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E3 Metals: Strike Before The Iron Is Hot

Feb. 19, 2021 5:47 AM ETE3 Lithium Limited (EEMMF), ETL:CA16 Comments


  • E3 is currently in the exploration stage of their first lithium project, located in Alberta, Canada.
  • The company is developing a proprietary extraction method that will allow it to operate with industry-leading margins and convert a relatively impure resource to battery-grade certifications.
  • Production at the site is likely to begin towards the start of 2026, following the release of a DFS and the acquisition of necessary capital.
  • The company operates under significant risk as this will be its first source of revenue, so if they are unable to validate their production goals the company faces bankruptcy.
  • I believe that E3 will ultimately prove successful in their endeavors and have set a price target of $8.55 per share by the end of 2024.

E3 Metals (OTCQX:EEMMF) is a Canadian-based junior lithium miner. Focused solely on the extraction and production of lithium chemicals, E3 has staked its future on the success of the metal. With the company’s only project still under development, the company has a high ceiling for its growth. However, with the high upside potential afforded by this unique situation comes with greater risk as well. Without any sales to date, E3 maintains a high risk as the development of their mine is not yet complete. With the recent release of the company’s preliminary economic assessment (“PEA”) results for their project, I am now able to form a cohesive thesis for the company. This article will aim to balance the risk associated with E3 with the company’s potential upside growth.

Company Profile

E3 Metals is currently in the development stage of a project in Alberta, Canada. The Leduc Reservoir is estimated to have reserves of 6.7 million tonnes of lithium reserves. In terms of output, the project is expected to produce 20,000 tonnes of lithium hydroxide each year over the course of its 20-year life. In terms of the rest of the industry, this is a fairly significant amount for just one mine. Analysts expect global production figures in the neighborhood of 297,000 tonnes for 2021, meaning E3 would account for just about 6.7% of that market.

When the company will bring their mine into production is still up in the air, but I will discuss my expectations in the following section. For now, I would like to remain focused on the company’s current operations and assets. E3 is pioneering a proprietary extraction method that the company is referring to as direct lithium extraction, or DLE. DLE is currently only utilized by Livent (LTHM), a company I’ve recently covered, which recently

This article was written by

Long Term Tips profile picture

I tend to focus on long-term stock ideas, oftentimes rooted in tech or EVs. I have been a casual investor for years with solid returns and want to share what I have learned with others who may find value in my thoughts.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in EEMMF over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (16)

goldbug58 profile picture
Bought some Allkem (OROCF), formerly Orocobre, at $6.19 (US); also looked at Sigma Lithium, but shares been running hot so waiting for consolidation.
goldbug58 profile picture
C$17.0M Cash on balance sheet as of 3 Nov. Pilot prototype initial testing showed 97% lithium recovery. No PFS released in 2021. Scaled in at $1.85 (US) for long-term.
Any insight into share price collapse since this article?
@Richard Dietzen They are changing CFOs every couple of months...
High yields hit this speculative Lithium miner harder
Daniel oaklandpark profile picture
@cpick8979 I don't understand how high yields affect this company or stock?
15 Jun. 2022
@Daniel oaklandpark higher yields should mean higher discount rates. Think NPV 8 is now NPV 12... Doesn't mean that has to be fair value, but to cp's point that and the Goldman article are probably pressuring speculative growth companies (aka junior miners).

I am surprised you did not mention Standard Lithium at all. SLL is also doing DLE from Brine located in Arkansas. SLL is 12 to 18 months ahead of E3 - but they only own 40% of their current project. SLL’s market value is double E3s. They are both are targeting 20,000 tons in Phase 1.

@All about the return does SLL have EDRs?
blucrab profile picture



This is a great write-Because the reservoir is an old oil and gas reservoir called the Leduc, which has already been exploited once, there is some chance the permitting process could be expedited from the 2024-25 time frame. The exception to that would be if the process creates a concentration of undesirable elements. However, oil and gas extraction already allowed this mixture of similar elements to be re-injected into the reservoir.

David Jennings profile picture

Some day these brine suckers are going to decide it's time to frack .....

blucrab profile picture

@David JenningsTHAT MAY BE AN 'END GOAL' -

Daniel oaklandpark profile picture

@David Jennings

What does that mean, they are going to be to fracking for oil? or is this a fracking for lithium?
David Jennings profile picture

@Daniel oaklandpark Just say'n, they are mining brine in the same way they mine for oil. For oil, when the primary recovery is depleted the field production can be extended by fracking and water flooding. Probably not very likely, but if it does prove economical for some particular field I wonder if the Anti-Frackers will raise any fuss.

blucrab profile picture


BUTT - CK LLKKF! -this is the beauty of technology
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