Rose Lithium Tantalum Project and Offtake Agreements set the stage for Critical Elements interest
Critical Elements Corp. (TSXV: CRE | OTCQX: CRECF) is a Canadian junior mining company in the development stage. The Company’s flagship project is the Rose Lithium-Tantalum Project located in James Bay, Northern Quebec, Canada. The project is in a good geographic location with access to on-site infrastructure such as power, roads, airport, railway and a camp. The Rose property comprises 500 claims spread over a 26,100 ha area. Critical Elements also have several other exploration projects, some of these are being farmed out to other companies under buy in agreements. These projects offer exposure to many key metals such as more lithium, cobalt, copper, nickel, zinc, gold, silver and platinum group elements.
Lithium and tantalum
Emerging as critically important resources, lithium and tantalum are expected to see unprecedented demand in the near future. Lithium mining is a leading industry supporting three separate billion-dollar industries – smart phones, electric vehicles and energy storage. Goldman Sachs calls “lithium the new gasoline.” They forecast 22% electric vehicle penetration by 2025, and lithium demand for all EV applications could grow more than 11 x by that year. Tantalum is an element found in everyday lives, as it improves technology and material performance. Its many applications include uses in electronics, medicine, engineering and energy generation.
Rose Lithium-Tantalum project
The 100% owned Rose Lithium-Tantalum project Feasibility Study from October 2017 was based on a conventional truck and shovel open pit operation and a conventional milling process. The mill will process 1.61 m tonnes of ore per year to produce an annual average of 236,532 tonnes of technical and chemical grade spodumene concentrates and 429 tonnes of tantalite concentrate. It will have an average operating costs of $66.56 per tonne milled. The ore zones are open at depth and a future underground operation is possible. The anticipated construction time to start production is 21 months. The life of mine is 17 years, and the average strip ratio is 7.2 tones of stripping per tonne of ore. The post-tax NPV8% was C$ 726 m, with an internal rate of return of 34.9%.
Critical Elements has a market cap of C$ 112.5 m. The chart below shows how Critical Elements compares to its more advanced peers, thereby showing the potential if the Company can progress further.
Get our daily investorintel update
Near term catalysts include the Rose Stage 2 Feasibility Study results, which are due H2, 2018; and any announcements regarding off-take or project financing. Added to this will be permitting in H1, 2019. If all goes well the Company plans to be in production by H2, 2020.
The Rose project is well advanced and set to rapidly move forward as soon as off-takes have been arranged and project financing is in place. At current valuations there is good opportunity for potential profit once those steps are complete. The Rose deposit of lithium and tantalum are one of the purest available in the world.
Critical Elements Corporation is well positioned with a quality lithium-tantalum resource at Rose, several other early stage projects, a mining friendly jurisdiction, a strong Feasibility Study result, and several near term catalysts. One to watch, especially if a large off-take agreement takes place.
Matthew Bohlsen holds a Graduate Diploma in Applied Finance and Investment (similar to CFA), and a Graduate Diploma in Financial Planning. He has 30 years ... <Read more about Matthew Bohlsen>