Patriot Battery Metals is marking its territory as a lithium explorer for Quebec’s Battery Valley
The province of Quebec appears to be going “all in” on powering the electric vehicle revolution. The bet is being placed in Becancour, a small town along the shores of the St. Lawrence River about midway between Montreal and Quebec City, which is rapidly emerging as a center for producing the advanced materials needed for lithium-ion batteries. Companies including General Motors, POSCO Chemical, and BASF are setting up shop to produce cathode active materials and lithium battery recycling in this strategic Quebec locale.
But what is the attraction to this particular location? Becancour offers an inviting combination of highly efficient logistics for delivering battery materials to both North America and Europe, and it has ready access to hydroelectricity that will lower the carbon footprint of products produced there, an advantage that can be passed on to the battery and EV sectors.
It also doesn’t hurt that Quebec happens to be in a region that is rich in the minerals and metals needed for battery material manufacturing. With the support of the provincial and federal governments, Becancour is looking to become Canada’s “Battery Valley.”
Given the commitment is already there, both from government and the private sector, who have announced billions in capital spending, one now needs to look upstream to see where they plan to source the raw materials for this battery hub. As we discussed in the Dean’s List, lithium is on the critical minerals list and a key battery component. Quebec appears to be blessed with an abundance of hard rock lithium or pegmatites which can contain a lithium bearing mineral known as spodumene. One company attracting a lot of attention in the lithium space is Patriot Battery Metals Inc. (TSXV: PMET | OTCQB: PMETF), a mineral exploration company focused on the acquisition and development of mineral properties containing battery, base, and precious metals.
Patriot Battery Metals’ flagship asset is the 100% owned Corvette Property, a 214 km2 land package situated along a ~50 km lithium pegmatite trend, located in the James Bay Region of Québec. The high number of well-mineralized pegmatites in this core area of the trend indicates a strong potential for a series of relatively closely spaced/stacked, sub-parallel, and sizable spodumene-bearing pegmatite bodies, with significant lateral and depth extent, to be present. Located only 15 km from the high voltage power lines connected to one of the largest hydro power schemes in the world, there is potential for the Corvette Property to produce ‘green lithium’.
There are two things that have attracted my attention with respect to Patriot Battery Metals. First is the abundance of impressive results to date and the fact that there is a lot more coming. The core area includes an approximate 2 km long corridor hosting numerous spodumene pegmatites, highlighted by the large CV1 and CV5 pegmatite outcrops, and has returned drill intercepts of:
- 1.65% Li2O and 193 ppm Ta2O5 over 159.7 m (CV22-042)
- 1.22% Li2O and 138 ppm Ta2O5 over 152.8 m (CV22-030)
- 2.13% Li2O and 163 ppm Ta2O5 over 86.2 m (CV22-044), and,
- 2.22% Li2O and 147 ppm Ta2O5 over 70.1 m, including 3.01% Li2O and 160 ppm Ta2O5 over 40.7 m (CV22-017).
A total of three drill rigs are currently operating at the Corvette Property – two targeting the CV5 pegmatite corridor and one targeting the CV13 pegmatite cluster. As of September 15, 2022, a total of approximately 19,199 m over sixty-five (65) holes have now been completed over the 2022 drill campaign with drilling anticipated to continue through to mid-October, at which time the 2022 drill program will conclude with final core processing on site and shipment to the lab for analysis.
Source: Patriot Battery Metals Inc. Sep 19, 2022 Press Release
As you can see from the illustration above, there is still a lot of outstanding assays pending for the summer drilling program. But perhaps even more intriguing is the Company’s latest capital raise to fund drilling for the foreseeable future. I’ve seen a lot of flow-through share offerings in my time and even participated in several but I have never seen anyone command a price representing a 109% premium to the last traded share price prior to the offering. I know the Federal Government’s 30% Critical Mineral Exploration Tax Credit has added a little more incentive to flow-through shares but this premium is astounding (at least to me). Perhaps PearTree Securities Inc. is wildly bullish about lithium in Quebec and is more than happy to spend C$20 million on 1.5 million shares at C$13.27 when Patriot’s stock price was at C$6.35. I know it’s made me pay a lot more attention to this stock.
However, Patriot Battery Metals is not a cheap stock at present. It, along with many of its lithium peers, are trading at or near all time highs despite what most of the rest of the market is doing. Granted lithium seems to have better economics right now than most other metals, meaning the value creation for investors can be very steep on a successful asset. With that in mind, the Corvette Property doesn’t have a resource estimate or PFS as of yet, which means there could already be a lot of optimism built into its C$580 million market cap… or not.