Epstein Research Reports on Critical Elements Rose Lithium-Tantalum Project

A recent report by Epstein Research highlighted Critical Elements (TSXV:CRE,OTCQX:CRECF,FWB:F12) as an emerging specialty metals company, focused on its Rose Lithium-Tantalum project in northern Quebec.
As quoted in the report:

The Company’s very promising RL-T project is backed by a Preliminary Economic Assessment (“PEA”) [see pages 9-12] and very strong (current) LC prices, up from about US$5,500/Mt in October 2015 to a reported $20,000+/Mt today. Importantly, Critical Elements is no newcomer to the lithium scene, it has been advancing its RL-T project since late 2009. A total of 181 drill holes totaling 26,500 meters have been drilled to date. Out of the 181 drill holes, 175 returned significant mineralized values.
Assuming a LC price of US$6,000/Mt, the PEA highlights a NPV(8%) & IRR of C$279 million & 25%, respectively. The NPV(10%) is C$223 million. The assumed USD/CAD FX rate in the PEA is at parity. However, if today’s C$ 0.77 FX rate were to be incorporated, the NPV (in C$ dollars) would be much higher. Management also points out that the Company has made noteworthy improvements in recoveries since the PEA was done. Spodumene recovery is around 90% at a grade of 6.4% Li2O, and a robust 94% recovery on the carbonation process for Li2CO3. The industry average is around 80% for spodumene and 85% for carbonation.
Therefore, I believe that the Company’s stock has tremendous room to run, especially if management can lock down non-dilutive funding. Critical Elements Corp. (TSX-V: CRE) (US OTCQX: CRECF) is a company worth watching. The stock price has already begun to move, but the valuation is still cheap given the fundamental strength in lithium prices and company specific attributes that make it less risky than global lithium peers at similar stages of development. Critical Elements’ PEA is strong, possibly with room for improvement from a much more favorable FX rate and stronger reported lithium recoveries.

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