Corporate Update and Strategic Partner Discussion S
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PRESS RELEASE
CORPORATE UPDATE AND STRATEGIC PARTNER DISCUSSION S
F EBRUARY 7 , 201 8 - M ONTREAL , Q UEBEC – Critical Elements Corporation (the “ Company ” or “Critical
Elements”) (TSX - V: CRE) (US OTCQX: CRECF) (FSE: F12) is pleased to provide an update to i ts
shareholders on the most recent discussion s with strategic partne r s and a review of 2017
accomplishments and recent l ithium m arket developments .
Strategic Partner and Project Financing Discussion
Critical Elements continues to work closely with its financial advisor, Canaccord Genuity Corp., to
evaluate ongoing interest from global strategic partners that seek to accelerate the Rose Lithium -
Tantalum project to production.
The process i s organized, competitive and the interest is strong, in parallel we are working with banks
and financial institutions to accelerate the debt financing portion of the project.
In a recent trip to Asia, the company met with several OEMs, cathode manufacturers, trading houses and
cell manufacturers. More than 1 2 non - disc losure agreement s with strategic parties are now in place and
currently in the process of reviewing the d ata room, illustrating the competitive tension in the lithium
market.
The end - users recognize our management abilities to successfully deliver lithiu m products, and our
development strategy give s the f lexibility to meet all major end - users current and future needs.
Lithium Market Update
Global demand for lithium products has recently intensified with the aggressive launch of OEM Electric
Vehicle pla tforms and government mandates for vehicle electrification. This has been accompanied by
significant equity and project financings as well as strategic investment and merger and acquisition
activities in the lithium sector.
2017 has certainly been an exci ting year in the lithium sector. Regulators across the globe continue to
make strides to curb greenhouse emissions and pave the way for electric vehicles by establishing plans
to phase - out internal combustion engines and instead rely on lithium - ion batteri es as an energy
alternative . Of particular note, some of the world’s largest car markets, most notably China, have
announced significant policy changes and target dates to stop the production and sales of traditional
energy vehicles within their borders . Automakers are responding to this movement by repurposing their
manufacturing platforms in preparation for significant electric vehicle sales. In fact, over the past twelve
months major automakers collectively announced that they would spend over US$100 bi llion on
establishing electric vehicle platforms by 2030 to keep pace with forecast demand.
Key announcements by some of the world’s largest auto manufacturers include:
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US $11 .0 billion investment by 2022 supporting 40 electric models ( https://www.reuters.com/article/us -
autoshow - detroit - ford - motor/ford - plans - 11 - billion - investment - 40 - electrified - vehi cles - by - 2022 - idUSKBN1F30YZ )
US $21.5 billion investment in electric vehicles over the next five years
( http://english.yonhapnews.co.kr/business/2018/01/ 17/0502000000AEN20180117008651320.html )
US $40 billion in electric vehicle investments by 2020 ( https://www.reuters.com/article/us - volkswagen -
investment - electric/volkswagen - accelerates - push - into - electric - cars - with - 40 - billion - spending - plan - idUSKBN1DH1M8 )
In attempt s to secure lithium supply in anticipation of significant electric vehicle demand, downstream
users of lithium are increasingly partnering with and making strategic investments in developers of lithium
projects .
2017 Developments
Numerous important milestone s were achieved in 2017 including the appointment of Dr. Steffen Habe r as
President of the C ompany. Dr. Haber was previously President and CEO of Rockwood Lithium w hich was
acquired by Albemarle for US $6.2B.
In March 2017, we successfully completed our spodumene pilot plant work with outstanding results
compared to indust ry standard s . Our low iron and mica deposit yield ed recoveries up to 89 % in Lock
cycle and we consistently achieved concentrate grades of up to 6.56% Li 2 O . Those results confirmed the
metallurgical advantage s of our deposit and the “tried and true” / low r isk flowsheet for the feasibility study
and future spodumene plant . ( https://www.cecorp.ca/en/critical - elem ents - successfully - completes - pilot - plant - work - produce -
spodumene - concentrate - grading - 6 - 56 - li2o/ )
In May 2017, we announce d the results of our lithium carbonate pilot plant w hich again proved the unique
quality of our ore yielding 88.4% recovery rates with a 99.9% purity and overall recoveries from ore to
lithium carbonate of 81.4%. These results compare favourably to overall recovery benchmark s for the
market of 6 0% to 70 % from spodumene to lithium carbon a te . ( https://www.cecorp.ca/en/critical - elements -
successfully - completes - pilot - plant - work - lithium - carbonate - conversion/ )
In June 2017 , the former CFO at Rockwood Lithium and coll eague of Dr. Steffen Haber , Dr. Marcus
Brune , joined the C ompany as a director. The appointment of Dr. Brune also increased the lithium market
know - how of our team. We also hired Mr. Lloyd Mayappo to join our team as Cree Relation Coordinator
to increase o ur local activities and facilitate communication in the Eastmain community.
( https://www.cecorp.ca/en/critical - elements - appoints - ex - rockwood - lithium - cfo - board - directors/ )
( https://www.cecorp.ca/en/lloyd - mayappo - joins - critical - elements - cree - relation - coordinator/ )
In July 2017, we submitted our Env ironmental Impact Study to the Environmental & Social Impact Review
Committee (COMEX) and to the Canadian Environmental Assessment Agency (CEAA). This was an
important step to maintain our development timeline. ( https://www.cecorp.ca/en/critical - elements - submits -
environmental - impact - study - rose - lithium - tantalum - project/ )
In August 2017 , our joint - venture partner Lepidico Ltd. (“Lepid ico”) announced positive drilling results
from the Lemare Project and that supports future potential beyond our current development plans. Our
exploration team continued to demonstrate the geological potential of our strategic land position in
James - Bay. ( https://www.cecorp.ca/en/wide - spodumene - intercepts - at - lemare - lithium - project/ )
Lemare Project Drilling Highlight s :
33.7 m @ 0.94% Li2O (LE - 17 - 29)
18.0 m @ 2.00 % Li2O (LE - 17 - 30)
28.5 m @ 2.15% Li2O (LE - 16 - 13)
24.0 m @ 1.87% Li2O (LE - 16 - 14)
21.0 m @ 1.75% Li2O (LE - 16 - 03)
In September 2017 , we welcomed the results of our Definitive Feasibility Study (DFS) on the Rose
Lithium - Tantalum project . The results returned Pr e - tax IRR of 48.2% and an NPV 8 of $1.25B.
( https://www.cecorp.ca/en/critical - elements - announces - pos itive - feasibility - study - pre - tax - npv - 8 - 1 - 257 - b - pre - tax - irr - 48 - 2 - rose - lithium -
project/
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Feasibility Study Highlights (press release of September 6 th 2017)
Average annual production of 186,327 tonnes of chemical grade lithium concentrate
Average annual pro duction of 50,205 tonnes of technical grade lithium concentrate
Average annual production of 42 9 tonnes of tantalum concentrate
Expected l ife of mine of 17 years
Average operating costs of $66.56 per tonne milled, $458 (US $ 344) per tonne of concentrate (al l
concentrate production combined)
Estimated initial capital cost $341.2 million before working capital
100% equity basis for project
Average gross margin 63.6%
After - tax NPV of $7 26 million (at 8 % discount rate), after - tax IRR of 3 4.9 % and price assumptio n
of US $ 1, 5 00 per tonne technical grade lithium concentrate, US$ 750 per tonne chemical grade
lithium concentrate, US$ 130 per kg tantalum pentoxide
A nticipated construction time to start of production of 21 months
Financial Advisor Appointment
In Decembe r 2017 , we appointed Canaccord Genuity as financial advisors to evaluate and coordinate the
currently in progress project financing and off - take negotiations. The Critical Elements team and our
advisor s are currently in a competitive process of negotiation with multiple parties for the project
financing, including off - take agreement s . ( https://www.cecorp.ca/en/update - strategic - partner - retention - financial - advisor -
operational - update/ )
Jean - Sébastien Lavallée (OGQ # 773), geologist, shareholder, Chairman and CEO of the Corporation,
and “Qualified Person” under Regulation 43 - 101, revised and approved the technica l content of this press
release.
IN FORMATION
Investor r elations:
Jean - Sébastien Lavallée, P. Geo.
Chairman and CEO
819 - 354 - 5146
www.cecorp.ca
Paradox Public Relations
514 - 341 - 0408
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accepts responsibility for the adequacy or accuracy of this release.