European Lithium Shares Surge on Major Buyback and Strategic Positioning

European Lithium Limited has announced a substantial share repurchase initiative, signaling strong confidence in its current valuation. The program, authorized to acquire up to 135 million shares, represents approximately 10% of the company’s issued capital and carries a value of around A$12.6 million. Scheduled to commence on October 17, the buyback will continue through the end of March 2026.

Chairman Tony Sage stated that the board is firmly convinced the present share price fails to reflect the intrinsic value of the company’s assets. This conviction is partly rooted in European Lithium’s strategic holding in Critical Metals Corp, an investment that alone carries a market valuation of approximately A$678 million.

Unprecedented Single-Day Rally

The market responded to the buyback announcement with immense buying pressure. On Monday, the company’s stock price experienced a dramatic surge, climbing an extraordinary 127 percent to reach A$0.25. Trading volumes soared to record levels as investors reacted to the clear signal from management: they believe the shares are significantly undervalued at current prices.

The Critical Metals Advantage

The bullish sentiment is further fueled by strategic developments at Critical Metals Corp, in which European Lithium holds a 60 percent stake. Critical Metals has secured pivotal partnerships in the United States, including a Letter of Intent with REalloys Inc. for the supply of up to 6.75 million tonnes of rare earth concentrate from the Tanbreez project in Greenland.

Should investors sell immediately? Or is it worth buying European Lithium?

Key developments include:
* Pre-Sold Production: Combined with a prior agreement with Ucore Rare Metals, a quarter of the planned output from the Tanbreez project is now committed to U.S. customers.
* U.S. Strategic Importance: Leonard Sternheim, Chairman of REalloys, highlighted the project’s relevance, noting the significance of “heavy rare earths for the U.S. defense industry.”
* Near-Complete Acquisition: Critical Metals has increased its ownership stake in the Tanbreez project from 42% to 92.5%, with European Lithium retaining a direct 7.5 percent interest.

Geopolitical Significance of Rare Earths

The Tanbreez project is increasingly being viewed as a strategic geopolitical asset. Amid reports of U.S. government interest in securing supplies of critical minerals and given Greenland’s strategic location, European Lithium is well-positioned within the global race to establish independent supply chains for these essential materials.

The company’s potential to benefit from rising demand for critical minerals—driven by the defense and clean energy sectors—appears strengthened by these recent offtake agreements with American partners. The finalization of the Tanbreez ownership restructuring, expected by November 2025, is poised to be the next significant milestone.

For investors, European Lithium offers a unique dual exposure to the critical minerals sector: direct lithium production from its Wolfsberg Project in Europe, combined with rare earths exposure through the Tanbreez investment. The management’s decision to initiate a major share buyback serves as a powerful statement of their belief that the current market price substantially undervalues the company’s true worth.