Shares in European Lithium surged more than 33% on Friday after the company unveiled plans for an on-market buy-back of up to 135-million ordinary shares, representing about 10% of its issued capital.

Based on the company’s September 30 closing price, the buy-back would cost about A$12.6-million. European Lithium said it intended to start the programme no earlier than October 17 and no later than March 31, 2026, subject to market conditions.

Executive chairperson Tony Sage said the board believed the company’s stock was undervalued relative to its assets.

“The board believes the company’s current share price does not reflect the underlying value of the company’s assets. The current market value of the company’s holding in Critical Metals Corp is approximately A$678-million at yesterday’s closing price. In the board’s view, the buy-back therefore represents a fantastic opportunity to buy shares back at a significant discount and add value to our remaining shares on issue,” Sage stated.

Evolution Capital will manage the buy-back, which will be conducted within the “10/12 limit” permitted by the Corporations Act 2001 and therefore does not require shareholder approval.

The announcement comes a day after European Lithium and its US-listed affiliate Critical Metals secured a pathway to majority control of the Tanbreez rare earths project in southern Greenland.

Critical Metals has amended its agreement with project founder Gregory Barnes and Rimbal to increase its ownership stake in Tanbreez from 42% to 92.5% by issuing 14.5-million Critical Metals shares. European Lithium will retain a 7.5% minority interest. The transaction, which still requires Greenland government approval, is expected to close in October or November.

“This significant milestone agreement with Mr. Greg Barnes and Rimbal positions us to be laser focused on bringing this world-class asset into production. Greg is a significant shareholder of Critical Metals and is aligned with our long-term success. We look forward to continuing to leverage his deep technical expertise and decades of project knowledge as we advance our development strategy,” said Sage.

Barnes added that Tanbreez could transform Western supply chains. “The Tanbreez project is a game-changer for the rare earths supply chain in the West, with a significant concentration of high-grade heavy rare earth elements and gallium contained within the estimated 4.7-billion-tonne host rock,” he commented.

Shares in European Lithium traded at A$0.12 on Friday, up A$0.03, or 33.3%.