The European Lithium Ltd (ASX: EUR) share price has been a strong performer on Thursday.
At the time of writing, the ASX lithium stock is up 12% to 5.6 cents.
This is despite many of its peers, such as Core Lithium Ltd (ASX: CXO), tumbling deep into the red today.
Why is this ASX lithium stock surging?
Investors have been buying the company's shares this morning after it released an announcement relating to the Wolfsberg Lithium Project in Austria.
According to the release, Bayerische Motoren Werkte Aktiengesellschaft, which is better known as BMW, has transferred funds of US$15 million to ECM Lithium, a wholly owned subsidiary of Critical Metals Corp (NASDAQ: CRML).
European Lithium holds approximately 67.8 million shares in Critical Metals. This represents approximately 83% of its outstanding stock and values its investment at approximately US$723.3 million.
BMW's funds transfer is in relation to the offtake of battery grade lithium hydroxide (LiOH) from the Wolfsberg Lithium Project. This is to be offset against LiOH delivered to the auto giant in the future.
Commenting on the news, the ASX lithium stock's chairman, Tony Sage, said:
This is a huge milestone for the Wolfsberg project which now paves the way for the next financing steps
What is Critical Metals?
Critical Metals is a leading mining company focused on mining critical metals and minerals.
It was formed earlier this year when European Lithium completed a business combination between the ASX lithium stock and Sizzle Acquisition Corp. Commenting at the time on the business combination, Sage said:
The Company is thrilled to announce completion of the transaction that brings Critical Metals to life and supports the future commercialisation of the Wolfsberg Project on Nasdaq.
With access to US capital markets and funds raised in the process of the listing, we believe that Critical Metals is well positioned to become a key supplier for the lithium-ion battery supply chain in Europe. Critical Metals' future success as a Nasdaq listed company is also expected to create a significant increase in shareholder value for EUR shareholders.
The ASX lithium stock notes that the Wolfsberg Lithium Project is the first fully permitted mine in Europe and is strategically located with access to established road and rail infrastructure to become the next major producer of key lithium products to support the growing demand for electric vehicles (EVs) and Europe's burgeoning lithium-ion battery supply chain.
