European Lithium’s new CEO will guide transition to near-term lithium producer
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09:29 10 May 2018
The company aims to begin production in 2020 from the Wolfsberg project in Austria.
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Dietrich Wanke’s operational experience will be invaluable in the transition
European Lithium Ltd (
ASX:EUR) expects that newly appointed CEO Dietrich Wanke will successfully guide the company in its transition from lithium explorer to producer.
The company is well advanced on the path to beginning production from its Wolfsberg Lithium Project in Austria in 2020.
The new CEO has extensive operational experience, which will help facilitate this process.
READ: European Lithium promotes Dietrich Wanke to CEO
Following is an interview conducted last week by the Austrian-based Börse Social Network Club with the new CEO Dietrich Wanke and European Lithium’s non-executive director Stefan Müller.
Q: What were the reasons for the board of directors to appoint Dietrich as the new CEO?
Müller: We have followed a clear and linear process of progress since the commencement of the 'internal' PFS in spring last year, with the aim to produce lithium in the near future.
We have taken a big step in the right direction by completing the PFS, where the former CEO Steve Kesler played an instrumental role.
European Lithium is no longer an exploration company with the achieved and expected drilling results.
Changed requirements
By appointing Dietrich as CEO, we are taking into account the significantly changed requirements for the company.
We now need Dietrich's many years of experience in setting up and commissioning mine projects.
Furthermore, we are converting the Austrian GmbH, whose managing director Dietrich has already been for two years, into an AG, so it was consistent to make him CEO of the parent company.
He has also built up the entire team in Wolfsberg and knows the mine better than anyone else.
READ: European Lithium zone II drilling results pave way for increase in lithium resources at Wolfsberg
Q: What are the next steps towards production?
Wanke: The last ‘formal’ act is the completion of the definitive feasibility study (DFS).
We are getting corresponding offers and expect the order to be placed at the beginning of the third quarter.
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In parallel, we are drilling the zone I required for the JORC code and completing the drill program in zone II.
We expect to be able to determine a resource size of over 20 million tonnes and we anticipate the start of production in 2020.
Due to the exploration work in the 80s, we already have an intact mining structure on which we can easily build and which gives us a clear picture of the geological conditions in the mountain.
Capital requirements
Q: The production launch will cost money. What numbers do you expect? And will this be possible without a capital raise or will you turn again to investors?
Müller: We expect a further capital requirement for the DFS of max €15 million but do not plan to obtain these funds through another capital raising.
The costs of the drilling programs are mostly paid for or the corresponding funds available.
Since the positive completion of the PFS at the latest, we have been on the radar of many potential lithium buyers in Europe and are already engaged in concrete discussions about potential partnerships.
A pre-financing of the DFS could be a possible component of such a partnership among other models.
Although we understand the current impatience of shareholders, we will now take time to make these very important strategic decisions.
Industry interest
European Lithium is receiving great interest from industry and also in the setting of the European Battery Alliance, for example, where we are present in high-level meetings as one of the very few European potential producers.
The costs of getting the mine ready for production will not be financed through capital raising but as it is common in the industry, through partnerships, financings, subsidies, grants or, in the case of a takeover, entirely by third parties.
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Q: In the past few days, all three directors have bought European Lithium and Cape Lambert shares respectively, there is quite a positive news flow and the outlook seems good - why is the stock currently not moving?
Müller: On the one hand, commodity and, above all, lithium stocks have been under pressure worldwide in recent weeks, on the other hand, our shareholders still expect news in the shortest possible intervals.
These will no longer exist from now on, as the drilling is largely completed or will no longer provide any real news.
The task of the management team is to make the best possible decisions for the shareholders, and since this depends on some of the largest companies in the industry, the process takes time. Some investors draw wrong conclusions and sell.
Exciting time for EUR
The next weeks and months will be very exciting for our company and we are sure that the European Lithium share price development will be more than pleasant for shareholders in the future.
Already now, based on an official resource size, which is probably only about a third of what is expected from the latest drilling results, both PFS and research report of First Berlin show results significantly higher than current prices.
If hard facts in the form of partnerships are added, the stock market should reward this.
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