hydroxide (LiOH).

The MOU will see European Lithium and BMW cooperate in negotiations for “suitable commercial terms” for BMW to purchase LiOH from the ASX lithium share. BMW will have the first right to purchase 100% of the LiOH produced from the identified resources.

Commenting on the MOU, Tony Sage, European Lithium chair, said, “Securing our first offtake with BMW AG is another key milestone for the company. Partnering with BMW AG is an ideal fit for EUR”.

European Lithium said no assurance is given that the non-binding MOU will progress to a binding contract.

Should the parties agree to a binding contract, BMW will pay US$15 million upfront. European Lithium will repay that through equal set offs against the LiOH it delivers to BMW.

The ASX lithium share said it will use the proceeds from the prepayment to develop its Wolfsberg Project. That includes supporting the commencement of the construction phase.

European Lithium stated:

Securing its first offtake is a key milestone allowing the company to focus on the final steps of development and implementation of the Wolfsberg Project while it looks to the future and builds a portfolio of prospective battery metals projects located in Europe.

How has European Lithium been performing?

Though European Lithium has struggled this year, down 31% in 2022, the ASX lithium share remains up 60% over the past 12 months.

For some context, the All Ordinaries Index (ASX: XAO) is down 7% since this time last year.

The post Guess which ASX lithium share is rocketing 18% on a new deal with BMW appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now

See The 5 Stocks
*Returns as of July 7 2022

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];[property] = defaultValue;

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);

More reading

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended BMW. The Motley Fool Australia has recommended BMW. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s