Source: Critical Elements Lithium.

The TSX, TSXV, CSE and NEO exchanges list over 4,000 companies, which is a daunting number for any investor to sort through.

Parsing prospective opportunities from also-rans begins with narrowing down your investable universe, leaving only companies whose value propositions mark a clear path forward.

In the interest of expediting that task for TMH readers, our new series, Anatomy of a Flagship Asset, seeks to introduce you to the most promising projects and products making waves in the Canadian stock market.

A $2B gem in Quebec’s James Bay region

Our first company is Critical Elements Lithium (CRE), whose Rose Lithium-Tantalum Project in James Bay, Quebec, an open-pit mining and froth flotation operation, intends to supply the glass and ceramics industry, and battery manufacturers focused on e-mobility, which exposes it to staple as well as leading-edge revenue streams.

The project offers estimated average annual production of:

  • 51,369 tonnes of technical spodumene concentrate (6 per cent Li2O)
  • 173,317 tonnes of chemical-grade spodumene concentrate (5.5 per cent Li2O)
  • 441 tonnes of tantalite concentrate

Over an expected life of mine of 17 years, this affords Rose an after-tax NPV of US$1,915 million (8 per cent discount rate) and an after-tax IRR of 82.4 per cent, with average price assumptions of US$1,852 per tonne chemical grade lithium concentrate, US$4,039 per tonne technical grade lithium concentrate, and US$130 per kg tantalum pentoxide (Ta2O5).

Future catalysts

Given the dependable need for glass in an ever-modernizing world, and the fact that 16.5 million electric vehicles roamed the roads in 2021, triple the amount in 2018, Critical Elements is positioned to benefit as fossil fuels fall out of favour and the company seeks to meet a rising demand for lithium across the globe.

With positive stock price momentum over the past two years, less than 21 months remaining to the start of production, according to management estimates, and Q1 2022 EV sales up 75 per cent YoY, the time is right for a thorough due-diligence process evaluating a potential allocation.

Critical Elements Lithium (CRE) is up by over 87 per cent over the past year.

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