European Lithium (ASX:EUR) said Nasdaq-listed Critical Metals, formed after the company's merger with US special purpose acquisition company Sizzle Acquisition, completed a private placement, raising nearly $22.5 million, according to a Friday filing with the Australian bourse.

Critical Metals, in which EUR holds a 74.3% stake, will use the funds raised to develop its Tanbreez Rare Earth Project in Greenland and the Wolfsberg Lithium Project in Austria, the filing said.

Under the terms of the securities purchase agreement, Critical Metals will issue around 4.5 million ordinary shares at an offer price of $5.00 per share, the filing added.

The company will also issue warrants to purchase an equal number of shares at a strike price of $7.00, expiring in four years and the shares sold are subject to resale registration rights, the company said

Shares of European Lithium fell 5% in recent Friday trade.