Imperial Oil taps lithium deposit

Article Excerpt

IMPERIAL OIL LTD. $64 is a buy. This company (Toronto symbol IMO; Conservative and Income Growth Portfolios, Resources sector; Shares outstanding: 636.7 million; Market cap: $40.7 billion; Price-to-sales ratio: 0.9; Dividend yield: 2.1%; TSINetwork Rating: Average; www.imperialoil.ca) gets about 60% of its production from oil sands operations in Alberta. Its other operations include three refineries (one in Alberta, two in Ontario) and a petrochemical plant in Sarnia, Ontario. The company is teaming up with E3 Lithium Ltd. (Toronto Venture symbol ETL) to extract lithium from below the historic Leduc oil field, south of Edmonton. The Leduc discovery in 1947 was the first major oil development in Alberta. Commercial production ended in 1974. Demand for lithium is rising fast, as the mineral is a key component in batteries for electric cars. If early drilling is successful, the Leduc field could produce about 20,000 tonnes of lithium hydroxide a year. Imperial also plans to invest $6.35 million in E3 warrants. If exercised, that would give it a 6%…