E3 Lithium Ltd V.ETL

Century Lithium Financial Study Released This Morning

[Loughatorick]

Century Lithium is a Canadian comany that has operated a DLE pilot plant in south western Nevada for the past two years. They extract lithium from clay using a leaching process, and later emloy a DLE process to extract the lithium from the leaching acid.

Their financial study of their proposed production plant was released with an internal rate of return of 17 % over the 40 year life of the project, based on an average selling lithium selling price of $ 24.000/tonne.USD for battery grade Lithium Carbonate. The NPV of the project is over $ 3 Billion using a discount rate of 8 %.

LCE's stock dropped in value by 34 % today. 
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ETL will be issuing their PFS in the next few months and I don't want ETL's share price to drop because of assumptions used in their PFS study.

My first recommendation is to use an ultra-conservative LiCO seliing price. I realize that the forecast selling price of lithium will be much higher than the current selling price on the assumption that consumers and industry will be sifting their focus to an EV world. However, using a selling price that is approximately 70% higher than the current selling price of Lithium (as LCE has) doesn't ring true with most investors.

SLI used $ 30,000 LiCO selling price and produced a study that showed decent returns of capital. However, investors want to invest in projects that have short payback terms, and with current LiCO prices in the $ 15,000/tonne range, investors see nothing but operating losses for the first few years of operations.

LCE's $ 24,000 LiCO selling price is more realistic, but still approximately 70 % greater than the current market value of LiCO. I fear that investors will shy awy from this project. 

On a similar vein, restrict the project to one plant (think of a super-sized pilot plant) , large enough to generate a good profit, but not require the large amount of CAPEX needed to build the most economical plant, and with a finite life (say 20 years). 

LCE's has calcualted an initial CAPEX in excess of $ 1.5 Billion USD....I think there are few investors with this type of capital. If ETL can keep the CAPEX to less than $ 1 Billion, I think E3 will have a much better chance of bringing their Clearwater project to fruition.
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https://www.prnewswire.com/news-releases/century-lithium-announces-positive-feasibility-study-for-the-clayton-valley-lithium-project-nevada-302129324.html

https://www.northernminer.com/financial-matters/century-lithium-falls-after-clayton-valley-feasibility/1003866775/

[MrPeters]

Great article, room for thought. Sure wish the insiders would start buying!  gl

[LiLuv66]

I just don't see Century as a good comparison to E3. E3 Lithium's Direct Lithium Extraction (DLE) process significantly reduces production time compared to traditional methods, aligning with market demands for quicker extraction. Their success with DLE indicates potential for sustainable and efficient lithium extraction, crucial for the battery industry's growth. The upcoming DLE Pre

[MrPeters]

My concern for the near future is if prices remain lower and the EV market is stalling. Even with a good PFS release, Getting Capital will become a big problem, even if for just one plant. Everything could be shelved until more favorable times. I certainly hope I am wrong. I kant afford the time nor the $$$$$ tied up. Gl 

[MrInvest]

If we don't get a bump in share price this year, I am selling and moving on. I can't have my capital tied up for years awaiting the plant to be built. I sure am kicking myself for not selling at $5.8. 

[PuerSimia]

Don't worry so much, it's not a disaster;-)  More favourable times (prices) are forcast for ~2027. Since it takes years to bring new production online, the time to build is before 2027. E3's timing could be bang on. JMHO.