The electric vehicle revolution has led to a run up in prices for a variety of metals and other commodities, as global automakers try to keep up with Tesla. The mass adoption of EVs is not here just yet, but the cascade of new EV models set to be unveiled in the next few years will accelerate the energy transition.
The ramp up in EV production has caused price spikes for lithium and cobalt, for example. But there is one material that is actually even more crucial to the development of batteries needed in EVs: graphite. Graphite can produce graphene, an extremely versatile material that is 200 times stronger than steel, but also highly flexible and incredibly light weight. These features make it prized in a variety of applications, but graphene can also allow batteries to recharge faster, last longer and hold more energy – essential ingredients in extending the range of EVs and lowering their cost to allow for mass adoption.
Because graphene will play a pivotal role in the EV revolution, graphite producers are positioning themselves for a massive payday as demand skyrockets. One such graphite producer is Global Li-Ion Graphite Corp. (CSE: LION; OTC: GBBGF) a small Vancouver-based company that has graphite assets in Nevada and Madagascar.
LION is an unknown to investors but that could soon change as it starts to make big moves to take its operations to the next level. On October 25, LION announced an MOU to acquire BEGO Technologies, a company that has a unique and highly promising way to render graphene from graphite, offering LION some vertical integration.
On October 30, LION released news about another major step it is taking. LION announced that it has signed an option to purchase a 100 percent interest in the Neuron Graphite Project in Northern Manitoba from Callinex Mines Inc.
The reason this is important is because Callinex completed a 12-hole drilling program in its Northern Manitoba acreage, which showed a Carbon Content (or Graphite) of up to 78.3 percent. Follow up analysis showed a 4.1-meter section grading 60.38 percent Carbon Graphite included in a 56.0-meter intersection grading 5.91 percent Carbon Content.
In order to take over Callinex, LION will pay $200,000 and one million shares on signing.
The acquisition gives LION (CSE: LION; OTC: GBBGF) a third critical source of pending graphite production. Combined with the pending acquisition of BEGO Technologies, LION has added some exciting graphite acreage while also gaining access to the technology needed to transform that into graphene – the key element in the batteries needed for electric vehicles.
Company President Jason Walsh commented “we are extremely excited to work with Callinex and their Chairman Mike Muzylowski on the advanced Neuron High grade Graphite project. We feel this gives LION the perfect balance of potential Graphite production in three jurisdictions enabling us to achieve our goal of being a major supplier of premium Graphite to the rapidly growing energy storage industry.”
Teck Resources (NYSE:TECK) (TSX:TECK.B): Zinc hasn’t been Teck’s best friend of late, but that looks set to change in the medium term, as supply continue to dwindle and as we hear news that the world’s top producer of the metal—Glencore—isn’t planning to bring shuttered mines back online. Supply will remain tight.
Keep in mind this, though: Teck’s Q1 earnings and revenue fell short of expectations because of weaknesses at its zinc unit, sending it shares down about 6% in late April. In particular, there’s been a 23% drop in production at its Red Dog mine due to lower grades of zinc.
Endeavor Silver (NYSE:EXK) (TSX:EDR) operates three silver-gold mines in Mexico, but it’s also got three attractive development projects. Production has dropped and all-in sustaining costs have risen, leading to a negative cash flow. But the company has significantly reduced its debt, so it’s future is anything but bleak.
By 2018, with development in the pipeline, this stock might be prohibitively expensive again because there is plenty of near-term growth potential here. It’s also got further upside with zinc and should get a boost in this coming bull market. Catalysts include positive reserve estimates for its fifth mine, the Terronera silver/gold project in Mexico’s Jalisco state.
Magna International (TSX:MG) (NYSE:MGA) is based in Aurora, Ontario. The global automotive supplier is gutsy and innovative--and definitely tuned to the obvious future--clean transportation. A great catalyst is its development of a combo electric/hydrogen vehicle--a fuel cell range-extended EV (FCREEV). It’s not going to produce them (for now, at least) but plans to use the model to show off its engineering and design prowess and produce elements of the electric drivetrain and contract manufacturing.
The company’s auto parts are distributed to heavyweights such as General Motors, Ford, Tesla, BMW, Toyota, Volkswagen and Chrysler. These huge deals provide a safe and steady profit stream for the company. It’s insightful, forward-thinking and smart value/low cost for shareholders.
Pretium Resources (NYSE:PVG) (TSX:PVG): This impressive Canadian company is engaged in the acquisition, exploration and development of precious metal resource properties in the Americas.. Additionally, construction and engineering activities at its top location continue to advance, and commercial production is targeted for this year.
The company’s modest market cap and stock price make it an appealing buy for investors. Pretium has an impressive portfolio and if you can catch the stock while the price is right, there could be huge opportunity for upside.
Lithium Americas Corp. (TSX:LAC) is a resource company with a focus on lithium development. The company’s two large plays, the Cauchari-Olaroz project in Argentina – a joint venture with Sociedad Química y Minera de Chile - and the Lithium Nevada project in Nevada, are promising assets that will be sure to provide the company for many years to come.
The company’s impressive market cap, keen eye for investments, and excellent partners have certainly sparked the interest of investors. The company’s YTD stock value has increased by over 100% and shows no signs of slowing down.
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Forward-Looking Statements
This news release 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 release include that LION will complete its announced transaction to purchase the Nevada carbon exploration property; that graphite and graphene will have all applications and will be as much in demand in future as currently expected; that LION can fulfill all its obligations to exercise its Nevada property option; that LION’s Nevada property can achieve drilling and mining success for graphite; that LION will close its MOU to buy a Madagascar mining licenses; that production can go online in the near term in Madagascar; that LION will obtain drilling permits on its Nevada and Madagascar properties; that the graphite in Nevada and Madagascar when produced will be high quality suitable for the tech industry; and that LION will be able to carry out its business plans. 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 agree on the final terms for the Madagascar property, even if it agrees it may not be able to finance its acquisitions of Nevada or Madagascar, it may not get regulatory approval for these acquisitions, aspects or all of the properties’ development may not be successful, mining of the graphite may not be cost effective, LION may not raise sufficient funds to carry out its plans, changing costs for mining and processing; increased capital costs; the timing and content of upcoming work programs; geological interpretations and technological results based on current data that may change with more detailed information or testing; potential process methods and mineral recoveries assumptions based on limited test work with further test work may not be viable; additional high value mineral properties may not be available for LION to acquire, or LION may not be able to afford them; competitors may offer better technology than graphite technology for 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, or that the required permits to build and operate the envisaged mines cannot be obtained. The forward-looking information contained herein is given as of the date hereof and the Company assumes no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.
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