Critical Elements' Rose project delayed by a year

23rd April 2013

By: Henry Lazenby

Creamer Media Deputy Editor: North America


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TORONTO ( – Quebec-based project developer Critical Elements has moved the expected first production from its flagship Rose project, in Quebec, out by about a year, as it was focused on securing a deal with an offtake partner, which, in turn, would enable the junior to better negotiate financing to construct the mine.

Speaking to Mining Weekly Online on Tuesday, president and CEO Jean-Sébastien Lavallée said the tough financial markets had set the project back “a bit”.

Critical Elements in October told Mining Weekly Online it expected to finalise a bankable feasibility study (BFS) for the Rose project by the first quarter. However, this study was now only expected late in the fourth quarter, which meant that production, originally slated for 2015, would now probably only start in 2016, Lavallée, a third-generation miner, said.

The company had so much confidence in its resource that it had progressed the project to a BFS after completing a preliminary economic assessment (PEA) in November 2011.

“We do not want to dilute the company too much to advance the project, that’s why we are this year focusing on offtake,” he said in a telephonic interview.

Lavallée also pointed out that, if the company had too many shares outstanding by the time it needed to engage potential financiers to construct the Rose project, it would be more difficult to secure reasonable financing.

Critical Elements would use the C$1.6-million it had recently raised through an unbrokered private placement, to this year construct a trial plant at the project site, with which it would produce larger samples of high-purity lithium carbonate and tantalum to engage potential offtake partners with.

Lavallée explained the main focus this year was to advance discussions with potential offtake partners, and once a deal had been reached, it would place the company in a much better position to negotiate the financing needed to construct the mine and lithium carbonate plant.

He noted the lithium and tantalum markets were relatively unaffected by the recent tumultuous gold market, and other commodity markets. Electric- and hybrid-vehicle adoption was on the rise, as well as energy-storage projects in Asia, which created an enormous demand for high-purity lithium.

The Rose project is expected to be an openpit operation mining ore at an average rate of 4 600 t/d, or 1.5-million tons a year. The estimated resource comprises 24.3-million tons grading 0.89% lithium oxide and 132 parts per million tantalum pentoxide (Ta2O5).

The Rose PEA estimated a total of 452 306 t of lithium carbonate and 3.5-million pounds of Ta2O5 to be produced over the expected 17 year life of the mine. The mine carries a price tag of about C$268-million, and at a minimum price of $6 000/t of lithium and a nominal price of $118/lb of tantalum, the project carried a net present value of $488-million, using an 8% discount.

The TSX-V-listed junior’s stock traded 6.67% higher on Tuesday at C$0.16 a share.

Edited by Creamer Media Reporter



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