Critical Metals Replaces Fixed Exchange Ratio With Floating Scale in European Lithium Scheme

by Maya Okafor · August 19, 2026

Deals & Listings Reporter, The SmallCap Signal

Critical Metals Corp. (Nasdaq: CRML) said Wednesday it has amended the terms under which it proposes to acquire European Lithium Limited (ASX: EUR; FRA: PF8; OTC: EULIF), replacing the fixed share exchange ratio announced in April and carried into the definitive scheme implementation deed announced May 18 with a floating scale that moves inversely to Critical Metals' own share price. The change is disclosed in a company press release dated Aug. 19, 2026.

Under the amended arrangement, European Lithium shareholders would receive 0.045 new Critical Metals shares for each European Lithium share if Critical Metals' volume-weighted average price is at or below US$8.00, and 0.025 new shares if the VWAP is at or above US$16.00. Between those two thresholds the ratio adjusts on a straight line. The measurement window is 20 consecutive Nasdaq trading days ending on the second Nasdaq trading day before the Share Scheme Meeting, according to the release.

As of the announcement, the company said the maximum ratio of 0.045 would currently apply, because the 20-day VWAP up to the last Nasdaq trading day before the announcement sits below the US$8.00 floor. That is meaningfully more consideration than the original deal contemplated: the terms announced April 27, and carried into the definitive scheme implementation deed announced May 18, set a fixed 0.035 ratio. European Lithium's own announcement of the amendment, as reported by Kalkine, describes the change as "an increase of approximately 28.6% compared with the previous fixed ratio of 0.035."

Critical Metals closed Wednesday's session at $6.17, up two cents or 0.33%, giving it a market capitalization of about $906.3 million on 146.89 million shares outstanding, according to StockAnalysis. The stock's 52-week range runs from $5.12 to $32.15, a spread that gives some measure of the volatility the amended pricing mechanism is addressed to.

Mike Hanson, a board director who leads the special committee overseeing the transaction, said in the release that "the amended terms reflect the continued commitment of both companies to completing this combination in a way that protects securityholders on both sides equitably against short-term market volatility."

The transaction is structured as two interdependent court-approved schemes of arrangement under Australian law, covering both European Lithium's ordinary shares and its listed options. Consideration for the option scheme and for European Lithium performance rights is calculated by reference to the same share scheme transaction ratio, so the floating mechanism flows through to those instruments as well.

On timing, Critical Metals said the scheme booklet is expected to be dispatched in early September 2026, with implementation targeted for October 2026. Neither date has occurred, and neither is assured. The schemes remain conditional on approval by European Lithium shareholders and optionholders and on court approval. The definitive deed announced in May also carried conditions including European Lithium maintaining net cash and liquid assets of not less than A$330 million, receipt of necessary regulatory approvals, consents and waivers, and no material adverse change at either company. That deed had already been amended once, on July 3, 2026, in changes the company said did not alter the agreed scheme consideration, the principal conditions to completion or the strategic rationale. If the conditions are not satisfied, the schemes may not proceed.

The strategic logic has not changed since April. Critical Metals holds the Tanbreez rare earth project in Greenland and the Wolfsberg lithium project in Austria. European Lithium owns 7.5% of Tanbreez, so consolidating it would take Critical Metals to full ownership of that asset. The April 27 announcement valued the aggregate consideration at approximately US$835 million based on an April 22, 2026 measurement date, and disclosed that Critical Metals intends to cancel 45,536,338 cross-holding shares that European Lithium owns in Critical Metals — a block the company said represented approximately 34% of Critical Metals' outstanding shares as of that measurement date.

That cancellation is the structural offset to the dilution the schemes create, and it is the reason the deal is not a straightforward share issuance. Critical Metals said in April that cancelling the cross-holding would reduce dilution to its own holders while expanding its public float. Mining.com.au, reporting on the amended terms, said European Lithium shareholders are expected to own approximately 38% of the combined Critical Metals group after implementation, subject to confirmation of updated calculations.

The other item the April release put on the table was cash. European Lithium held approximately A$306 million — about US$219 million — in cash as of March 31, 2026, plus roughly US$11 million in marketable securities, excluding the cross-holding shares. For an acquirer whose principal assets are a permitted but unbuilt lithium mine in Austria and a large undeveloped rare earth deposit in Greenland, that balance is a material part of what is being acquired.

That is also part of the context for Critical Metals' own funding position. In a Form 6-K filed March 13, 2026 covering the half year ended Dec. 31, 2025, Critical Metals reported a net loss of $120.4 million, driven substantially by non-cash items including an $80.1 million warrant fair-value loss and $18.7 million of share-based payments, alongside $14.7 million of finance costs and $9.5 million of listing costs. Cash stood at $80.9 million, up from $7.3 million at June 30, 2025, following $85 million of PIPE financings and $23.4 million from warrant exercises. That filing stated that substantial doubt exists about the company's ability to continue as a going concern within one year after the date the financial statements are available to be issued.

Critical Metals also disclosed a post-period settlement announced March 5, 2026: a $40 million equity-based settlement with GEM to resolve disputes. Resolving a liability in stock removes a claim but adds shares, and it sits alongside the new shares the European Lithium schemes would issue.

Nothing about the amended ratio is final. The 0.045 figure applies only because the VWAP measured to the day before the announcement sits under US$8.00; a rally in Critical Metals shares during the 20-day measurement window ahead of the scheme meeting would mechanically reduce the number of shares European Lithium holders receive. The floor and ceiling are fixed; the ratio between them is not.

The next disclosure that will matter is the scheme booklet itself, expected early next month, which European Lithium has said will include an independent expert's report. Until then, the deal remains an agreement to propose schemes, not a completed acquisition.