Critical Metals To Acquire European Lithium In All-Stock Deal, European Lithium Shareholders To Receive 0.035 Shares Of CRML Per Share

Critical Metals Corp. (NASDAQ:CRML) ("Critical Metals Corp." or the "Company"), a leading critical mineral mining company, today announced the signing of a letter of intent whereby Critical Metals has proposed to acquire all of the outstanding shares of European Lithium Ltd. (ASX: EUR) ("European Lithium") (the "Proposed Transaction"). Under the Proposed Transaction, European Lithium shareholders will receive 0.035 shares of Critical Metals for each European Lithium share held (the "Exchange Ratio"). Based on the Exchange Ratio and considering the unaffected closing price of Critical Metals and the US Dollar to Australian Dollar exchange rate on April 22, 2026 (the "Measurement Date"), the total aggregate consideration payable to European Lithium equity holders is approximately US$835 million.

The Proposed Transaction is subject to the signing of a definitive agreement.

Strong Rationale for the Proposed Transaction

The Proposed Transaction is a logical combination that has a compelling strategic rationale and is expected to create value for Critical Metals shareholders.

Minimize Critical Metals Dilution and Increase Critical Metals Public Float: European Lithium owns 45,536,338 shares of Critical Metals (the "Cross-holding Shares"), representing approximately 34% of Critical Metals outstanding shares as of the Measurement Date. As of the Measurement Date, the Cross-holding Shares had a market value of US$540 million without considering any potential control block value premium. Upon completion of the Proposed Transaction, Critical Metals intends to cancel the Cross-holding Shares which will substantially reduce the associated Critical Metals shareholder dilution resulting from the Proposed Transaction yet materially increase Critical Metals' public float which is expected to augment Critical Metals' already strong trading liquidity profile.

Consolidation of Tanbreez Ownership: European Lithium owns 7.5% of the Tanbreez Rare Earth Project in Greenland ("Tanbreez") and following completion of the Proposed Transaction, Critical Metals is positioned to consolidate 100% of Tanbreez, which will simplify the ownership, decision making and financing strategy for Tanbreez as it is advanced towards a development decision.

Fortification of Critical Metals' Balance Sheet: European Lithium has a cash balance of approximately AUD$306 million (approximately US$219 million) as of March 31, 2026, and Critical Metals, which currently has a standalone cash balance of approximately US$124 million, will have a robust balance sheet to accelerate the development of Tanbreez into a strong rare earth market that requires new sources of heavy rare earth elements from Western allied nations. In addition, excluding the Cross-holding Shares, European Lithium currently holds marketable securities with a market value of approximately US$11 million.

Transaction Benefits for Critical Metals Shareholders

Improved Capital Markets and Optimal Pro Forma Ownership
Removes overhang from regular block trade dispositions of Critical Metals shares by European Lithium at significant discounts to the prevailing market price
Critical Metals' expected cancellation of the Cross-holding Shares substantially reduces the associated shareholder dilution resulting from the Proposed Transaction, yet materially increases Critical Metals' public float, which is expected to augment Critical Metals' already strong trading liquidity profile
Removal of Large Shareholder
Removes a shareholder with 34% ownership from the shareholder register and puts control of Critical Metals in the market, which may make Critical Metals more attractive to future potential strategic investors and/or future potential acquirers
100% Ownership of Tanbreez
Positioned to consolidate 100% ownership of Tanbreez by acquiring European Lithium's 7.5% stake
Peer Group-Leading Balance Sheet Strength
Provides substantial additional cash from European Lithium to advance the development of Tanbreez and other projects

 

Proposed Transaction

The Proposed Transaction will be implemented by way of two interdependent Schemes of Arrangement in relation to European Lithium's shares and listed options respectively.

European Lithium's outstanding shares will be exchanged for Critical Metals shares at the Exchange Ratio.

European Lithium's outstanding listed options ("EUR Options") will be transferred to Critical Metals in exchange for a number of Critical Metals ordinary shares equal to the Exchange Ratio times the Cashless Exercise Shares. "Cashless Exercise Shares" means a number equal to (i) the excess of Per Share Value over the exercise price per EUR Option divided by (ii) the Per Share Value. "Per Share Value" refers to an amount equal to the Critical Metals' share pricing based on a 20-day VWAP prior to the transaction closing date times the Exchange Ratio.

European Lithium's zero-dollar exercise price unlisted options ("ZEPOs") will be treated as follows:

The ZEPO tranches (totaling 90,000,000 ZEPOs) consisting of: (i) 45,000,000 ZEPOs vesting upon European Lithium's VWAP exceeding A$0.50 for 20 consecutive trading days, and (ii) 45,000,000 ZEPOs vesting upon the European Lithium's VWAP exceeding A$0.60 for 20 consecutive trading days will be cancelled in consideration for newly issued Critical Metals ordinary shares, with the number to be issued calculated using the Exchange Ratio; and

 

The remaining ZEPO tranches (totaling 180,000,000 ZEPOs) consisting of: (i) 45,000,000 ZEPOs vesting upon European Lithium's VWAP exceeding A$0.70 for 20 consecutive trading days, (ii) 45,000,000 ZEPOs vesting upon the European Lithium's VWAP exceeding A$0.80 for 20 consecutive trading days, (iii) 45,000,000 ZEPOs vesting upon European Lithium's VWAP exceeding A$0.90 for 20 consecutive trading days, and (iv) 45,000,000 ZEPOs vesting upon European Lithium's VWAP exceeding A$1.00 for 20 consecutive trading days will be exchanged for newly issued economically equivalent securities issued by Critical Metals (with the quantum of such securities calculated by multiplying the number of ZEPOs by the Exchange Ratio), with such Critical Metals securities having the same vesting conditions (subject only to adjustments in the case of share price targets, calculated by multiplying the various share price targets by the inverse of the Exchange Ratio) and the same expiration dates as the existing ZEPOs.

 

Completion of the Proposed Transaction is conditional upon a number of items, including, without limitation, the negotiation and entering into of a binding Scheme Implementation Deed, approval of the shareholders of European Lithium, European Lithium having a net cash and liquid assets balance of not less than AUD$330,000,000, the holders of unlisted options and ZEPOs entering into cancellation deeds to give effect to the treatment of those securities as set out above, no material adverse change in European Lithium and Critical Metals business and assets and of any prescribed occurrences or regulated events, receipt of all necessary regulatory approvals, consents, waivers or modifications and court approvals and completion of satisfactory due diligence by both parties. European Lithium has agreed to an exclusivity period during which it will not solicit or initiate enquiries or, subject to certain exceptions, participate in any discussions or negotiations relating to any other acquisition proposals, or issue any debt, equity, or equity-like securities.

The above description of the Proposed Transaction is not complete and is qualified by the definitive agreement providing for the Schemes of Arrangement if such agreement is entered into. All Critical Metals shareholders are urged to read the respective Schemes of Arrangement and relevant disclosure documents once they become available as they will contain additional important information about the Proposed Transaction.

The Proposed Transaction is expected to be completed in the second half of 2026. If a definitive agreement is reached, a scheme meeting of the shareholders of European Lithium is expected to be held in the third quarter of 2026 to approve the Proposed Transaction.