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Jack Lifton with Belinda Labatte of Lomiko Metals on Canada’s growing EV industry and the competitive advantages of the Quebec graphite industry

Jack Lifton interviews CEO and Director Belinda Labatte on an update on Lomiko Metals Inc. (TSXV: LMR | OTCQB: LMRMF). In this compelling conversation with Jack, Belinda participates in a discussion on not only Canada’s vision for the competitive development of an EV supply chain, but the competitive advantages of the Quebec graphite industry.

In this InvestorIntel interview, which may also be viewed on YouTube (click here to subscribe to the InvestorIntel Channel), Belinda Labatte pointed out the fragility of the present graphite supply chain in North America given that “100% of the processing of graphite occurs in China and about 90% of the material comes from China.” Highlighting the huge demand for graphite in Quebec and the rest of North America, Belinda went on to also provide an update on Lomiko’s UL ECOLOGO® certification for mineral exploration to validate Lomiko’s responsible business practices.

To watch the full interview, click here

About Lomiko Metals Inc.

Lomiko Metals has a new vision and a new strategy in new energy. Lomiko represents a company with purpose: a people-first company where we can manifest a world of abundant renewable energy with Canadian and Quebec critical minerals for a solution in North America. Our goal is to create a new energy future in Canada where we will grow the critical minerals workforce, become a valued partner and neighbour with the communities in which we operate, and provide a secure and responsibly sourced supply of critical minerals.

The Company holds a 100% interest in its La Loutre graphite development in southern Quebec. The La Loutre project site is located within the Kitigan Zibi Anishinabeg (KZA) First Nations territory. The KZA First Nations are part of the Algonquin Nation and the KZA territory is situated within the Outaouais and Laurentides regions.​ Located 180 kilometres northwest of Montreal, the property consists of 1 large, continuous block with 48 minerals claims totaling 2,867 hectares (28.7km2). Lomiko Metals published a Preliminary Economic Assessment (“PEA”) on September 10, 2021 which indicated the project had a 15-year mine life producing per year 100,000 tonnes of the graphite concentrate at 95%Cg or a total of 1.5Mt of the graphite concentrate. This report was prepared as National Instrument 43-101 Technical Report for Lomiko Metals Inc. by Ausenco Engineering Canada Inc., Hemmera Envirochem Inc., Moose Mountain Technical Services, and Metpro Management Inc., collectively the Report Authors. The Bourier project site is located near Nemaska Lithium and Critical Elements south-east of the Eeyou Istchee James Bay territory in Quebec which consists of 203 claims, for a total ground position of 10,252.20 hectares (102.52 km2), in Canada’s lithium triangle near the James Bay region of Quebec that has historically housed lithium deposits and mineralization trends.

To learn more about Lomiko Metals Inc., click here

Disclaimer: Lomiko Metals Inc. is an advertorial member of InvestorIntel Corp.

This interview, which was produced by InvestorIntel Corp., (IIC), does not contain, nor does it purport to contain, a summary of all the material information concerning the “Company” being interviewed. IIC offers no representations or warranties that any of the information contained in this interview is accurate or complete.

This presentation may contain “forward-looking statements” within the meaning of applicable Canadian securities legislation. Forward-looking statements are based on the opinions and assumptions of the management of the Company as of the date made. They are inherently susceptible to uncertainty and other factors that could cause actual events/results to differ materially from these forward-looking statements. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business or any investment therein.

Any projections given are principally intended for use as objectives and are not intended, and should not be taken, as assurances that the projected results will be obtained by the Company. The assumptions used may not prove to be accurate and a potential decline in the Company’s financial condition or results of operations may negatively impact the value of its securities. Prospective investors are urged to review the Company’s profile on Sedar.com and to carry out independent investigations in order to determine their interest in investing in the Company.

If you have any questions surrounding the content of this interview, please contact us at +1 416 792 8228 and/or email us direct at info@investorintel.com.




Ecclestone Dusts Off the Crystal Ball for Metal Prices in 2022

In a recent InvestorIntel interview, Tracy Weslosky spoke with Christopher Ecclestone, Principal and Mining Strategist at Hallgarten & Company about his latest research report on the outlook for metal prices in 2022.

In this InvestorIntel interview, which may also be viewed on YouTube (click here to subscribe to the InvestorIntel Channel), Christopher Ecclestone said that the research report titled – Metal Price Preview: Dusting Off the Crystal Ball – also covers the performance of different metals in 2021 including the re-emergence of the uranium market and battery metals going “from being hot to being a furnace.” Christopher went on to share why gold and silver are expected to perform well in 2022.

To watch the full interview, click here.

About Hallgarten & Company

Hallgarten & Company was founded in 2003 by the former partners of a well-known economic think-tank. Their output encompasses top-down and bottom-up research from a Classical Economic (Austrian School) perspective. Over the years, the team has successfully picked trends using macroeconomic underpinnings to guide investors through the treacherous waters of the markets. It was only natural, in light of the focus of Classical Economics upon the “real value” of monetary assets that the firm’s strengths should ultimately have become evident in resources sectors and projections of commodity trends.

Hallgarten & Company has advised and managed portfolios of offshore and onshore hedge funds.

Hallgarten also provides consultancy services on Latin American economic, politics and corporate matters including the production of bespoke research.

Hallgarten research is now available on Bloomberg and FactSet.

To learn more about Hallgarten & Company, click here




Some potential winners from the White House commitment to ‘Securing a Made in America Supply Chain for Critical Minerals’ Announcement

Could this be the moment the USA finally takes some actions towards supporting critical minerals supply chains? The big news in the world of securing domestic supplies of critical minerals for the USA last week were two key announcements by the White House:

Additionally, the first article linked above refers to earlier reports (E.g: America’s Supply Chains) and states: “the reports recommended expanding domestic mining, production, processing, and recycling of critical minerals and materials – all with a laser focus on boosting strong labor, environmental and environmental justice, community engagement, and Tribal consultation standards.”

The takeaway here is that investors looking to benefit from the new White House initiatives need to look for U.S. domestic critical mineral projects, processing projects, and recycling projects. A U.S.  processing project would include Energy Fuels Inc. (NYSE American: UUUU | TSX: EFR) rare earths processing at their White Mesa mill in Utah, USA. Today I will focus on the U.S. critical minerals projects.

China has dominated the critical minerals supply chain, leaving the U.S. vulnerable this decade

After many years of talk and very limited action, it appears the USA may finally be waking up to the need to urgently support and facilitate domestic U.S. critical minerals supply chains. Those of us involved in the manufacturing industry know that for years China has been buying up and controlling the critical minerals’ supply chains. The consequences are that China now completely dominates the supply chains for lithium-ion batteries, electric vehicles, wind energy, and solar energy. These are multi-trillion-dollar industries, but if you cannot access the raw materials then you cannot produce a product. We saw that in 2021, with semiconductor shortages slowing the U.S. auto industry, and we are seeing it again now with lithium-ion battery shortages leading to a limited supply of domestically produced EVs, despite enormous consumer demand. Tesla has an estimated 1.3 million pre-orders for its Cybertruck but has delayed production until 2023 due to not having enough lithium-ion batteries.

Green energy from solar, wind, and nuclear will increasingly power electric vehicles

Companies that may benefit from U.S. support of the critical minerals industry

Looking through the White House announcement gives us several clues:

  1. “These minerals—such as rare earth elements, lithium, and cobalt……As the world transitions to a clean energy economy, global demand for these critical minerals is set to skyrocket by 400-600 percent over the next several decades, and, for minerals such as lithium and graphite used in electric vehicle (EV) batteries, demand will increase by even more—as much as 4,000 percent……will also discuss $3 billion in BIL funding to invest in refining battery materials such as lithium, cobalt, nickel, and graphite
  2. “President Biden will announce that the Department of Defense’s Industrial Base Analysis and Sustainment program has awarded MP Materials Corp. (NYSE: MP) $35 million to separate and process heavy rare earth elements at its facility in Mountain Pass, California.”
  3. “Berkshire Hathaway Energy Renewables (BHE Renewables) will announce that this spring, they will break ground on a new demonstration facility in Imperial County, California, to test the commercial viability of their sustainable lithium extraction process from geothermal brine……In addition to BHE Renewables, Controlled Thermal Resources (CTR) and EnergySource Minerals have established operations in Imperial County to extract lithium from geothermal brine.”
  4. “Redwood Materials will discuss a pilot, in partnership with Ford and Volvo, for collection and recycling of end-of-life lithium-ion batteries at its Nevada based facilities to extract lithium, cobalt, nickel, and graphite.”
  5. “Tesla intends to source high-grade nickel for EV batteries from Talon Metals’ Tamarack nickel project.”
  6. “DOE, DOD, and the Department of State signed a memorandum of agreement (MOA) to better coordinate stockpiling activities to support the U.S. transition to clean energy and national security needs.”

The winners of the U.S. critical minerals policy should be those with projects in the USA which are focused on critical minerals (rare earths, lithium, cobalt, nickel, graphite), critical minerals processing and critical minerals recycling. Needless to say, they will need to pass environmental and permitting rules and support local communities and American jobs.

Of the companies mentioned above, MP Materials and Talon Metals are the only two that are listed. BHE Renewables, Controlled Thermal Resources (CTR), EnergySource Minerals, and Redwood Materials are all private companies.

MP Materials Corp.

MP Materials Corp. (NYSE: MP) owns and operates the Mountain Pass open pit rare earths mine facility, located in Mountain Pass, California, USA. Mountain Pass plans to have an output containing 5,000 metric tons of neodymium and praseodymium (NdPr), starting in ~2022. MP Materials also plan to have their own Heavy Rare Earth separation facility at their Mountain Pass Mine. As discussed above MP Materials have now been awarded a DoD contract (refer to the US$35 million in point 2 above). MP Materials Chairman and CEO, James Litinsky, stated: “The ability to mine, process, and refine rare earths at Mountain Pass is foundational to a national effort to secure the U.S. rare earth supply chain……We thank the Department of Defense for its confidence and support.”

MP Material’s stage III plan is to develop a rare earth metal, alloy and permanent magnet manufacturing facility in Fort Worth, Texas. MP Materials has an agreement to supply General Motors (GM) with magnets to be used in EV motors for the Hummer EV, Cadillac Lyriq, Chevrolet Silverado EV, and more than a dozen models using GM’s Ultium platform.

Talon Metals Corp.

Talon Metals Corp. (TSX: TLO) has a JV with Rio Tinto (ASX: RIO) at their Tamarack nickel-copper-cobalt Project in Minnesota, USA. Talon owns 50% but can earn-in to a 60% share of the Project. Talon recently announced a 5-year nickel supply agreement with Tesla (NASDAQ: TSLA).

Other critical mineral companies with USA projects

Lithium – Lithium Americas Corp. (NYSE: LAC | TSX: LAC), Standard Lithium Ltd. (TSXV: SLI | NYSE.A: SLI), Piedmont Lithium Inc. (NASDAQ: PLL | ASX: PLL) (have a supply deal with Tesla), Cypress Development Corp. (TSXV: CYP | OTCQX: CYDVF), Ioneer Ltd (ASX: INR), Albemarle Corporation (NYSE: ALB).

Cobalt – Jervois Global Limited (ASX: JRV | TSXV: JRV), Electra Battery Materials Corporation (TSXV: ELBM | OTCQX: ELBMF) (previously First Cobalt), Global Energy Metals Corporation (TSXV: GEMC | OTCQB: GBLEF).

Graphite – Westwater Resources, Inc. (NYSE American: WWR), Syrah Resources Limited (ASX: SYR) (spherical graphite plant planned for USA).

Nickel – Global Energy Metals Corporation (TSXV: GEMC | OTCQB: GBLEF).

Rare Earths – Lynas Rare Earths Limited (ASX: LYC) (rare earths processing plant planned for USA).

Li-ion batteries – Magnis Energy Technologies Limited (ASX: MNS) – New York battery factory.

Li-ion battery recycling – Li-Cycle Holdings Corp. (NYSE: LICY) – Partnership with GM and LGES’s Ultium JV for a battery recycling facility in Ohio.

Closing remarks

In addition to the above-mentioned companies with U.S. projects it should be noted that allied countries such as Canada and Australia will also be needed to help supply critical materials. Several of these companies can be found here in our InvestorIntel member’s page.

The USA’s domestic production of green energy and the associated need for critical materials supplies has long been a major weak point for the USA to compete with China. It does look like the USA is finally taking some actions to catch up, albeit still about a decade behind China.

Investors can look to play this catch-up trend, and as we saw with Tesla, if you invest early the sky is the limit.

Disclosure: The author is long Tesla (NASDAQ: TSLA), MP Materials (NYSE: MP), Lithium Americas (TSX: LAC), Piedmont Lithium (ASX: PLL), Jervois Global (TSXV: JRV), Electra Battery Materials (TSXV: ELBM), Syrah Resources (ASX: SYR), Lynas Rare Earths (ASX: LYC), and Magnis Energy Technologies (ASX: MNS).




Offering exposure to Graphite and Lithium, Lomiko Metals may be one to watch

With all the news of the Russia-Ukraine crisis, many investors may not be aware of what’s been happening with critical materials. For example, lithium prices are up almost 10 times over the past 14 months from US$7,000/t to today’s US$67,424/t (CNY 426,500/t). Graphite prices look set to gain next in 2022. This is because electric vehicle (EV) batteries use a lot of lithium and graphite, and EV sales are booming, having risen by 108% in 2021, to reach 6.75 million vehicles. Given the popularity of EVs, I am expecting sales to exceed 10 million units in 2022, which means battery manufacturers will need a lot more lithium, graphite and other key metals.

BMI forecasts graphite deficits to begin from 2022 as demand for graphite grows strongly

Source: Lomiko company presentation

Today’s company is a junior miner with a focus on developing both its graphite project and its earn-in lithium project. The Company is Lomiko Metals Inc. (TSXV: LMR | OTCQB: LMRMF) (Lomiko).

Lomiko has two projects in Canada:

  • La Loutre Project (flagship) (100% interest) – A development stage graphite project in southern Quebec.
  • Bourier Project (70% earn in interest) – An exploration stage lithium project with multiple visible pegmatites in James Bay, Quebec Canada.

La Loutre Project (100% interest)

The La Loutre Project is spread over 2,867 ha and located 45 km by road from the city of Mont-Tremblant, in the Laurentides administrative region, Quebec, Canada. The Project has access to power, infrastructure & labor and is 192 km by highway to the Port of Montreal.

The Resource has an Indicated contained graphite of 1.044Mt @ 4.51% graphite and an Inferred contained graphite of 1.877Mt @ 4.01% graphite, based on a cut-off grade of 1.5% graphite.

The company’s PEA indicated an after-tax NPV8% of C$185.6 million, after-tax IRR of 21.5%, with a 15 year mine life producing about 100,000 tons/pa, based on a graphite price of US$916/t graphite (Cg). The initial CapEx was estimated at C$236.1 million, including mine pre-production, processing, infrastructure (roads, power line construction, co-disposal tailings facility, ancillary buildings, and water management). The OpEx was estimated at a cash cost of US$386 per tonne of graphite concentrate or a AISC of US$406/t graphite.

The key to note is that if we get higher graphite prices then the NPV will improve very significantly. For example, based on Lomiko’s sensitivity analysis the Project NPV would rise to C$601 million if graphite prices rose to $1,681/t.

La Loutre PEA highlights and location map

Source: Lomiko company presentation

The next steps for the Project include completing 4 full seasons of Environmental Baseline studies by the end of 2022, an updated Mineral Resource NI 43-101 Technical Report by October 2022, initiating and completing metallurgical studies to determine a processing method and product quality system, completing value-added testing for spherical graphite and battery compatibility.

Following the above would be the regular next steps of further feasibility studies (PFS, BFS), potential off-take agreements and project funding. So there is still quite a long way to go for the La Loutre Project, but at least it’s off to a solid start and the Project is in Canada.

The Bourier Project (potential to earn in up to 70%)

The Bourier Project is potentially a new lithium field in an established lithium district. It is owned by Critical Elements Lithium Corporation (TSXV: CRE | OTCQX: CRECF), which has entered into an agreement with Lomiko Metals whereby Lomiko may acquire up to 70% of the property by funding exploration activities and other considerations.

The Project consists of 10,252 hectares (102.52 km2) located on the Nemiscau greenstone belt and is south-east of the Istchee region in James Bay, Quebec, Canada. 

The Project is still at a very early stage of exploration; however, GoldSpot’s AI analysis has revealed considerable lithium potential. Lomiko states: “A total of 99 pegmatite bodies were added to the current geological map, highlighting previously unknown potential for economic lithium mineralization.”

The next steps include surface sampling of the initial 15 targets then a drilling campaign on key identified target areas.

The Bourier Project with an initial 15 exploration targets

Source: Lomiko company presentation

Closing remarks

This decade there is no getting away from the fact that the world will need a huge amount more of the key EV metals. Even last week the Pentagon announced a plan to boost rare earths and lithium stockpiles. The current Russia-Ukraine crisis volatility is resulting in lower stock prices for many EV metal companies which is opening up a great potential buying opportunity for long term investors.

Lomiko offers exposure to two Canadian Projects – The La Loutre Project with a good sized and reasonable grade graphite resource and a solid PEA, and the Bourier Project which has promising early-stage lithium exploration potential.

Lomiko Metals trades on a market cap of only C$19 million, which must be the best opportunity valued graphite-lithium junior in town. One to watch in 2022.




Northern Graphite moves to become a North American producer

Did you know that ‘graphite’ is on the list of 35 U.S critical minerals? It is because graphite is important in steel manufacturing and also in batteries. An average sized electric vehicle (“EV”) lithium-ion battery typically has about 55 kgs of graphite, larger size EVs can use 75-115 kgs per vehicle. This is why in 2016 Elon Musk famously said: “Our cells should be called Nickel-Graphite, because primarily the cathode is nickel and the anode side is graphite with silicon oxide.”

Graphite demand is set to soar this decade as EVs takeoff

Source: Northern Graphite company presentation

Today’s company has recently signed a company changing deal that will see them soon become a North American graphite producer, assuming the deal finalizes.

Northern Graphite to acquire two graphite mines from Imerys Group

Northern Graphite Corporation (TSXV: NGC) announced on December 2, 2021: “Northern Graphite to acquire two graphite mines from Imerys Group.”

The two graphite mines are the Lac des Iles, producing graphite mine in Quebec, Canada, and the Okanjande graphite deposit/Okorusu processing plant in Namibia. The purchase price is approximately US$40 million. Northern Graphite plans to fund the deal and raise extra working capital, according to a term sheet with Sprott Resource Streaming and Royalty Corp., through US$40 million in debt/royalty/stream financing plus a US$15 million (~C$20 million) private placement equity raise.

Northern Graphite CEO, Gregory Bowes, stated: “This is a truly transformational deal that will elevate Northern from one of over 20 junior graphite companies looking for project financing to being the only North American and the world’s third largest¹ non-Chinese graphite producing company.

Note: Bold emphasis by the author.

Northern Graphite’s existing graphite project

Northern Graphite owns the Bissett Creek Graphite Project located 100km east of North Bay, Ontario, Canada and close to major roads and infrastructure. The Company has completed an NI 43-101 Bankable Feasibility Study and received its major environmental permit. The next step is project financing. More details on the Bissett Creek project here.

Northern Graphite’s company goal and strategy

Northern Graphite is focused on becoming a world leading producer of natural graphite and on the upgrade of mine concentrates into high value products critical to the green energy revolution including lithium-ion battery anode material for EVs and stationary power systems, fuel cells, and graphene, as well as advanced industrial technologies. The upgrading of mine concentrates usually means upgrading flake graphite (sells at ~US$550-1,000/t) to active coated spherical graphite (sells at ~US$7,000+/t). Northern Graphite is not yet at this stage, but it is their plan to go in that direction, which makes good business sense, to increase profit margins. Manufacturing and selling graphene is another way to add value.

Source: Northern Graphite company presentation

Closing remarks

Northern Graphite has made a company changing deal by purchasing two graphite mines (and a processing plant) for only ~US$40 million. Combine this with their existing advanced stage Bissett Creek graphite Project, and Northern Graphite will own 3 graphite projects/mines, two in Canada and one in Namibia.

A key to the new acquisition is that the Quebec based Lac des Iles Mine is already a producing asset. The Okanjande is a fully operational, permitted, mine in Namibia (currently on care and maintenance). With graphite demand set to surge this decade as electric vehicles takeoff, the timing of the recent acquisition could not be any better and propels Northern Graphite from being a junior to being a North American graphite producer. Or as the company states: “Northern will become the only North American, and the world’s third largest non-Chinese, graphite producing company.”

The deal still needs to go through the usual approvals but is expected to finalize soon. Higher graphite prices are needed in the sector to make it more profitable; however, this may happen in 2022 as flake graphite is expected to move into deficit. Also, note the higher sovereign risk for the Namibia operation.

Northern Graphite Corporation trades on a market cap of only C$69 million. One to follow closely in 2022.




Targeting next generation silicon anode materials NEO Battery Materials up 387.5% in 2021

2021 will be remembered as the year that the western world woke up to the electric vehicle (EV) boom, especially boosted by the fact that global electric car sales look set to finish up about 100% YoY. So what will 2022 bring? I previously wrote here my top 3 stock picks for 2022 and here are my top 5 graphite miners to watch in 2022; but today’s company looks set to benefit from a little-known trend in the EV world.

That trend is the increasing use of silicon in battery anodes to boost battery performance, especially charging speed and energy density (range). This is because when a battery charges the rate of charge depends on how quickly the ‘anode’ can absorb or fill up with electrons. By adding silicon into the graphite anode it is better able to absorb more electrons and therefore the battery has better capacity. Companies continue to work on some of the challenges of silicon in anodes which include swelling, cracking and lower cycle life.

NEO Battery Materials is making progress in developing better silicon anode materials

Source

Today we look at NEO Battery Materials Ltd. (TSXV: NBM | OTCQB: NBMFF) (“NEO”) whose stock price rose 387.5% on the TSXV in 2021. NEO is a Canadian battery materials company with a current focus on developing silicon anode materials through an ion-and electron-conductive polymer nanocoating technology.

Looking back on 2021, NEO had a strong year (company highlights here) especially in building up both their technology and their team. You can read some more on that in my last article: Making lithium-ion battery components more durable and efficient to improve battery capacity. In that article, I discussed how NEO’s ‘pure’ silicon anode materials were already achieving much higher cycle-life than competitors (NEO is achieving 1,000 cycles) with the main benefit of silicon material in anodes being greater energy density and charging speeds. Conventional lithium-ion batteries with graphite anodes have a cycle life of between 2,000 and 5,000+ cycles.

It should be noted that there is today a growing market for silicon anode materials to be used as an additional material combined with a conventional graphite anode to boost performance. Tesla is one of many that use silicon-graphite anodes.

In recent months NEO has made further progress as shown by three recent significant announcements:

Within the three announcements above the key progress for NEO is the launch of 3 types of silicon (“Si”) anode active materials (NBMSiDE-P100, NBMSiDE-P200, and NBMSiDE-C100), and the fact that NEO is on schedule for semi-commercial scale production of these materials by the end of 2022. Regarding the 3 silicon anode materials NEO stated:

“The three types of products are manufactured through NEO’s proprietary nanocoating technology and are based on metallurgical-grade silicon with purities of at least 99.95%…..NEO’s technology significantly improves the life span and cycling stability compared to conventional metallurgical silicon-based particles.”

NEO President and CEO, Spencer Huh, stated: “We are very glad to bring the 3 types of silicon anode active prototypes to the market as a result of valuable research and development for the past 7 years. All our business developments are aligned with our plans and strategy, and we have complete confidence in pushing towards the semi-commercial plant facility in South Korea. NEO is positioning itself as a low-cost, robust Si anode materials supplier for electric vehicle lithium-ion batteries, and we are set to provide long-term value for all stakeholders.

Note: Bold emphasis by the author.

The Company also stated: “NEO is expediting the process of developing its 100% pure silicon anode based on CNT (carbon nanotube) conductive additives and new robust binder technologies, and is currently conducting research and progressing commercialization projects regarding the graphite/silicon composite anode through active collaboration with companies that have signed NDAs……..Our process that effectively reduces the cost of Si anode production will act as a stark point of differentiation compared to existing and potential competitors.”

NEO recently launched 3 types of silicon anode active materials (NBMSiDE-P100, NBMSiDE-P200, NBMSiDE-C100) 

Source: NEO Battery Materials announcement on December 6, 2021

Also of significance is that NEO has established and built its R&D Scale-Up Centre at the Yonsei University of South Korea through NEO Battery Materials Korea Co., Ltd., a wholly-owned subsidiary of the Company. NEO believes that this R&D center “could speed up further development of additional NBMSiDE pipelines of silicon anode active materials.”

Closing remarks

NEO is at the leading edge in developing lower cost silicon anode active materials and recently launched 3 new silicon anode materials products with another 2 to follow soon. Usually, once product samples are released it often leads to off-take agreements. Planned semi-commercial scale production of these materials by the end of 2022 offers a strong potential catalyst for investors.

NEO Battery Materials trades on market cap of C$34 million and is definitely a stock to watch closely in 2022.




Which Metals will benefit from the EV Boom in 2022 and after?

2021 has been a triumphant year for electric vehicle (EV) metal miner stocks. This is because EV sales are on track to grow ~100% on 2020 sales, which has led to surging demand for the EV metals lithium, cobalt, graphite, nickel, neodymium-praseodymium (NdPr), and dysprosium (Dy).

China lithium carbonate prices led the way rising from CNY 43,750 (US$6,859/t) to CNY 232,500 (US$36,452/t) in 2021, for a 5.3x gain. Cobalt prices have risen from US$14.51/lb to US$31.42/lb in 2021, for a 2.2x gain.

All of this demand for EV metals has also led to a surge in takeovers and strategic buy-ins in 2021. The Chinese have again led the charge leaving the Western world asleep at the wheel, as I discuss below.

China lithium carbonate prices have risen 5.3x so far in 2021

Source: Trading Economics

China leads the lithium takeover charge as the Western world is left asleep at the wheel

The same theme of the past several years continued in 2021. While the West talked about acting, China and even Russia acted, with China making some big moves.

Take a look at the lithium takeovers and buy-ins during 2021 summarized below.

  • Bacanora Lithium PLC (AIM: BCN) – Taken over recently by China’s Ganfeng Lithium.
  • International Lithium Corp. (TSXV: ILC) – Mariana Project final project share buyout by China’s Ganfeng Lithium.
  • Ioneer Ltd (ASX: INR) – South Africa’s Sibanye-Stillwater invested US$490 million for a 50% interest in the Rhyolite Ridge Lithium-Boron Project.
  • Millennial Lithium Corp. (TSXV: ML | OTCQX: MLNLF) – Bidding war (Ganfeng, CATL, LAC) eventually won by Canada’s Lithium Americas Corp. (TSX: LAC | NYSE: LAC) with a 100% company buyout offer for C$4.70 per share.
  • Neo Lithium Corp. (TSXV: NLC | OTCQX: NTTHF) – 100% company buyout by China’s Zijin Mining at C$6.50 per share.
  • Arena Minerals Inc. (TSXV: AN) – China’s Ganfeng Lithium project and equity stake, Lithium Americas initially equity stake then increased equity stake.
  • North America Lithium Inc. (“NAL”) – Australia’s Sayona Mining (ASX: SYA) (75%) & Piedmont Lithium Inc. (Nasdaq: PLL | ASX: PLL) (25%) acquire NAL.
  • AVZ Minerals Limited (ASX: AVZ) – Sold 24% of the Manono lithium and tin project JV to China’s Suzhou CATH Energy Technologies (jointly owned by Chinese battery maker CATL) for US240 million.
  • Global Lithium Resources (ASX: GL1) – China’s Yibin Tianyi (owned by CATL, the world’s largest battery manufacturer) to invest $6.2 million for a 9.9% equity interest in Global Lithium Resources.
  • Alpha Lithium Corporation (TSX.V: ALLI) – Russia State backed Uranium One (TSX: UUU) agrees to buy 15% of the Tollilar salar for US$30 million, option/right to buy a further 35% for US$185 million.

Of the ten mentioned above, six of the ten buyers are Chinese companies, one is Russian, one is South African, one is Canadian, and one is Australian. What is also interesting is that with the Alpha Lithium Tolillar salar deal the buyer is a Russian ‘state backed’ company with significant plans to acquire more global lithium assets.

2022 will see Tesla dramatically ramp up production and require significantly more EV metals

In 2022 Tesla is likely to exceed 1.5 million electric car sales, up from around what should be about 900,000 in 2021 (a 2/3rds production increase estimate for 2022). Tesla has their Texas gigafactory and their Berlin gigafactory about to open and officially start production, will be expanding giga Shanghai, and will see huge sales of Model Y, some Tesla Semis, and finally the start of production of their Cybertruck in late 2022. All of this will require a dramatic increase in EV metals demand from Tesla in 2022, potentially about a 66% increase based only on the 2/3rds increase in production forecast.

Chinese EV companies such as leader BYD Co with their own huge expansion plans, look set to chase Tesla again in 2022. They will also require significant additional volumes of lithium in 2022.

Global electric car sales look set to rise from 3.24 million in 2020 to exceed 6 million in 2021. My forecast for 2022 is 10 million.

Tesla is set for a huge increase in production in 2022 (Texas gigafactory as of August 31, 2021, set to open very soon)

Source: iStockphoto

Closing remarks

2021 saw the world wake up to the fact that electric vehicles are taking off and will largely replace conventional cars this decade, at least in most parts of the world. The ~100% surge in electric car sales during 2021 has caused an immediate impact on the EV metals supply chain, with a resulting huge 5.3x price increase in lithium, and large increases also in cobalt, nickel and NdPr prices. Graphite looks likely to follow next.

Meanwhile, the Chinese pounced yet again, buying up or into 6 of the 10 major lithium acquisitions in 2021. The other four were made up with one each from Russia, South Africa, Canada, and Australia. Sadly again the Americans were absent!

Will 2022, under Biden’s lead, finally see the US awaken. I think it is possible, after all Tesla is massively ramping up their production in 2022.

I hope 2022 will be the year the US wakes up and starts to secure their EV metals supply chain. Because if they don’t, the Chinese will continue to dominate EV supply chains globally leaving the US auto industry at their mercy.




The Top 5 graphite miners to watch in 2022 as battery materials’ prices rise

2021 has seen key electric vehicle (“EV”) and battery metals lithium, cobalt, nickel, and neodymium/praseodymium (NdPr) prices all rise strongly. But what about graphite?

It is starting to look like graphite will be next and 2022 will be graphite’s year. As reported on December 15, 2021 by Reuters:

“China EV, battery makers grapple with graphite squeeze……Chinese producers have their work cut out keeping up with global demand for graphite, which has surged along with rapid growth in the battery market in recent years…..Consultancy Benchmark Mineral Intelligence [BMI] sees a roughly 20,000 tonne graphite deficit in 2022, versus a similar-sized surplus last year…..Top global EV battery maker Contemporary Amperex Technology Co Ltd (CATL) (300750.SZ) is “desperate” to secure supply of key ingredients such as graphite to keep up with rising orders, said a person with knowledge of the matter.”

Top 5 graphite miners to watch in 2022 (in alphabetical order)

  1. Leading Edge Materials Corp.
  2. NextSource Materials Inc.
  3. Syrah Resources Limited
  4. Talga Group Ltd.
  5. Triton Minerals Limited

Leading Edge Materials Corp. (TSXV: LEM | OTCQB: LEMIF)

Leading Edge Materials Corp. (“Leading Edge”) is a Canadian company focused on developing a portfolio of critical raw material projects located in the European Union.

Leading Edge 100% owns the producing Woxna Graphite mine and processing plant in Sweden. Woxna has a Total Resource estimate of 10.7 Mt Measured & Indicated @ 7.75% graphite plus 2.51 Mt Inferred @ 8.16% graphite.

Leading Edge plans to build a vertically integrated mine to anode material production capability, by producing coated spherical purified graphite anode material. The Company has completed a PEA (June 2021 PEA) on the mine to anode material project. The post-tax NPV8% is US$248 million with a post tax IRR of 37.4%, over a 15 year mine life. Initial CapEx is US$121 million. The 2021 PEA is based on 159,967 tpa of graphite production and 7,435 tpa of coated spherical purified graphite (“CSPG”) production. Leading Edge states: “Operating cost per tonne of coated spherical purified graphite (CSPG) of $2,519 after revenue credit from micronized graphite product vs forecasted selling price of $10,000 per tonne.”

Interestingly, Leading Edge 100% own the Norra Kärr REE Rare earths project (dysprosium, terbium, and neodymium/praseodymium (NdPr)) in Sweden which has a PEA completed. Plus they own 51% (option to increase to 90%) of the Bihor Sud Nickel Cobalt exploration stage project in Romania.

Leading Edge trades on a market cap of only C$56 million. Significant potential upside if they can succeed in their plans.

NextSource Materials Inc. (TSX: NEXT | OTCQB: NSRCF)

NextSource Materials Inc. (“NEXT”) is rapidly developing its 100% owned Molo Graphite Project in Madagascar. Financially boosted by serious investors and new Chairman Sir Mick Davis, NEXT’s Molo Graphite Project is fully funded to stage 1 production. The Project is designed with a modular approach in mind with the first stage production target of 17,000 tpa of flake graphite. Stage 1 construction is underway with mine commissioning expected in Q2 2022. NEXT has a 10 year 35,000 tpa binding-offtake deal with Thyssenkrupp Materials Trading.

Stage 2 expansion is undergoing a Technical study to assess a production capacity of at least 150,000 tpa.

NEXT is also working on a three-way collaboration to build a Battery Anode Facility (“BAF”) with a targeted commissioning for Q4 2022. Companies in the collaboration have supply links to Panasonic-Tesla.

NEXT trades on a market cap of C$296 million and certainly could be the “next” graphite producer.

Syrah Resources Limited (ASX: SYR)

Syrah Resources (“Syrah”) 100% own the world’s largest and lowest cost graphite mine known as the Balama graphite mine, located in Mozambique. It has a 50+ years expected mine life. The past year’s low graphite prices forced the mine to dramatically reduce output but in their September 2021 Quarterly Report Syrah stated: “Balama delivered excellent monthly operational performance for September 2021 with 15kt natural graphite produced at 85% recovery and C1 cash costs (FOB Nacala) of US$430 per tonne…..Strong growth in sales order book with more than 50kt of natural graphite sales orders in the December 2021 quarter, demonstrating robust underlying demand conditions and forward contracting.” So, production is ramping back up again and demand is now running in excess of supply.

Syrah is also working to become a vertically integrated producer of natural graphite Active Anode Material (“AAM”). Syrah has built a pilot AAM facility at Vidalia, Louisiana, USA. The facility has produced initial product samples that are being tested by potential off-takers. The initial stage plan is to ramp up to 10,000 tpa of AAM with discussions ongoing about a larger ramp.

Syrah Resources trades on a market cap of A$640 million. Certainly not a huge market cap for the world’s premier graphite producer. It looks like there are better times ahead for Syrah Resources.

Talga Group Ltd. (ASX: TLG)

Talga Group (“Talga”) 100% own a number of graphite projects located in northern Sweden. Their three advanced projects are Vittangi, Jalkunen and Raitajärvi. Combined they contain JORC resources of 55.3Mt @ 17.5% Cg for 9.7Mt total contained natural graphite. Permitting is underway at their leading Vittangi Project.

Talga has also developed a coated natural graphite anode product (Talnode®-C) and a graphene silicon composite electrode additive (Talnode®-S).

Talga has signed a non-binding LOI with LKAB and Mitsui for a potential JV and development partnership in the mine-to-anode production operation.

Talga Group trades on a market cap of A$472 million. One to watch.

Triton Minerals Limited (ASX: TON)

Triton Minerals (“Triton”) 100% own the Ancuabe Graphite Project in northeast Mozambique. The Ancuabe JORC Ore Reserve is 24.9Mt at 6.2% TGC for 1.544 million tonnes of contained graphite. The December 2017 PFS was based on 60,000 tpa production supporting a mine life of 27 years. The pre-tax NPV10% is US$298 million, and pre-tax IRR is 36.8%. Pre-production CapEx is estimated at US$99.4 million.

In 2019, China’s Jigao International Investment Development Co (a subsidiary of Jinan Hi Tech) invested $19.5 million into Triton Minerals to become a strategic partner. Ancuabe has received final approval for development (mining concession granted and environmental approval), and has ~50% of anticipated Ancuabe production secured by binding off-take agreements. Jigao is assisting with further off-take and Project funding.

Triton plans next to build a commercial Pilot Plant which can be ramped up into production in the near term to produce commercially viable quantities of concentrate to prove the viability of the Project.

Triton Minerals trades on a market cap of A$38 million. Triton did have a problem at their other project called Balama North Project (Nicanda Hill) (lost their lease) which may have hurt sentiment for the stock. Still looks very cheap with strong Chinese support and a low initial startup CapEx.

Other graphite related stocks to watch in 2022

  • NEO Battery Materials Ltd. (TSXV: NBM | OTCQB: NBMFF). Silicon anode and graphite-silicon anode company. You can read about NEO here.
  • Magnis Energy Technologies Limited (ASX: MNS) – Graphite development project plus Li-ion battery factories on the way.
  • Zentek Ltd (TSXV: ZEN) (formerly ZEN Graphene Solutions). A dynamic graphene/ nanotech/ health company. You can read a recent article here that discusses their amazing progress.

Closing remarks

2022 looks like being ‘graphite’s time to shine’ after many tough years. Assuming EV sales continue to grow strongly in 2022 then a graphite shortage looks likely. If this occurs, then it would not be hard to see graphite prices tripling in 2022, just as lithium prices have increased 5x in 2021.

The graphite producers with low costs, ability to rapidly scale production, and ideally offer value-added products should perform best. The graphite juniors that can rapidly progress their projects can also do very well.

Disclosure: The author is long Leading Edge Materials (TSXV: LEM), Syrah Resources (ASX: SYR), and Triton Minerals (ASX: TON).




Australian Government extends a $2 Billion loan facility for the critical materials industry

Australia might be a laggard in supporting electric vehicles and reducing greenhouse gases; but the Australian Government is stepping up to support the mining industry via a new policy for ‘Australian critical minerals projects’. This is good news for critical mineral junior miners with Australian projects.

You can review the U.S list of 35 critical minerals here. Those of most interest would include lithium, graphite, cobalt, nickel, rare earths, vanadium, tin, manganese, aluminum, uranium, and scandium; as they play a role in the new energy economy of EVs, energy storage, nuclear energy, solar and wind turbine electricity generation.

According to the International Energy Agency (IEA): “A typical electric car requires six times the mineral inputs of a conventional car, and an offshore wind plant requires thirteen times more mineral resources than a similarly sized gasfired power plant.”

IEA forecast demand increase from 2020 to 2040 to reach a sustainable development scenario

Source: IEA: The Role of Critical Minerals in Clean Energy Transitions – May 2021

Australian critical minerals projects to receive a A$2 billion boost

On September 28, 2021 the Australian Government announced:

“(it) will establish a $2 billion loan facility for Australian critical minerals projects to help secure the vital supplies of resources needed to drive the new energy economy and support the resources jobs of the future……Australia has among the world’s largest recoverable reserves of the critical minerals used in advanced technologies, such as renewable energy, aerospace, defence, automotive and electric vehicles in particular, telecommunications and agri-tech……Prime Minister Scott Morrison said the fund would effectively help fill finance gaps in critical minerals resources developments to get them off the ground……Global demand for critical minerals needed for clean technology applications, like high powered magnets and batteries, are expected to grow exponentially over the coming decades.”

It is probably no coincidence that the Australian Prime Minister has just returned from a USA trip to secure military defense and other support from the ‘Quad alliance’ (Quadrilateral Security Dialogue), involving USA, Japan, India and Australia. Whilst in the USA, President Biden would possibly have been pushing for better critical raw materials supply chain from Australia. And voila!

The Australian Government’s announcement was rather short on details, but did state:

“The $2 billion Critical Minerals Facility will be managed by Export Finance Australia and report to the Minister for Trade, Tourism and Investment Dan Tehan. It will operate on the National Interest Account for 10 years or until finance equivalent to $2 billion has been provided.”

Some junior critical miners with Australian projects that could stand to potentially benefit (in alphabetical order)

  • Ardea Resources Limited (ASX: ARL) – Kalgoorlie nickel-cobalt project in Western Australia (WA).
  • Australian Strategic Materials Limited (ASX: ASM) – The Dubbo rare earths project in NSW, Australia.
  • Australian Vanadium Limited (ASX: AVL) –  The Australian Vanadium Project in WA, which has Federal Major Project Status.
  • Cobalt Blue Holdings Limited (ASX: COB) – Broken Hill Cobalt Project in NSW, Australia.
  • Global Energy Metals Corporation (TSXV: GEMC) – Millennial & Mt Isa cobalt-copper-gold Projects in Qld, Australia.
  • Havilah Resources Limited (ASX: HAV) – Mutooroo copper-cobalt project and Kalkaroo copper-gold-cobalt project in SA.
  • Liontown Resources Limited (ASX: LTR) – Kathleen Valley Lithium Project in WA.
  • Magnis Energy Technologies Ltd. (ASX: MNS) –  Imperium3 JV lithium-ion battery cell manufacturing project in Townsville, Qld, Australia.
  • Neometals Ltd. (ASX: NMT) – Barrambie titanium and vanadium project in Western Australia. Plus battery recycling technology and lithium extraction technology.
  • Sayona Mining Limited (ASX: SYA) – Pilbara lithium assets and the East Kimberley Graphite Project.
  • Scandium International Mining Corp. (TSX: SCY) – Nyngan Scandium Project in NSW, Australia. Also, its ion exchange (IX) technology to extract critical materials and its High Purity Alumina, HPA , processing technology.

Closing remarks

With the UN Climate Change Conference (COP26) in Glasgow only a month away (Nov. 1-12, 2021) expect to hear a lot more countries announce progress towards, and updated, emissions targets.

The Australian Government A$2 billion (~US$1.44 billion) critical minerals projects’ loan facility is a good start but much more will be needed if we are to move to a fully sustainable future and reduce emissions to hit our global emission reduction targets.

At least for now the junior critical miners (Australia based projects) have had a substantial boost and let’s hope there is more to come from Australia and other countries to help support the cause.

Disclosure: The author is long ASX: ARL, ASX: AVL, ASX: COB, TSXV: GEMC, ASX: HAV, ASX: MNS, ASX: NMT, TSX: SCY.




ZEN Graphene is changing the world one nanomaterial at a time

Scientists have not unanimously settled on a precise definition of nanomaterials, but agree that they are partially characterized by their tiny size, measured in nanometers. A nanometer is one millionth of a millimeter – approximately 100,000 times smaller than the diameter of a human hair. For a while, nanomaterials were going to save the world by making everything faster, stronger and maybe even higher. But Olympic motto aside, there was a lot of hype about nanomaterials and a decade(s) later not much to show for all that optimism. Or maybe there is if you look in the right places.

Nano-sized particles exist in nature and can be created from a variety of products, such as carbon or minerals like silver, but nanomaterials by definition must have at least one dimension that is less than approximately 100 nanometers. One such company that is making progress in the world of nanomaterials is ZEN Graphene Solutions Ltd. (TSXV: ZEN), despite starting life as a mining company. In fact, the Company still maintains its unique Albany Graphite Project, which provides the company with a potential long-term competitive advantage in the graphene market. The unique genesis of the Albany deposit, resulting in very fine-grained graphite crystallites, yields an ideal graphite precursor material for conversion to high-value graphene, graphene oxide and graphene quantum dots that can be used in a wide variety of applications.

However, don’t kid yourself into thinking this is a mining story. It is very much a technology story that has evolved out of the special characteristics of the graphite available at the Albany deposit. ZEN has a broad reach as far as solutions being derived from nanomaterials. Front and center is the ZENGuard™ antimicrobial coating which can be utilized on PPE, filtration media (HVAC filters) and other materials such as paper, cardboard etc. as a preventative ‘catch-and-kill’ mechanism. The Company has developed a non-toxic, antimicrobial coating that is 99+% effective against numerous pathogens, including COVID-19, with initial testing showing a further 98% effectiveness after 108 days. ZENGuard™ on masks, gloves and other PPE to protect front-line workers, the public and reduce the spread of pathogens (including and beyond COVID-19) has an estimated global market of US$52 billion. While the potential market for ZENGuard™ on air filters to kill airborne pathogens in homes, schools, hospitals and commercial and industrial spaces is estimated at US$66 billion. Not a bad starting point.

As a spin-out from the focus on everything COVID-19, ZEN recently announced exclusive worldwide rights to commercialize rapid, saliva-based COVID-19 antigen testing technology in partnership with McMaster University. This technology is exceptionally accurate (similar to current PCR tests), saliva-based, affordable, scalable and provides results in under 10 minutes. It appears we aren’t going to rid ourselves of this pesky virus anytime soon. So perhaps the best solution to getting on with some semblance of normal is accurate, rapid testing.

Being an optimist and looking beyond COVID-19 and hopefully no other mutation or pathogens running amok in public, we find that ZEN has developed a stable diesel fuel additive, which increased the performance of diesel fuel by up to 10% in initial testing. Greg Fenton, ZEN CEO commented: “With global market estimates for diesel fuel alone near $1 trillion, the size of the challenge to reduce emissions from this level of demand is massive, but so is the opportunity for novel solutions to help us be more efficient in our usage.” Regardless of whether you want zero emissions tomorrow, as long as everyone continues to order stuff off Amazon and you want fresh fruit in your grocery store, diesel demand is going to be with us for a while. So rather than be an environmental zealot, why not embrace solutions that help reduce emissions in the interim until we can finally achieve our ultimate goal. Which is a good segue into research ZEN is doing into lower-cost, reduced weight, higher performance and capacity energy storage applications by developing graphene-wrapped silicon anodes for Li-ion batteries.

Then there’s the classic stereotype of nanomaterials making everything better. ZEN has its fingers in corrosion protective coating for reduced corrosion and enhanced longevity for steel. Polymers that enhance strength, longevity, and conductivity that can be used as versatile replacements for metallic electromagnetic shields. There’s also enhanced strength and electrical conductivity aluminum for the automotive industry and enhanced strength and longevity cement based composites for the construction industry. I’m probably missing something but you get the picture.

On a final note, on June 16th ZEN and Trebor Rx Corp. provided an update on the Health Canada review process for the ZENGuardTM-enhanced, ASTM level 3 surgical mask. Clearly, the sooner they can get approvals and get mask production underway, the sooner they can start to realize the revenue from the Trebor agreement signed in November 2020 or a minimum of 100 million masks/filters. As a prospective investor, this is the news I’m eagerly awaiting.