RE:Shaw on CRE Lithium
Critical Elements (CRE.V. last at $2.05)
CRE has fallen with the rest of the sector as lithium prices in China came under pressure at the same time that the broader market indexes did (smells to me like momentum money leaving). Importantly, CRE’s project has little to do with the lithium market in China because CRE’s lithium is not bound for China. If I’m right about the play here, CRE’s lithium should be bound for a battery factory somewhere in North America, with those batteries being used in EVs bound for North American or European markets. I recently read that the US wants something like 2/3 of new car sales to be EVs by 2032 while Canada has an equally ambitious goal of 60% by 2030. Combine that kind of government inertia, with government funding, in the midst of an “onshoring” theme for critical minerals and little CRE starts looking pretty tasty. With permits, low impurities, a choice location/jurisdiction, and impressive base-case economics I don’t worry about CRE’s future as a lithium supplier. Not all projects are created equal and I think that CRE gets funded and built in this cycle, so I continue to own it for exposure to the EV theme and have added recently despite the terrible chart. The stock is sitting on its 200-day moving average here, so a guy like me could believe/hope that level will act as support until CRE finds a dance partner.