The funding will come via convertible notes provided by a firm called Magna and converting (at Magna's behest) at any time at a price of at least 30c per share.

An initial $2.5 million is available with the balance to come European Lithium's way upon milestones being reached.

The convertible notes are secured against the assets of the project.

European Lithium aims to complete a feasibility study by April next year.

The ASX-listed company pointed to prefeasibility work completed this year that pointed to a project with a net present value of $442 million.

The company started the current quarter with cash of about $3.2 million.

Shares in European Lithium were trading this week at 16c, capitalising the company at $87 million.