But the recent pullback in spot lithium carbonate prices has caused a correction in Canadian lithium stocks
Driven largely by energy grid storage and electric vehicle battery usage, annual demand for the commodity rose 26 per cent in 2016, and is set to climb to 39 per cent in 2018 and 73 per cent by 2025. All of which could benefit Canadian lithium stocks.
But the recent pullback in spot lithium carbonate prices has caused a correction in equities exposed to lithium exploration and development.
However, analysts at Canaccord Genuity point out that contract lithium prices have remained firm, thereby creating an attractive entry point for investors.
They initiated coverage on four of the largest lithium exploration and development companies listed in Canada, which account for roughly one-third of that market.
“We believe that North American investors are now willing to look beyond the failures of the past to see the potential for serious exploration and development companies,” Eric Zaunscherb said in a report titled Lithium 2.0: The Second Coming.
His top pick in the group is Critical Elements Corp., whose Rose project in Quebec offers investors a low-risk jurisdiction, production by 2021, and a “solid” 41 per cent after-tax internal rate of return.
It also has a strong partner in German chemical distributor HELM, while the stock trades at a healthy discount to its peers.
Read the full article at: business.financialpost.com
