European Lithium (ASX:EUR) said its unit, Critical Metals unit has signed a letter of intent for an offtake agreement with REalloys, according to a Thursday filing with the Australian bourse.

Under the deal, Critical Metals will supply 6.8 million metric tons of rare earth concentrate from its Tanbreez project, the filing said.

The parties are working towards definitive documentation, the filing added.

Shares of the company rose past 18% on market close.