Q: Any reason you can see for this 10% drop on no news,also would you see this as a god entry price and any other thoughts on this company in regards to management,debt and their partnership with Imperial Oil Thanks
5i Research Answer:
There is no company news, but the sector itself is having a rough day, with many lithium stocks declining. Lithium prices experienced steep declines in January. We would consider ETL a decent company, but its small size adds risk. It has no revenue, losses and negative cash flow. It does have $35M cash (as of Sept 30). The company's Clearwater project in Alberta looks interesting, with an expected IRR of 27%. Management we think is decent and
With IMO it is running a pilot program to extract lithium from one of IMO's very old oil fields. It is a good relationship but note still in the pilot phase. Insiders own about 4%. The stock is hitting new lows. Momentum might take it to $1.50 which we would find more interesting.