Critical Elements Corporation (CRE) is a Canadian mining exploration company focused on Rare Earth Elements and metals, lithium and gold exploration and production in Quebec and British Columbia. Two of its projects, the Rose–Tantalum-Lithium and the Croinor are at advanced stage of exploration and have the potential to catapult Critical Elements into a major rare earths player.

The Rose deposit hosts significant lithium and rare-element mineralization. According to a recent preliminary economic assessment conducted by GENIVAR, the potential NPV of the project is about C$488.36 million – the company’s current market cap of ~C$17 million is roughly 4% of this total. In addition, another consulting company, Golder, computed the potential value of the company’s Croinor gold project at about C$4.5 million in 2009. In that assessment Golder had assumed an average gold price of $950/oz. Gold prices have run up to ~$1,700/oz since that time which implies that there is even further upside to this estimate.

Aside from these two projects, CRE has additional interests in Quebec and British Columbia making the company a compelling multi-metal player. Its multi-commodity focus mitigates the commodity cycle downturn risk and at the same time gives it an opportunity to benefit from the strong fundamental growth factors for the rare earths, lithium and gold.

We have valued CRE using the sum of the parts valuation methodology by summing the individual values of the Rose and Croinor projects. We have arrived at a fair value of C$1.518, a significant upside of 848.9% over the last traded price of C
.160 per share.