StockPotentials December 15, 2011

Transcription

1 December 15, 2011 Price (Close: December 15, 2011) $ Week High-Low $2.23-$0.43 Shares O/S million Market Cap $131.4 million 50-day Average Volume 539, day Average Volume 1,092,800 Year-End December 31 Symbol TSX: CLQ Website CANADA LITHIUM CORP. Financial Data 12 months 12 months C$ 000' Dec-10 Sep-11 Selected Income/(Loss): General and Administrative (2,886) (3,845) Net Loss (3,459) (3,455) Selected Balance Sheet: Cash 17, ,876 Mineral Properties 13,807 26,249 Current Liabilities 2,637 3,577 Shareholders' Equity 30, ,117 Total Assets 32, ,762 Selected Cash Flows: Investing (8,501) (21,025) Financing 11, ,925 Shares O/S, 000' 167, ,532 Key Indicators and Multiples Monthly OpEx Burn (mos.) Price/Cash 8.3x 1.3x Price/Mineral Property 10.4x 5.5x Price/Book Value 4.7x 1.0x, eresearch estimates eresearch Analysts: Yuri Belinsky, B.A., M.A. Bob Weir, B.Sc., B.Comm., CFA Note: Report was prepared with public information only. COMPANY PROFILE Canada Lithium Corp. ( Canada Lithium or the Company ) is a Canadian-based resource exploration and development company focused on its wholly-owned Quebec Lithium Project. INVESTMENT HIGHLIGHTS Canada Lithium has just issued an updated NI resource estimate for the Quebec Lithium Project. According to the estimate, the project contains 33.2 million tonnes in M+I resource at 1.19% Li 2 O; The Company is transitioning into a developer and producer status - in Q3/2011 it started the site construction. Full production at 20,000 tonnes of Li2CO3 annually at the Quebec Lithium Project is expected by the end of 2013; Metallurgical tests of samples from the project produced battery-grade lithium carbonate. The Company has an agreement with Japan s Mitsui and Co. Ltd. to market its future product; The Quebec Lithium Project is located in a mining friendly community close to Val d'or, Quebec. The project has good infrastructure. eresearch Corporation 100 Adelaide Street West, Suite 407 Toronto, Ontario M5H 1S3 Telephone: Toll-Free:

2 QUEBEC LITHIUM PROJECT Resource Estimate: In October, 2010, Canada Lithium published a resource estimate for its Quebec Lithium Project. In February, 2011, the Company appointed Roscoe, Postle & Associates ( RPA ) to have a preliminary independent review of the October 2010 resource estimate after an internal review indicated a material reduction in the measured, indicated and inferred mineral resource. In March, 2011, RPA confirmed that there were significant issues with the geological modelling that had produced the October 2010 resource estimate. Canada Lithium then appointed AMC Mining Consultants to independently conduct a resource estimate of the project. AMC completed its initial mineral resource estimate in May, 2011 and, then, in December 2011, AMC issued an updated resource estimate. See the summary of mineral resource estimates in the table below (0.8% Li 2 O cut-off). AMC December 2011 AMC May 2011 October 2010 Category Tonnes Li 2 O % Tonnes Li 2 O % Tonnes Li 2 O % Measured 6,914, ,101, ,654, Indicated 26,325, ,194, ,015, M+I 33,239, ,295, ,669, Inferred 13,757, ,935, ,581, In June-August 2011, the Company completed 10,300m of drilling in 56 exploration drill holes at the project. The purpose of the drilling, which complemented the drilling programs, was to infill the resource within the current pit design and extend the ore zones along strike and at depth. Feasibility Study: In June, 2011, Canada Lithium announced a new proven and probable mineral reserve estimate contained in an updated Feasibility Study prepared by BBA Inc. The estimate was based on 80% ore recovery, a waste dilution factor of 20% at 0.05% lithium oxide and a cut-off grade of 0.6% Li2O. See the table below for the new and previous mineral reserve estimates for the project. Updated Feasibility Study Prior Feasibility Study Category Tonnes Li 2 O % Tonnes Li 2 O % Proven 6,605, ,930, Probable 10,459, ,520, Total 17,064, ,450, According to the Feasibility Study, additional low-grade reserves (see the table below) will be stockpiled and subsequently processed from Year 13 to the end of the mine life (15 years). The project s aggregate proven and probable mineral reserves total 20,335,000 tonnes at an average grade 0.85% Li 2 O. Category Tonnes Li 2 O % Proven 1,199, Probable 2,072, Total 3,271, See the table below for the key parameters from the updated Feasibility Study. eresearch Corporation ~ 2 ~

3 Average Annual Li 2 CO 3 production (t) 20,000 Life of Mine (Years) 14.9 Mineral Reserve Grade (Li 2 CO 3 ) 0.85% Stripping Ratio 5.5:1 Construction Capital Cost (US$ million) 202 Average operating costs (US$/t milled) Average operating costs (US$/t Li 2 CO 3 ) 3,164 Net Present Value pre-tax (US$ million) 190 IRR pre-tax 22% Simple Payback pre-tax (years) 4 Production Plans: Canada Lithium started the initial site construction in Q3/2011, with process plant commissioning scheduled to be underway by the end of 2012 and full production expected by the end of 2013, subject to financing and final permitting. Thus, the Company has begun its transition from an exploration company to a mine developer and producer. Location and History: The Quebec Lithium Project is located 60 km north of Val d'or, Quebec. Val d'or is a mining friendly community that has over 100 years of mining history The project operated as an underground mine in under the former Quebec Lithium Corporation. The mine had a 150-m-deep shaft, lateral workings on three levels and included a surface concentration plant and refinery. Over the period of operation, the ore hoisted from underground averaged a grade of 1.25% Li 2 O. Marketing Plans: The former mine at the project produced ceramic-grade and chemical-grade spodumene* concentrates, lithium carbonate, lithium hydroxide monohydrate as well as a small quantity of lithium chloride and feldspar. Metallurgical tests by SGS Lakefield of samples from the project produced battery-grade 99.9% lithium carbonate. The Company has an agreement with Japanese metals trading firm, Mitsui and Co. Ltd., to market a portion of its future product in China, Korea and Japan. *Spodumene is a mineral that forms in prism-shaped crystals, and is a source of lithium. Geology and Infrastructure: The project consists of 12 contiguous claims covering 405 hectares. The rocks exposed on the property are Precambrian and consist of volcanic, sedimentary and intrusive rocks. The deposit outcrops on surface. The project hosts an existing mine shaft, all weather road and power line (see the map below). eresearch Corporation ~ 3 ~

4 FINANCIAL POSITION Canada Lithium s cash position grew from $17.3 million as of December 31, 2010, to $112.9 million as of September 30, The increase was due to a bought-deal financing that closed on January 31, MANAGEMENT AND DIRECTORS Peter Secker Charles Taschereau Peter Woodhouse Germaine Coombs Mitchell Lavery (P. Geo) Olav Svela Kerry Knoll Robert Cudney Ian McDonald James Fairbairn Mitchell E. Lavery Sheila Pickens Pat Mohan President, CEO and COO Project CFO Val d'or Manager (), Investor Relations non-executive Chairman of the Board of s CORPORATE INFORMATION Canada Lithium Corp. P.O. Box 118 Toronto, ON Canada M5H 2Y4 Tel: 1 (604) Fax: 1 (604) info@canadalithium.com Website: eresearch Corporation ~ 4 ~

5 eresearch CORPORATION eresearch Analysts on this report: Yuri Belinsky, B.A., M.A. Bob Weir, B.Sc., B.Comm., CFA Analyst Affirmation: I, Yuri Belinsky, and I, Bob Weir, hereby state that, at the time of issuance of this research report, I do not own, directly or indirectly, any shares of Canada Lithium Corp. NOTE: eresearch reports on Canada Lithium Corp. and other companies are available FREE on our website at You must REGISTER to gain access to these reports. eresearch Corporation eresearch was established in 2000 as Canada's first equity issuer-sponsored research organization. Our various research packages allow corporate management to choose the form of research coverage that best meets their company s needs. We are a primary source for professional investment research, focused primarily on small- and mid-cap companies. Our research and analysis is of institutional quality, and has the potential to reach millions of global investors through our extensive electronic distribution network. Reports eresearch Disclaimer: The eresearch reports are written on companies that eresearch believes have interesting prospects, are smaller in size and, therefore, have little or no following on the Street, and which would benefit from the exposure that eresearch can provide through the dissemination of the reports via our extensive electronic distribution network. eresearch wrote this report from publicly-available information. Neither a Target Price nor a Recommendation concerning the shares of the Company is provided. eresearch does not receive a fee from subject companies for the preparation and publication of reports, and Canada Lithium Corp. did not pay eresearch a fee for the preparation and publication of this report. eresearch Corporation ~ 5 ~