This boulder could be an indication of an exciting development in the lithium market.
Processed, that boulder is an important ingredient to power rechargeable batteries for electric vehicles like Tesla’s, BMWs, Mercedes, Volvos, Cadillacs, Hummers and a lineup of new entrants to the EV frenzy.
And with demand for lithium in Europe projected to rise 60X in the coming decade...
This find couldn’t have come at a better time.
Not only is technology advancing rapidly but the EU is now supporting the industry in the same way the U.S. supported Tesla in its goal of achieving lithium self-sufficiency by 2025.
Lithium is now a critical metal for Europe. In September 2020, the EU added lithium to its Critical Raw Materials (CRMs) list, warning of the need for a continuous flow of lithium supply for zero-emission mobility.
They are investing billions, including…
$3.9 billion (3.2 billion euros) approved in December 2019 for the EU’s first battery subsidies with seven countries to catch up to Asian competitors.
$3.5 billion (2.9 billion euros) in its second battery-related “European Battery Innovation” project approved by the European Commission in 2021.
$9 billion … how much the European Commission expects to leverage in private sector investment in the same project.
$9.2 billion (7.6 billion euros) in EU structural funds to support innovative battery projects under the Smart Specialisation Platform.
So, if you missed out on making money on Tesla… it’s happening again in Europe.
And now, a potential new discovery on a property that is under contract by a $32-million market cap miner could be about to bring lithium to Europe...
The Bergby Project is a property with recently discovered Lithium mineralization in central Sweden, near to the world famous Woxna graphite mine and the new Northvolt lithium battery gigafactory.
This is already a mineralization discovery. That is expected to grow.
But still, it gets better than this: Bergby may benefit from cost-effective surface and near surface extraction. In other words, it might turn out to be lithium that’s not only parked right next to the best infrastructure in the world for batteries, but it should also be cheap to get at.
The Bergby project includes three exploration licenses covering 1,903 hectares of prime EU market-bound lithium potential. Now United Lithium (CSE:ULTH; OTCMKTS:ULTHF) will be buying it, on terms and conditions that have been made public.
In Q4 2016, the Bergby discovery showed lithium mineralization in three outcrop areas.
In Q4 2017, the first drill program was completed with 28 of the 33 drill holes intersecting lithium mineralization.
They’ve found three types of lithium mineralization in Bergby’s boulders and outcrops—all of which are highly promising for extensive development of lithium.
All the lithium minerals are contained in coarse pegmatite, some of which has spodumene crystals up to 30 centimeters in length.
So, we already have a mineralization discovery and a ground magnetic survey appear to show the thickest part of the pegmatite, which was then identified by drilling as well. And the magnetic survey suggests there may be a lot more …
Assay results from 41 boulders showed the potential for high-quality lithium. Li2O (lithium oxide) averaged 1.06% and ranged from 0.03% to 4.56%, which is getting close to the theoretical maximum.
But even with all the pegmatite showings in these boulders and outcrops, there are still more areas that have never been tested for lithium mineralization.
A tiny, $32-million miner is expected to soon close on a lithium property that they will soon be working at defining the size of its mineralization discovery. This is the moment when junior miners tell the world what they have found..
One of the reasons the EU is throwing billions at the EV market is because they are now importing from Argentina and China…
They’re starting a Gigafactory war, even, hoping to create intense competition to push things forward.
They’re offering billions of euros of co-funding to companies willing to build giant battery factories … beyond Tesla.
And they want lithium independence. They need lithium independence.
This is the critical moment that makes United Lithium’s lithium exploration project right in Europe’s backyard a premium setup.
This lithium could be sold nearby to a Who’s Who of European Lithium Battery Manufactures companies.
All of them are within a one-day ship ride, including …
- Samsung, which supplies BMW, VW and Volvo Trucks
- Sk Innovation, supplying Hyundai
- LG Chem (Porsche, Volvo, Audi, Renault, Jaguar)
- And of course, Tesla
PLUS, once the Northvolt lithium battery Gigafactory goes online in Sweden... it will get even better.
A REPEAT OF THE US LITHIUM MARKET?
We’ve known for some time that there would eventually be a lithium supply squeeze.
All the hype around lithium a few years ago was … premature. Or forward-thinking, depending how you want to look at it.
Some investors jumped the gun and went all in expecting a supply squeeze that never came.
Now, that supply squeeze is here, and the proof is in the EV and EV tie-in stocks.
Tesla (NASDAQ:TSLA) has gained 420% in just 12 months and is, as always, unstoppable.
Blink Charging Co. (NASDAQ:BLNK), which owns, operates, and provides EV charging equipment and networked EV charging services in the United States, has seen 52-week gains of over 2,000%.
Chinese EV maker NIO (NYSE:NIO) is up a stunning 1,450% in a year.
And the list goes on … because the market is all about the energy transition …
And EVs are the most important immediate element of that.
They all need tons of lithium, so that’s one place the big money is looking.
BNEF has revealed that a broad measure of global energy transition investments in 2020 clocked in at a record $501.3 billion, good for 9% Y/Y growth.
Battery storage, smart grid and energy efficiency companies managed to bring in over $8 billion last year … that’s up from $3.8 billion in 2019.
Battery storage also saw a huge boost in corporate funding, with 54 deals in 2020 worth $6.6 billion.
And VC is starving for all of this. Globally, venture capital funding for our energy transition was 12% higher in 2020, raising $2.6 billion.
There’s no better place to be RIGHT NOW than Europe—the most desperate to gain lithium independence, and the most willing to throw billions of dollars at it.
A mineralization discovery already made and now being defined is geographically perfectly positioned to take advantage of new energy policies and funding that will render lithium one of the most strategic metals in the world.
$32 MILLION MARKET CAP COMPANY ABOUT TO BUY PROPERTY WITH POTENTIALLY SIGNIFICANT LITHIUM DISCOVERY
Everyone needs lithium. Tesla, Mercedes, Porsche, Volvo, BMW and more.
And now, when the timing couldn’t be better, United Lithium is moving fast to buy a property right in Europe’s back yard … a lithium discovery that if commercialized, can go directly to market and is surrounded not only by other mines and tons of infrastructure, but in close proximity to a battery Gigafactory that will come online soon.
A $32-million market cap company buying a project with this much potential is the kind of project that has a high risk/ reward ratio for investors.
Other companies set to play a role in the lithium boom:
Renewable energy providers are some of the driver factors in the lithium demand boom, as well. That’s why lithium companies are scrambling to snag deals with companies like Enphase Energy (NASDAQ:ENPH). Enphase is a Fremont, California-based company that designs and manufactures software-driven home energy solutions used in solar generation, home energy storage, and web-based monitoring and control.
ENPH reported a large Q2 GAAP loss with GAAP EPS clocking in at -$0.38, a good $0.44 below Wall Street's consensus. The loss was mainly due to a $59.7M charge related to fair value changes related to convertible notes issued in March 2020. The company reported Q2 revenue of $125.53M (-6.4% Y/Y) after shipping approximately 1.1 million microinverters while also managing to drive channel inventory back to healthy levels with management attributing the revenue contraction to a difficult macro environment due to Covid-19.
Despite the tough first half of 2020, however, Enphase has remained a favorite on Wall Street. Since January of last year, Enphase has seen its share price rise by a massive 472%, and it’s only just getting started. As the renewable push kicks into high gear, and with the United States expected to spend over $1.7 trillion on green energy initiatives over the next decade, Enphase might just emerge as one of the biggest winners.
NextEra Energy (NYSE:NEE) is another shining star in the renewable world. NextEra is the world’s leading producer of wind and solar energy, so it’s no surprise that it has received some love from the ‘millennial dollar.’
In 2018, the company was the number one capital investor in green energy infrastructure, and fifth largest capital investor across all sectors. No other company has been more active in reducing carbon emissions. And they’re just getting started. By 2025, the company aims to reduce their own emissions by 67 percent while doubling their electricity production from a 2005 benchmark.
To put this into perspective, if all of America’s utilities were able to achieve NextEra Energy’s projected 2025 emissions rate, absolute CO2 emissions for the power sector would be approximately 75% lower than they were in 2005.
Though it’s price movement hasn’t been as exciting as Enphase, it has remained on a consistent upward trajectory. In fact, long-term investors who bought in just 5 years ago would be sitting pretty on 300% returns. And the icing on the cake? It pays dividends.
FMC Corp. (NYSE:FMC) was founded in 1883, and has been around the block and back. FMC has a long history stretching between many different industries, but within all of them, FMC has remained a leader in innovation.
FMC’s involvement in the lithium industry is particularly notable. The company is one of the top three in lithium and associated technologies. It is one of the largest suppliers into electric vehicle applications using lithium hydroxide.
Anno 2019, this major miner is one of the world’s top producers of lithium. FMC was struck by the negative sentiment in lithium markets back in 2018, but has rallied back to near 5-year highs. Long-term growth in lithium demand is expected to drive margins for FMC and major expansion, and leading analysts to give it a buy rating.
Celestica (NYSE:CLS, TSX:CLS) is a key company in the lithium boom due to is role as one of the top manufacturers of electronics in the Americas. Celestica’s wide range of products includes but is not limited to communications solutions, enterprise and cloud services, aerospace and defense products, renewable energy and enough health technology.
Thanks to its exposure to the renewable energy market, Celestica’s future is tied hand-in-hand with the green energy boom that’s sweeping the world at the moment. It helps build smart and efficient products that integrate the latest in power generation, conversion and management technology to deliver smarter, more efficient grid and off-grid applications for the world’s leading energy equipment manufacturers and developers.
Like the rest of the market, Celestica fell victim to the massive selloff sparked by the global COVID-19 pandemic, seeing its share price fall into the $2 range in March 2020. Since then, however, the stock price has soared by nearly 400% to its current trading price of $8.31. As the world races towards a greener future, however, the upside potential for Celestica could be even higher.
Lithium Americas Corp. (NYSE:LAC, TSX:LAC) is one of North America’s most important and successful pure-play lithium companies. With two world-class lithium projects in Argentina and Nevada, Lithium Americas is well-positioned to ride the wave of growing lithium demand in the years to come. It’s already raised nearly a billion dollars in equity and debt, showing that investors have a ton of interest in the company’s ambitious plans, and it will likely continue its promising growth and expansion for years to come.
It’s not ignoring the growing demand from investors for responsible and sustainable mining, either. In fact, one of its primary goals is to create a positive impact on society and the environment through its projects. This includes cleaner mining tech, strong workplace safety practices, a range of opportunities for employees, and strong relationships with local governments to ensure that not only are its employees being taken care of, but locals as well.
Lithium Americas’ efforts have paid off in the market, as well. While many companies across multiple industries struggled last year, Lithium Americas’ stock soared. In February last year, the company’s stock price was sitting at just $5.26, while today it is at $21.12, representing a 300% return for investors who bought in just a year ago.
Blackberry Limited (TSX:BB) recently launched a new research and development arm called BlackBerry Advvanced Technology Labs. Charles Eagan, BlackBerry CTO. “Today’s cybersecurity industry is rapidly advancing and BlackBerry Labs will operate as its own business unit solely focused on innovating and developing the technologies of tomorrow that will be necessary for our sustained competitive success, from A to Z; Artificial Intelligence to Zero-Trust environments. We believe this highly experienced team will allow us to remain nimble, engaged and, above all else, proactive in our efforts to be the most trusted security software leader in the market.”
Though BlackBerry has seen some increased volatility in recent weeks due to its popularity among Redditors, the company has a lot of potential in the long term, and will likely remain as one of Canada’s premiere tech firms for years to come.
Turquoise Hill Resources Ltd. (TSX:TRQ) is a significant producer of Uranium. Uranium is a key material in the production of nuclear energy, which many analysts are suggesting could be a major component in the global transition to cleaner energy. While the mineral has not seen significant price action in recent years, there are a number of new projects set to come online across the globe in the medium-term, which could be a boon to Turquoise Hill.
Though 2019 was a particularly rough year for Turquoise Hill, its downturn led to an opportunity for new shareholders to get in on the company at reduced prices. Since dropping from all time highs and settling at a low of just $5, Turquoise Hill has outperformed many of its peers, climbing by nearly 150% in 2020 alone.
Magna International (TSX:MG) was already making major moves in the battery market over a decade ago, investing over half a billion dollars in battery production while the market was still in its infancy. At the time, electric vehicles as we know them had barely hit the scene, with Tesla launching its premiere car just two years prior.
Magna’s massive investment has paid if in a big way, however. Since its battery bet, the company has seen it’s valuation soar by tens of billions of dollars, and it has solidified itself as one of the leaders in the business.
By. Aya Beekhof
**IMPORTANT! BY READING OUR CONTENT YOU EXPLICITLY AGREE TO THE FOLLOWING. PLEASE READ CAREFULLY**
This article contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this article include that demand for lithium will increase in future as currently expected; United Lithium’s business and plans, including with respect to undertaking further acquisitions, completing the acquisition of Bergby, acquiring additional mineral claims nearby Bergby, complying with the terms of the Bergby acquisition and carrying out exploration activities in respect of its mineral projects; that most of the lithium is reachable close to surface; that they can reduce costs compared to many similar projects; that ULC can produce a PEA by Q3 2021; and that they can raise $4M quickly. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include that the Company may not be able to finance its intended drilling programs, aspects or all of the property’s development may not be successful, their methods of mining of the lithium may not be cost effective; the risks that the acquisition does not complete as contemplated, or at all; that United Lithium does not complete any further acquisitions; that they do not acquire the additional mineral claims in the region of the Project prior to March 21, 2021; that United Lithium does not spend $1,000,000 on exploration work on the Project within 18 months from the Closing Date; the Company may not be able to carry out its business plans as expected; changing costs for mining and processing; permits may not be granted for the mining projects; increased capital costs; the timing and content of upcoming work programs; geological interpretations and technological results based on historical or even current data that may change with more detailed information or testing; potential mineral recoveries assumptions based on limited test work with further test work may not be viable; competitors may offer cheaper lithium; more production of lithium could reduce its price, or the price may drop for other reasons; alternatives could be found for lithium in battery technology; the availability of labour, equipment and markets for the products produced; and despite the current expected viability of its projects, that the minerals cannot be economically mined on its properties. The forward-looking information contained herein is given as of the date hereof and the writer assumes no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.
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