Epstein-Research Blog | CEO Interview: Critical Elements Corp., Lithium Junior Worth Watching | Talkmarkets
Founder, Chairman, CEO, President, Treasurer, Analyst at Mockingjay, Inc.
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In 2011 Peter Epstein, CFA, left a $3 billion hedge fund where he was a senior natural resources analyst to help increase awareness of a number of natural resource companies in which he's invested in. 


CEO Interview: Critical Elements Corp., Lithium Junior Worth Watching

Date: Friday, December 18, 2015 2:35 PM EST

CEO Interview: Critical Elements Corp., Lithium Junior Worth Watching

By: Peter Epstein, CFA, MBA   http://EpsteinResearch.com   @peterepstein2 

The following exclusive interview of Jean-Sébastien Lavallée, President & CEO of Critical Elements Corp, was conducted by phone and email over the four days ended December 17th. All dollar amounts are in CAD$.

Critical Elements Corp. (TSX-V: CRE) (US OTCQX: CRECF) is a junior lithium company with a promising project in northern Quebec, backed by the its Preliminary Economic Assessment, “PEA. Lithium is one of the only metals/minerals experiencing increased demand, as evidenced by higher lithium carbonate & hydroxide prices this year. Critical Elements is in the right place at the right time, poised to advance its Rose Lithium-Tantalum project. Management believes that the Company has been de-risked due to the recent signing of a comprehensive Collaboration Agreement with a leading global chemical company.

Screen Shot 2015-12-17 at 10.27.20 PM

Management has been resolute in keeping equity dilution to a minimum. For instance, cash burn is just $125k per quarter. Critical Elements is in discussions with various parties regarding a potential capital raise that, if consummated, is expected to include a meaningful debt component. Further evidence of a strong management team can be found in the hiring of Mr. David J. Buckley as Chief Processing Operator

Mr. Buckley has very extensive experience in the lithium space. Most recently, from 2006 to 2015, he was Senior Process Engineer for Rockwood Lithium Inc, where he was heavily involved in end-products including lithium carbonate, hydroxide & chloride. Prior, Mr. Buckley was Process Engineer for FMC Lithium from 1992 to 2004. [Bios of Management & Board]

“With his many years of experience in the lithium processing industry with companies like FMC  and Rockwood, Mr. Buckley brings expertise to the proper execution of each step necessary for the successful ramping up of lithium carbonate production at the Rose Lithium-Tantalum project, with anticipated optimal capital and operating costs,” said Jean-Sébastien Lavallée, President & CEO. 

Please describe Critical Elements Corp. to readers unfamiliar with the story 

Critical Elements Corp. (TSX-V: CRE) (US OTCQX: CRECFis an emerging specialty metals (lithium, tantalum, rare earths) company focused on the Rose Lithium-Tantalum project in northern Quebec. Besides battery-grade lithium, the project benefits from a rare source of low-iron spodumene concentrate, ideally suited for the Glass & Ceramic markets. As well, we hope to become one of the few new sources of conflict-free tantalum in the world. The project is supported by roughly $200 million of key infrastructure, including a road with 100 Metric tonne “Mt” capacity. There’s a nearby airport, power line, and Hydro-Quebec camp 30 kms away. Therefore, a significant amount of infrastructure that we would have had to build is readily available. Our PEA spotlights a high purity, low-cost lithium [99.98% Purity] opportunity with a post-tax NPV(8%) & IRR of $279 million & 25%, and a pre-tax NPV(8%) & IRR of $488 million and 33%. 

Most important, we recently struck a Collaborative Agreement with a leading, global chemical company. This agreement includes a 100% take-or-pay off take clause. The agreement grants the Partner an option to buy a 25% direct interest in the Rose Lithium-Tantalum project for 25% of the cap-ex. Our Partner will contribute valuable technical assistance and commercial knowledge through to commercialization.

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