E3 in Globe and Mail Today Following recent underperformance, Echelon Capital Markets analyst Michael Mueller thinks E3 Metals Corp. (
) offers “compelling” near-term upside and sees a “catalyst-rich” year ahead.
“We believe E3 is in a position to outperform its peers in the near-term after a period of relative underperformance in 2H21 and a number of material milestones expected in 2022, which we believe will garner attention to the Company’s PEA-level Clearwater lithium brine project in Alberta,” he said. “With advancements being made on its DLE prototype and a potential resource update in the near-term, (in our view) the market should begin to ascribe more value to E3′s significant resource base with E3 currently trading at just $20 per metric ton versus peers at over $200/Mt.”
Expecting the lithium sector to continue to see increased activity “through advancing new development projects, M&A, and capital investments” and projecting prices to remain at multi-year highs, Mr. Mueller nominated Calgary-based E3 for Echelon’s “Q122 Top Picks Portfolio” list.
“With demand for battery-quality lithium expected to substantially increase before the second half of this decade, E3 is positioning itself to be a top-tier North American provider of lithium hydroxide monohydrate (LHM), a key component of lithium-ion batteries used in electric vehicles,” he said. “Having a substantial 100-per-cent owned resource base at approximately 7.0Mt lithium carbonate equivalent (LCE) in mining-friendly Alberta and a propriety DLE (direct lithium extraction) technology being developed in-house, E3 is unique among many of its lithium brine peers without having to outsource the technology and thereby truncating the potential project economics.”
“E3 has a number of impactful catalysts on the horizon over the coming 12 months, including (1) optimization of its DLE technology in 2022 including results from ongoing long-run sorbent testing at the Lab-Pilot Prototype and commissioning of its Field-Pilot Prototype; (2) drilling two to three “virgin” wells in H122 on its Clearwater property which will be pump tested and provide critical dynamic data to better under stand the aquifer response and a foundation for a potential resource update from Inferred to Measured and/or Indicated as well as potentially producing brines with lithium grades above 100 mg/L; (3) further flowsheet derisking following data gathered from the DLE Lab-Pilot and future Field-Pilot; and (4) initial LHM production expected in H222 in concert with its Field-Pilot DLE Prototype.”
Mr. Mueller maintained a “speculative buy” recommendation and $5 target for E3 shares. The average on the Street is $4.57.
E3 METALS CORP
2.79+1.82 (187.63%)