It’s always nice when a mining explorer nobody knows about puts out news that catapults them into the middle of the conversation, and that appears to be what happened this morning to E3 Metals (ETMC.V), which I knew about as deeply as I do how to speak Latin before today.
Wrong kind of Latin.
E3 Metals Corp.’s first round of lithium sampling has confirmed historical data ranging from 29.1 milligrams/litre to 84.8 mg/L at actively producing oil and gas wells across a portion of the company’s petro-lithium project in Alberta.
That’s pretty dope.
E3 Metals’ sampling program has been completed without the requirement for drilling a well, taking advantage of the existing infrastructure on E3’s permit areas. This has resulted in an very cost-effective sampling and assay program.
These results will be used to expedite the completion of the company’s first National Instrument 43-101 lithium mineral resource, which is expected to be completed before the end of 2017.
E3 Metals received strong collaborative support from oil and gas operators working in the permit area. This has allowed E3 to confirm lithium concentrations across a broad area, some of which has never previously been tested for lithium. E3 Metals results confirm that the lithium concentrations appear to be consistent throughout the massive Leduc reservoir.
The story writes itself. Let’s talk numbers:
Lithium concentrations obtained from 43 wells across E3’s permit area confirm historic results as high as 84.8 mg/L.
Lithium concentrations obtained from permit areas never before sampled range from 41.4 mg/L to 79.9 mg/L.
Those are good numbers for a petro-lithium project, which make up for lack of grade by the sheer size of the potential output, and here’s what’s better: We’re talking lithium found in existing oil wells, which means the company doesn’t have to go pounding expensive holes in the ground to figure out where everything is. Local oil operators, who for years considered lithium to be something that just got in the way, are now seeing there’s money to be had – money they could use right now – in allowing folks like E3 to come and siphon it away.
The company explains:
When the oil is pumped out of these maturing reservoirs by oil and gas operators, about 98 per cent of the fluid that comes with it is water and must be separated from the oil in a separation facility. Not all oil and gas reservoirs contain lithium, which distinguishes E3’s 1.4 million acres of permits over the prolific Leduc reservoir.
Honestly, this is an easy piece to write, because the company is laying it all out:
E3 has demonstrated the ability to leverage the existing oil and gas fields’ infrastructure to reduce the exploration costs and development risks compared to conventional exploration for lithium in salars or hard rock deposits. No new drilling and infrastructure building are required for current and proposed exploration. With the trend of decreasing oil and gas production in the area, E3 may be able to acquire infrastructure for minimal cost. While lithium concentrations found in petro-lithium projects are generally at the lower end of the current lithium industry production grade curve (around 80 mg/L), it is important to understand that the Leduc reservoir has the capacity to contain tens of billions of litres of lithium-bearing brines with extremely high flow rates.
So yes, it’s up 25% today and it’s a shame you weren’t on it yesterday, but E3’s share price back in June peaked at $0.78 a share, and after today’s run, you can still get it at $0.44. That pegs the company at a market cap of $6.9 million according to Google Finance.
This is the first time I’ve taken a serious look at E3, and the news warrants further glances as news rolls out. A new 43-101 resource estimate will undoubtedly make the thing firmer, so it’s worth a spot on your watchlist.
— Chris Parry
FULL DISCLOSURE: There is no commercial arrangement between E3 Metals and Equity.Guru, nor does anyone associated with the company own stock in the firm.