Reading Into The NewsFirstly, hats off to the company for providing a clear and concise plan moving forward. Nice to see clearer communication and expecting it to continue. Now that it's in black and white there can be no excuses.
Drilling:
Any of the "old timers" here who have attended AGM's have heard management disuss the future expansion of Rose as well as the other showings and their belief that there is at least Rose size tonnage through expansion and drilling. I have discussed this with other Geologists (non company related) that know this area well and state that their is a Very high probability that this is true. Eric always states that Critical is going to be a Large supplier of lithium to the marketplace and although Rose is an amazing sellable asset they will only become a large supplier through expansion.
First Nations:
The company has agreements signed with the Cree and apparently has a great relationship with them. If you don't have a great relationship with the First Nations anywhere in Canada forget ever getting a project off the ground. If the Cree didn't like this project or had a beef with management believe me when I say we would have publicly heard about it by now which is comforting.
Engineering Studies:
Results from the engineering study for a chemical plant to produce lithium hydroxide monohydrate will be released in the second quarter of this year. This will obviously cause a hike in the already huge re-rating of the next FS.
The company states that they will release the updated feasibility study in the second quarter. I expect a large increase in our NPV hence a substantial re-rating.
Potential Catalysts:
The Comex permit that everyone has been waiting for will comfort the institutions enough to jump in due to the lowered risk.
Takeaways:
Personally I have been waiting for the announcement of the drill program a long time and find this very exciting. If they are able to double or even better the present tonnage it would take some simple math to determine how that would play out in the NPV.
I am also excited to see the results fo the hydroxide engineering study as that will also play into the NPV
Let's remember that the present FS came out 5 years ago with VERY conservative numbers especially as it relates to todays pricing. We are in for a substantial re-rating and the markets will take notice. Take a look at the present Belle of The Ball (Frontier Lithium), their FS shows pricing 80% higher than Cre's with an IRR of 21% compared to CRE at 34.9%
With an updated FS and an increased resource and Hydroxide plant Cre could very realistically have an NPV approaching 4 billion dollars.
Lots of possible partnership eyes will be on this release today and with the lithium insanity out there takeover eyes too.
Tons of news coming in the second quarter (which starts now) so should be very exciting!