The demand for palladium, a precious metal with unique properties and diverse industrial applications, has surged in recent years, driving increased interest in palladium mining stocks. As investors seek exposure to this lucrative market, understanding the dynamics of the palladium mining sector becomes crucial. In this article, we delve into the market for Palladium Mining Stocks, exploring the factors driving demand, the challenges faced by producers, and the opportunities for investors.
Supply and Demand Dynamics for Palladium Mining Stocks
The supply of palladium is primarily sourced from mining operations, with major producers located in countries such as Russia, South Africa, and Canada. However, geopolitical tensions, labor disputes, and regulatory challenges can impact production levels and supply chain dynamics, leading to fluctuations in the market. Understanding the balance between supply and demand is essential for assessing the long-term prospects of palladium mining stocks.
Technological Advances and Innovation
Advancements in mining technologies and extraction methods have enabled palladium mining companies to access previously untapped reserves and improve operational efficiency. Innovations in exploration techniques, ore processing, and environmental management play a crucial role in driving productivity and profitability in the palladium mining sector. Investors should consider the technological capabilities and innovation strategies of mining companies when evaluating investment opportunities.
Environmental and Regulatory Considerations
Palladium mining operations often face scrutiny from environmental regulators and stakeholders due to their potential impact on local ecosystems and communities. Sustainable mining practices, responsible resource management, and adherence to environmental regulations are increasingly important factors for investors seeking to mitigate risk and align their investments with environmental, social, and governance (ESG) principles.
Market Volatility and Risk Management
Like any commodity market, the price of palladium is subject to volatility, influenced by factors such as economic conditions, geopolitical events, and supply chain disruptions. Investors should be aware of the inherent risks associated with investing in palladium mining stocks and employ risk management strategies to mitigate exposure to market fluctuations. Diversification, hedging, and thorough due diligence are essential components of effective risk management in the palladium mining sector.
Investment Opportunities and Growth Potential
Despite the inherent risks, palladium mining stocks offer attractive investment opportunities for investors seeking exposure to the precious metals market. As demand for palladium continues to rise, driven by growth in the automotive sector, mining companies with strong production capabilities, strategic reserves, and innovative technologies are well-positioned to capitalize on market opportunities and deliver long-term value to shareholders.
Global Economic Trends and Industrial Demand
The demand for palladium is closely tied to global economic trends, particularly in sectors such as automotive manufacturing, electronics, and jewelry. Economic growth, consumer spending patterns, and industrial production levels influence the demand for palladium-containing products and ultimately impact the price of the metal. Investors should monitor macroeconomic indicators and industry trends to assess the outlook for palladium demand and identify investment opportunities in the mining sector.
Geopolitical Risks and Supply Chain Disruptions
Geopolitical factors such as trade tensions, sanctions, and geopolitical conflicts can disrupt the global supply of palladium, leading to supply shortages or disruptions in key producing regions. Political instability, regulatory changes, and labor disputes can also affect the operations of palladium mining companies and impact their ability to meet production targets. Investors should assess geopolitical risks and consider diversifying their portfolios to mitigate exposure to potential supply chain disruptions.
Financing and Capital Expenditure Requirements
Palladium mining projects require significant upfront capital investment for exploration, development, and infrastructure construction. Financing challenges, fluctuations in commodity prices, and access to capital markets can affect the ability of mining companies to fund their operations and execute growth strategies. Investors should evaluate the financial health and capital expenditure plans of palladium mining companies to assess their ability to sustain operations and drive long-term value creation.
Long-term Sustainability and Social Responsibility
As sustainability and social responsibility become increasingly important considerations for investors, palladium mining companies are facing growing pressure to demonstrate their commitment to environmental stewardship, community engagement, and ethical business practices. Investors should prioritize companies with strong sustainability initiatives, transparent reporting practices, and a positive track record of social and environmental responsibility. By investing in companies that prioritize sustainability and corporate social responsibility, investors can align their financial goals with their values and contribute to positive social and environmental outcomes in the communities where mining operations are located.
Technological Risks and Disruptions
Advancements in technology, such as the development of alternative materials or manufacturing processes, could potentially disrupt the demand for palladium or reduce its value in certain applications. For example, the rise of electric vehicles (EVs) equipped with batteries that do not require palladium-containing catalytic converters could impact the automotive demand for the metal in the long term. Investors should stay abreast of technological developments and assess their potential impact on the future demand for palladium.
Exploration and Development Pipeline
The success of palladium mining companies often hinges on their ability to replenish reserves through exploration and development activities. Investors should evaluate the exploration and development pipeline of mining companies, considering factors such as the size and quality of identified mineral resources, the feasibility of extraction, and the timeline for project development. Companies with robust exploration portfolios and a track record of successful resource expansion may offer attractive investment opportunities for long-term growth.
Market Sentiment and Speculative Trading
The price of palladium and the performance of palladium mining stocks can be influenced by market sentiment, investor sentiment, and speculative trading activities. Short-term fluctuations in the price of palladium may not always reflect underlying supply and demand fundamentals but instead result from speculative trading or investor sentiment. Investors should be aware of market dynamics and exercise caution when interpreting short-term price movements, focusing instead on long-term trends and fundamental analysis.
Conclusion
In conclusion, understanding the market for Palladium mining stocks requires a comprehensive analysis of supply and demand dynamics, technological advancements, environmental considerations, and risk management strategies. While the palladium mining sector offers promising investment opportunities, investors should conduct thorough due diligence and consider the unique challenges and opportunities inherent in the market. By staying informed and adopting a disciplined investment approach, investors can navigate the complexities of the palladium mining sector and potentially capitalize on the growth potential of this valuable commodity.
In the midst of a global energy transition, lithium mining companies have emerged as pivotal players in reshaping the landscape of power generation and storage. As the demand for renewable energy sources surges and electric vehicles become increasingly prevalent, the need for lithium—the essential component in rechargeable batteries—has skyrocketed. This article delves into the role of lithium mining companies in driving this transformative shift towards sustainable energy solutions.
The Rise of Lithium in LithiumMining Companies
Lithium, once a relatively obscure element, has now become synonymous with the future of energy. Its exceptional conductivity and lightweight properties make it indispensable in lithium-ion batteries, which power everything from smartphones and laptops to electric vehicles (EVs) and grid-scale energy storage systems. This surge in demand has sparked a global race to secure lithium reserves, driving a boom in lithium mining operations worldwide.
Mining Operations and Environmental Impact
Lithium extraction predominantly occurs through two methods: traditional hard-rock mining and brine extraction from salt flats. Both processes present environmental challenges, including water consumption, habitat disruption, and the release of greenhouse gases. However, innovative techniques and sustainable practices are being developed to mitigate these impacts. Companies are investing in technologies such as water recycling, solar-powered operations, and advanced extraction methods to minimize their environmental footprint.
Driving the Electric Vehicle Revolution
One of the most significant impacts of lithium mining companies lies in their contribution to the electrification of transportation. As governments around the world implement stringent emission regulations and consumers increasingly prioritize sustainability, the demand for electric vehicles continues to soar. Lithium-ion batteries are the heart of electric vehicles, and mining companies play a crucial role in ensuring a steady supply of this vital resource to support the EV revolution.
Enabling Renewable Energy Integration
In addition to powering electric vehicles, lithium-ion batteries are essential for storing energy generated from renewable sources such as solar and wind. The intermittency of renewable energy production necessitates efficient energy storage solutions to ensure grid stability and reliability. Lithium-ion batteries provide a versatile and scalable option for storing excess energy during periods of high generation and releasing it when demand peaks. Lithium mining companies are thus facilitating the integration of renewable energy into the grid, accelerating the transition towards a cleaner and more sustainable energy mix.
Investment and Innovation
The growing demand for lithium has attracted significant investment in mining projects and technological innovation. Companies are exploring new lithium reserves, improving extraction processes, and investing in research and development to enhance battery performance and longevity. This influx of capital and innovation not only drives down costs but also accelerates the advancement of energy storage technologies, paving the way for a future powered by renewable energy.
Challenges and Opportunities
Despite its promising potential, the lithium industry faces several challenges, including geopolitical tensions over resource access, supply chain vulnerabilities, and social and environmental concerns associated with mining operations. Addressing these challenges will require collaboration among industry stakeholders, governments, and communities to ensure responsible and sustainable lithium production.
Emerging Markets and Global Supply Chains
As demand for lithium-ion batteries continues to escalate, lithium mining companies are expanding their operations into new regions to meet growing market needs. Countries with abundant lithium reserves, such as Australia, Chile, and Argentina, are witnessing a surge in mining activities, while others are exploring potential reserves to diversify their economies. This globalization of lithium supply chains underscores the interconnectedness of the energy transition on a global scale. It highlights the need for strategic partnerships and investment in infrastructure to ensure a reliable and resilient supply chain.
Technological Advancements and Material Innovations
Innovation is driving significant advancements in lithium extraction and battery technology. From novel extraction techniques that minimize environmental impact to the development of solid-state batteries with higher energy density and longer lifespan, ongoing research and development efforts are unlocking new possibilities for the lithium industry. Additionally, the exploration of alternative materials, such as lithium-sulfur and lithium-air batteries, holds promise for further improving battery performance and reducing reliance on scarce resources. Lithium mining companies are actively investing in these innovations to stay competitive and drive the evolution of energy storage technologies.
Supply Chain Sustainability and Ethical Sourcing
With increased scrutiny on environmental and social responsibility, lithium mining companies are facing growing pressure to ensure sustainable and ethical practices throughout their supply chains. From labor conditions in mining operations to the sourcing of raw materials and the disposal of end-of-life batteries, stakeholders are demanding greater transparency and accountability. Companies are responding by implementing standards such as the Responsible Lithium Initiative and adopting certification programs to demonstrate their commitment to ethical sourcing and responsible stewardship of natural resources.
Policy and Regulatory Landscape
Government policies and regulations play a significant role in shaping the trajectory of the lithium industry. From incentives for electric vehicle adoption to regulations on emissions and recycling, policymakers are increasingly recognizing the importance of lithium mining and battery manufacturing in achieving climate and energy goals. Strategic policy interventions, such as investment incentives, research funding, and environmental regulations, can accelerate the development and deployment of lithium-based technologies while ensuring a level playing field for industry players.
Community Engagement and Stakeholder Collaboration
As lithium mining operations expand into new regions, engaging with local communities and stakeholders is essential to building trust, addressing concerns, and fostering inclusive development. Companies are investing in community development programs, environmental stewardship initiatives, and consultation processes to ensure that the benefits of mining are shared equitably and that the impacts are mitigated responsibly. Collaborating with indigenous peoples, environmental organizations, and government agencies can lead to more sustainable outcomes and foster long-term partnerships based on mutual respect and shared values.
Conclusion
Lithium mining companies are at the forefront of a transformative shift towards a more sustainable energy landscape. By supplying the essential raw material for lithium-ion batteries, these companies are driving the adoption of electric vehicles, enabling the integration of renewable energy, and reshaping the way we produce and consume power. As we continue to navigate the complexities of the energy transition, the role of lithium mining companies will remain central to building a cleaner, greener, and more resilient future.
In the ever-evolving landscape of energy storage and sustainable technology, lithium has emerged as a crucial component, powering the batteries that fuel our electric vehicles, smartphones, and renewable energy systems. As the demand for lithium continues to rise, investors and stakeholders are increasingly turning their attention to lithium mining companies. This article explores the myriad benefits of choosing to invest in or partner with lithium mining companies.
Rising Global Demand for Lithium Mining Companies
The shift towards renewable energy sources and the rapid growth of the electric vehicle market has fueled a surge in demand for lithium. Lithium-ion batteries, known for their high energy density and longer life cycles, are at the forefront of this transition. Choosing lithium mining companies allows investors to tap into a market with a continually growing appetite for this essential element.
Strategic Positioning in the Electric Vehicle Revolution
The automotive industry is undergoing a significant transformation with the rise of electric vehicles (EVs). Lithium is a key component in the batteries that power these vehicles. By investing in lithium mining companies, stakeholders position themselves at the heart of the electric vehicle revolution, capitalizing on the increasing global adoption of cleaner and more sustainable transportation solutions.
Diversification of Energy Storage Solutions
Beyond electric vehicles, lithium-ion batteries are integral to energy storage solutions for renewable energy sources like solar and wind. Lithium mining companies play a crucial role in supporting the development and deployment of energy storage technologies, contributing to the overall diversification of the global energy landscape and the reduction of dependence on traditional fossil fuels.
Technological Advancements and Innovation
Lithium mining companies are at the forefront of technological advancements in extraction, processing, and battery technology. Investment in these companies fosters innovation, leading to more efficient and sustainable lithium production methods. This commitment to technological progress positions investors on the cutting edge of an industry that continually strives to enhance its environmental footprint and operational efficiency.
Supply Chain Security
As lithium becomes a critical component in various industries, ensuring a stable and secure supply chain is paramount. Investing in lithium mining companies provides a direct stake in the extraction and production processes, mitigating risks associated with supply chain disruptions. This strategic advantage is particularly crucial for industries reliant on lithium for their core operations.
Environmental and Social Responsibility
Many lithium mining companies are actively working towards sustainable and responsible mining practices. Investors can align their portfolios with companies committed to minimizing environmental impact, adopting ethical labor practices, and contributing to local communities. This commitment to environmental and social responsibility not only enhances a company's reputation but also aligns with the growing global emphasis on sustainable business practices.
Global Geopolitical Considerations
Lithium reserves are not evenly distributed across the globe, with a significant portion concentrated in specific regions such as South America, Australia, and parts of Africa. Investing in lithium mining companies provides an opportunity for diversification across geopolitical regions, reducing dependency on specific countries for the supply of this critical resource. This can be particularly appealing in a world where geopolitical tensions and trade dynamics can impact commodity markets.
Market Growth and Revenue Potential
The lithium market is dynamic and exhibits strong growth potential. As technology evolves and new applications for lithium emerge, such as grid-scale energy storage and portable electronic devices, the demand for this versatile metal is likely to continue expanding. Choosing lithium mining companies positions investors to capitalize on these diverse revenue streams and the ongoing evolution of lithium applications.
Emerging Technologies and Beyond Lithium-Ion
While lithium-ion batteries dominate the current energy storage landscape, ongoing research and development are exploring alternative technologies. Lithium mining companies often engage in research to discover and develop new battery technologies, such as solid-state batteries or lithium-sulfur batteries. By investing in these companies, stakeholders align themselves with the evolving landscape of energy storage, potentially reaping rewards from breakthrough innovations.
Investment in Downstream Activities
Lithium mining companies are not limited to just the extraction of lithium; many are involved in downstream activities, including refining, battery manufacturing, and recycling. Investing in vertically integrated companies allows stakeholders to capture value across the entire supply chain, from raw material extraction to the production of finished battery products. This holistic approach can provide more stable returns and insulation from volatility in specific market segments.
Governmental Support and Incentives
As governments worldwide emphasize the importance of transitioning to clean energy and reducing carbon emissions, many are providing support and incentives for the development of lithium mining and processing infrastructure. Investing in lithium mining companies can offer access to these governmental initiatives, providing additional financial benefits and regulatory support for sustainable and responsible lithium production.
Long-Term Sustainability Trends
The global shift towards sustainability and the circular economy is driving increased awareness of responsible resource management. Lithium mining companies that embrace sustainable practices and commit to minimizing their environmental impact are well-positioned to align with these long-term trends. Investors seeking sustainable and ethical investment opportunities may find lithium mining companies that prioritize environmental stewardship appealing.
Collaboration with End Users and OEMs
Lithium mining companies often establish partnerships and collaborations with end-users, original equipment manufacturers (OEMs), and technology companies. These collaborations can lead to mutually beneficial relationships, ensuring a steady demand for lithium products. Strategic alliances may involve joint ventures in research and development, customization of lithium products based on specific industry needs, and long-term supply agreements, enhancing the stability and growth potential of the investment.
Investment in Exploration and Reserves Expansion
To meet the growing demand for lithium, mining companies continually invest in exploration activities to identify and develop new lithium deposits. By investing in these companies, stakeholders participate in the potential discovery of untapped lithium resources and the expansion of reserves. A robust reserve base ensures a stable supply in the face of increasing demand, contributing to the long-term viability of the industry.
Conclusion
The benefits of choosing lithium mining companies extend beyond financial gains, encompassing strategic positioning in burgeoning markets, technological innovation, and a commitment to sustainability. As the world continues its transition towards cleaner and more sustainable energy solutions, lithium mining companies offer a compelling investment opportunity for those seeking both financial returns and a positive impact on the future of our planet.
Mining businesses are at the vanguard of this complicated dance between human inventiveness and the richness of nature, which is the exploitation of minerals and resources. We are going to take a deeper look at what makes a mining firm successful, one that goes beyond simple resource exploitation. The story of a mining company's success is woven together beyond the drill rigs and explosives by a tapestry of technical skill, environmental management, moral behavior, and social responsibility.
Let's explore the essential characteristics that not only set these businesses apart in the industry but also leave a lasting impression on the communities and landscapes they pass through. Greetings from the land below, where the attributes of a mining corporation reveal themselves like layers of valuable minerals just waiting to be unearthed.
Technical Masteryof Mining Company
A mining company's success is based on its technological expertise. This comprises sophisticated geological understanding, cutting-edge technology for exploration, and effective extraction procedures. The capacity to precisely locate and evaluate mineral resources and use state-of-the-art extraction techniques guarantees maximum resource recovery with the least amount of negative environmental effects.
mining company
Ecology Prudence
Prosperous mining firms give sustainable practices and environmental stewardship top priority in a period of growing environmental consciousness. A dedication to maintaining long-term ecological balance may be seen in the use of ethical mining practices, land reclamation, and biodiversity protection initiatives. Socially responsible mining companies are characterized by their adherence to regulatory norms for environmental protection, frequently surpassing them.
Prioritizing Safety
Because mining is a dangerous industry by nature, a commitment to employee safety cannot be compromised. To reduce hazards and provide a safe working environment, a prosperous mining firm makes frequent training, equipment upgrades, and extensive safety program investments. Putting employees' health and well-being first not only saves lives but also improves overall operational effectiveness.
Moral Conduct
Any successful company must have integrity, and the mining industry is no different. Ethical mining firms all highly value fair work policies, community participation, and transparency. A mining company's overall ethical position is influenced by its interactions with stakeholders, local communities and respect for the rights of indigenous populations.
Innovation and Adaptability
The mining industry is dynamic, with technological advancements continually reshaping the landscape. Successful mining companies embrace innovation and invest in research and development to stay ahead of the curve. This includes the adoption of automation, data analytics, and sustainable mining technologies. A forward-thinking approach ensures adaptability to market fluctuations and changing regulatory landscapes.
Creativity and Flexibility
Innovations in technology are constantly changing the face of the mining sector. To keep ahead of the curve, prosperous mining firms embrace innovation and make research and development investments. This covers the use of data analytics, automation, and environmentally friendly mining technology. Having a forward-thinking approach guarantees flexibility in response to shifting regulatory environments and market swings.
Prudence in Finance
A mining company's capacity to survive depends on its ability to handle its finances well. This calls for wise planning, successful cost-cutting techniques, and well-considered investment choices. Prosperous mining firms maintain an equilibrium between immediate financial benefits and enduring viability, guaranteeing steadiness and adaptability amongst economic fluctuations.
Conclusion
A mining companycan succeed depending on its ability to successfully integrate technological know-how, moral behavior, and social responsibility. Businesses that exhibit these traits are well-positioned to guide the mining sector toward a more conscientious and sustainable future.
Let us bring back from the depths of this adventure the knowledge that a genuinely successful mining firm is more than just an expert at extraction; it is also a steward of the planet's resources, a bulwark of integrity, a partner in advancement, and a protector of safety. These attributes shine in the dynamic dance between industry and environment, serving as the cornerstone for a thriving and sustainable future.
After seeing the performance of most lithium mining stocks lately one can understand why a lot of long term investors have been throwing in the towel and taking their money elsewhere. I wrote in the past article here that a lot of old gold bug money held in family trusts was being taken out and going into the digital space of crypto currencies like bitcoin. One only has to look at data and charts like the one posted below that money for metal mining has been falling steadily. Some would argue that news mines are not needed like before because of new technologies in recycling of these metals. Those people who argue the recycling gig are only partially true because as the world continues to grow and expand, so do the materials needed for the infastructure.
Now if there is one place in mining that money will go, I believe that will be in the exploration and extraction of lithium. Whether it be clays, brines or hard rock, I believe that for those who position themselves now with good quality lithium miners and explorers will see their investments outperform any of the other types of resources whether it be exploration or extraction. Like it or not the green revolution that the greenies always wanted is coming and there are opportunities for juniors and investors to profit from it.(Note: This is by NO means investment advise. I’ve been known to be wrong many times before and I will be the first to admit to )
Know More About Lithium
But my reasoning for this belief is in the numbers. Under the new Biden administration as well as governments around the world, the push towards electric cars is now in high gear. All auto companies are racing ahead to compete with each other in the EV space. While everyone in the western world though seems to focus on Tesla and it’s giga factories in Nevada, China is building more cars than most of the entire world combined. According to the International Energy Agency in 2019 there were already 2.58 million battery electric vehicles in China, compared to just 0.97 million in Europe, and 0.88 million in the USA. Each of these cars needs a battery of some kind and the most popular batteries need a particular element and the element is lithium.
Now I am not saying to not invest in any of the lithium juniors that are working in places like Nevada. I myself have bought and sold some of those juniors and they have performed extremely well. Juniors like Neo Lithium TSX-V:NCL have seen their stock price up almost 800% this year. America Lithium TSX-V:LI has seen it’s stock rise over 1000%. All of this is due to the fact that Tesla is looking to buy into a lithium deposit close to home and being that Nevada is home for Tesla it would only make sense to buy into a lithium mine a few miles away verses thousands of miles away. These Nevada based juniors still have a lot of upside in their value as far as I’m concerned but it’s a big world out there.
As I mentioned earlier, Tesla is only a fraction of the EV auto market. Where is China, Korea or some other Asian based EV manufacturer going to get it’s supply of lithium? Well the one place that stands out as first in line is Australia as it is at present the largest producer of lithium on the planet at this time. In 2019 the country produced 42,000 tonnes from hard-rock mining of spodumene – an ore that contains high levels of lithium, as well as aluminium.
The second largest producer is Chile. Chile accounted for for 18,000 tonnes of lithium production in 2019. Out of the three countries comprising the lithium triangle Chile, Bolivia and Argentina, Chile has has some of the world’s third-largest reserves of the metal, totalling around nine million tonnes and has made the most successful progress in developing its vast natural resource to commercial scale.
Now believe it or not but China is the worlds third largest producer of lithium and produces about 7,500 tonnes a year as far as data available from 2019. Coming in fourth place is Argentina which produces 6,400 tonnes of the metal in 2019, taking fourth place on the list of the world’s top producing countries. Argentina is home to the world’s second-largest known reserves’ with 17 million tonnes concentrated in vast salt flats in the north west of the country. It’s within this lithium triangle that a few junior companies are exploring and looking to develope in the near future. This area where Argentina, Chile and Bolivia all border is the area known as the Lithium Triangle which is host to some of the richest lithium brines in the world. Once developed and producing this lithium can easily be exported to Asian and other global markets as location to sea ports is just a short distance away.
One company working in Chile at present is Lithium Chile TSX-V:LITH This company has 71,900 hectares covering sections of 10 salars and two laguna complexes in Chile. It also has a gold, silver & copper property In Chile. At present the company is raising $3.5-million for drilling and sampling.
The second company is Alpha Lithium TSX-V:ALLI and is active in Argentina. Alpha holds a 100% ownership of +27,500 hectares (67,954 acres) of the Tolillar Salar. Early stage investigations have shown Lithium concentrations up to 504 mg/L in borehole samples. Alpha is an agressive company with active drilling. In a news release in October 2020 the company applied for drilling permitts. By the end of October the company had started drilling. Mid November they announced a significant brine discovery. Mid January the company announced a 10 million bought deal and later the same day increased it to 20 million. Following day the company decides to add a second drill rig to the program. This current drill program is an additional step towards the completion of a 43-101 resource estimate.
t present worldwide demand for lithium is over 350,000 tonnes. Conservative estimates for 2025 and based only on increased EV units worldwide would be over 1,000,000 tonnes. This is the equivailent shortfall of 650,000 tonnes which translates to 26 lithium mines worth of production. These figures are based on just a 14% increase in EV sales. So you can see now that lithium could very well become the new gold that miners will want to go out and explore for. Problem is there is a very limited amount at present.
If you enjoyed this article, please feel free to share. When seeking out mining stocks always use Due Diligence and see our Disclaimer and be sure to sign up for our free news letter located on the right hand side of this page.
Added note: The author of this article holds postions in all the above at the time of this writing. The author may buy or sell any time going forward.
2019 started off not to bad for the junior mining sector. A lot of the smaller players were looking poised to rally on optimism of higher gold prices. Sure enough gold prices did rally this year hitting the $1,500 USD range. In other currencies like here in Canada the price of gold hit historic highs. The juniors on the other hand have hit historic lows. Volumes of most have all but dried up and pretty near any shareholder who bought into any plays during the mid year with antisipation of a reward is out of luck and out of money.
So investors are wondering what’s the real cause of this stagnant money loosing market. To begin with I think there is just a lack of interest in the sector as a whole. Investors over the last couple years were chasing pot stocks to record levels like they did tech stocks 20 years ago. Now the pot stocks sector has fallen to lows never thought possible, a lot of those folks who bought and didn’t cash out have been all but been wiped out. I remember getting a news newsletter talking about Invictus MDGENE which was suppose to be a well managed pot company with top growth potential, etc. The stock at that time was $1.50 and some cents and went to around $2.50 at the time. Today I see that stock is 12 cents. This is just one example of the many pot companies that will probably end up going bust and taking millions of shareholders money with them. To put it plainly in english, there is not a lot of speculation money left out there.
Another factor I think that plays an important part in the junior sector is the lack of new discoveries. There hasn’t been anything new or exciting to get the crowds rallied up like years ago. Another factor along this line is investors aren’t satisfied with drill results like before. They don’t seem to be content with grams per ton any more. They all want ounces per ton it seems.
Commodity prices too in general are in the dumps. Most base metals are dismal at best. The hype and excitement around lithium and cobalt has seemed to dissappear. Talk of a global recession doesn’t help juniors either who are on the hunt for copper or zinc.
Another issue I see that is hurting the juniors is the lack of transperancy and lack of news with some of the companies. These issue a bunch of stock, take the money, drill a few holes, don’t bother promoting the stock in any way and after the stock sinks in price they roll back the stock, issue more new paper and its the old wash, rinse and repeat and investors are just plain sick and tired of being put through the wringer and are really looking hard for other places to park their money.
Now I’m not saying ALL juniors are that way but there are some out there that have little to offer and management likes to treat their stock and company like a personal ATM machine. This sad reality is that it just takes a couple of these companies to make a bad name for the entire sector. There are good quality plays still out there that are run by top notch people that have great potential once this market turns around.
Another problem with the juniors in my opinion is that there is just too many junior companies out there. There is just too many players fighting over too few dollars and so many of these juniors go into the field under capitalized and thus need to issue more stock to raise more money and then dilute the shareholder value some more repeating this same old cycle over and over again and the ordinary investors have had enough of it.
Market shorting of stock. No sooner does news come out and a stock rallies a bit and in move the short postions ready to hammer the life out of it. Is it any wonder that the average investor is starting to just throw in the towel on these stocks. It seems that market regulators turn a blind eye to this kind of behavior but in a lot of cases the management of these companies seem to do little to intervene and seem to allow brokerage firms and others to get away with it. I have yet to read of any CEO taking the regulators to task on this issue. Most just like to blame the market for their stocks poor performance.
Another problem the juniors face is the government and the multi levels of government. Things like getting permits and approvals in a timely fashion. Having to spend dollars and time with local governments and other stake holders like first nations and special interest groups. Small juniors dump thousands of dollars and tons of time just to get approvals to go out and explore. Because of this alone, a lot of potential investors will take their money else where. It’s the old “why bother” attitude that comes into play. There is a risk factor that comes into play even before a project starts.
So how is the best way to play the metals sectors? The large cap miners have done well this year and many are down from their highs. These larger miners especially the gold miners should do well especially if there is a global slowdown or recession as a lot are talking. Another way is to just buy the physical metal itself. You won’t see the multi bagger gains like you might with some juniors but in the end you’ll still have something tanglible to hold on to. As you see by the chart below in 2019 everyone who held gold has seen double digit returns in the past year. Not bad concidering you’ll get zero at the bank if your looking for security and don’t like risk. For the sake of curiousity, investing in the S&P 500 the average annualized total return for the over the past 90 years is 9.8 percent so you can see physical gold is a good hold.
So in the end, what’s going to fix this situation with junior mining companies? Firstly, and these are just my opions but someone needs to come up with a discovery that grabs the attention of the investing public. I’m talking another Voisy’s Bay, another Lac da Gras diamond find, another Galore Creek. Second, maybe a few mid cap players come in and buy out a few of these juniors who have proven goods. Third, more accountablity from management teams with more work project updates. Fourth, more timely lab returns on assay results so investors aren’t waiting months for these results.
These are just a few of the issues plaguing the junior sector these days. A person could go and on for days trying to figure out the best way to turn things around. I for one am hoping that the sector turns around. The world still needs resources and the only way it’s going to get these resources and keep an inventory of these resources is from junior miners who are active in exploration.
If you enjoyed this article, please feel free to share. When seeking out mining stocks always use Due Diligence and see our Disclaimer and be sure to sign up for our free news letter located on the right hand side of this page.
Is Lithium The Next Big Play?
We are going to look at lithium but first a bit of info about the Ritchie Bros. auction this week. The results are in for the two parcels of mining claims that we had advertised here that were to be sold by Ritchie Bros. Auctions. The two groupings of claims sold on April 27. The first grouping of claims which was 51 claims on 13 Mile Creek sold for $127,500 CAD. The second grouping of claims on the 60 Mile consisted of 53 claims and sold for $106,000 CAD.
One has to keep in mind that these claims were river access only meaning that all equipment would need to be either barged in or wait until winter when the ground is froze enough to get equipment in. What this does show though is that there are buyers who are interested in buying mining properties.
With gold seeming to rally this last little while there has been a renewed interest in mining claims. I am getting emails from various vendors thinking about getting out of mining or selling portions of their mining properties. Some who had expressed interest in selling have taken a “wait and see” attitude as they feel the gold price will continue to go up there by making their properties tha much more valueable.
Talking to various mining people along with marketing people, there is getting to be more money available for mining and exploration pprojects. In the public arena, private placements are finding investors and in some cases depending on the project, placements are getting over suscribed. This sure beats the ways things were even 6 months ago. Last year for instance was almost a no show for raising money and a lot of junior mining company types were ready to throw in the towel. That being said I am sure that there still is a lot of companies that are working marginal ground and have little investor awareness that probably wish they could call it quits.
In the last month or so there has been a rush for some of smaller companies to get into the lithium plays. It seems everyday there is some news release that says this company or that comapny has aquired ground in some area somewhere that is located close to where someone else has found some interesting ground with lithium. I get asked what I think about about and I am not sure what to say. First and foremost I know nothing about lithiumor than it goes into batteries. The public interest kind of reminds me of the NWT diamond rush about 25 years ago or the Voisy’s Bay rush 20 years ago. One company strikes it big and everyone rushes in hoping to find something big. I think it started with Lithium X and also Nemaska Lithium Inc.
Looking above at the two charts I don’t have tell you that being a gold bug can sometimes be detrimental to your potential winnings in mining stocks. Had I bought into one of these lithium plays I would be a lot better off money wise than holding gold stocks. The one problem I do have with these lithium plays is how long will they be in the spot light? It was only a couple of years ago when a lot of these junior miners were all bummed out and decided to get into the marijuana thing. There were several compnies putting out news that they were no longer involved in mining but were signing deals to get into pot. That scenario played well for maybe a few but aside from those select companies who were maybe first in the game, the rest never did anything. Other than getting the stock to pop for a few sessions, most investors ended up being bag holders of dead stock. If you were late to the party you know what I mean.
Today, April 28 2106 and gold is at a high for the year as is silver. Let hope this trend continues and never mind the summer doldrums. News any day in regards to New Carolin Gold and their 3D modeling followed by drilling. There will be lots of action this summer for that play for sure.
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Battery metals like lithium and cobalt as well as graphite and vanadium are vital to the lithium-ion batteries used to power electric autos, with need expected to increase in the coming years. As the green power revolution continues to unfold, car makers are becoming more concerned with the requirement to protect these raw materials in order to complete their ambitious electrification objectives.
Battery Metals
Everyone has hear about lithium and a lot of juniors jumped onto the lithium bandwagon last year. Just a quick look at their stock prices will tell you that that buying into the rage last year wasn’t such a great idea. Some of the Nevada juniors like Cypress Minerals TSX;V-CYP, Neo lithium TSX:V-NLC have held up OK but the rest it seems have lost a lot of value.
One of the lesser followed commodities in batteries is Vanadium. The past couple of years in battery developement have actually brought renewed rate of interest in vanadium. Experts anticipate that the battery metal, which is made use of mainly as an alloy in steel manufacturing, will certainly see an uptick in demand thanks to its enhanced use in the power storage space industry.
The meteoric rise of the silvery-gray steel has stimulated the passion of experts and capitalists who see the value in a battery metals steel that is safer, longer-lasting as well as a lot more durable than lithium.
There’s not a lot of vanadium miners out there to chose from. Most juniors will come across vanadium as a by product from another commodity they may be mining. However there are a few that focus on exploring for vanadium. One such company is Vanadium One TSX-V: VONE Vanadium One has the Mont Sorcier Iron ore property hosts a large high quality Iron resource with significant and extractable Vanadium. The Mont Sorcier Iron-Vanadium deposit is located just 18 km outside of Chibougamau
The deposit which is a higher grade iron ore deposit consists of a North and South deposit and with a low Titanium content, allowing for simple extraction of the Vanadium metal by a blast furnace. Mont Sorcier boasts an impressive 113.5 Mt Indicated and 520.6 Mt Inferred with the potential for battery metals expansion along strike, where the deposit’s magnetic anomaly continues, and at depth. Over 7,000 m of drilling at 32 holes by Vanadium One Iron in both the North and South Zone between July 2017 and December 2018 have revealed wide downhole iron ore intersections as long as 214 meters.
The company this year entered into a long-term arrangement with a wholly owned subsidiary of mining giant Glencore, to support the development of the Mont Sorcier Iron and Vanadium project. The parties have entered into a financing agreement and a separate concentrate offtake agreement to support the ongoing development and the eventual construction and production of the Mont Sorcier iron and vanadium project.
In early June the company announce they had raised 6.9 million dollars in May and had commenced a drill program at Mont Sorcier. This would be in fill drilling with a goal to upgrade sufficient inferred Mineral Resources to the Measured and Indicated Categories to support at least a 20-year mine life. This will be part of a feasibility study to begin later this year or early 2022.
A couple of other companies that are in the exploration and extraction of vanadium are Energy Fuels TSX: EFR and Largo Resources TSX: LGO. Energy Fuels is big in uranium. Energy Fuels is also a major U.S. producer of vanadium and an emerging player in the commercial rare earth business in the USA while Largo has a high grade vanadium deposit at the Maracas Menchen Mine located in Brazil.
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Disclosure: The author of this article does not own any shares in any of the above mentioned companies at the time of writing
Finally, A Rally In Metals
This past few weeks has seen a nice rally in gold and other precious metals. Unfortunately it takes a crisis or a war to get gold to become that safe haven it's known for. However this time around we see all commodities across the board on the rise. Metals, energy, agriculture, you name it, it's heading up and a lot of this is due to inflation and excess money printing. I heard some financial analyst say real true inflation could hit 25% by next year.
Palladium has hit record highs of $3000+ per oz and copper is setting new highs also. Nickel has gone through the roof. Gold is seeing new highs which will be great for the placer miners however with the price of oil way back over $100 per barrel I can guarantee there won't be many bargains on fuel this summer. Fuel is one of the biggest expenses for miners these days and if your mining in Canada there is those new carbon taxes added to that fuel bill.
With higher oil prices though and the governments agenda for going green, lithium stocks should do well. Be careful of any resource plays in Chile at this time however because of the new government that is looking at nationalizing copper mining operations. This type of nonsense can spill over to all types of mining. So if your looking into South American lithium plays, maybe best stick with Argentina or Peru at the moment or even look into some of the juniors who are exploring in Nevada.
Speaking going green, one of the most used metals in the green agenda is silver and for the life of me I can't figure out why it is still priced the way it is. There are tons of ideas and theories about comex manipulation and naked paper shorts out there. I did read an article however that mentioned there are big buyers of bulk silver like Apple or Samsung that can't afford to have the price of silver to rally and these companies do their part in the suppression along with trading houses and banks. I was reading that First Majestic Silver was only selling as much silver as was required to keep operations going and stock piling the rest. If more miners did this instead of worrying about quarterly profits, I believe silver would become the item of luxury. One day all this nonsense may unravel but until then I think silver will be sub $30 USD.
With gold prices hitting new highs money is slowly starting to move over the miners. Last month Barrick said they will start buying back one billion dollars US dollars worth of their own stock back. Looking at the chart below you can tell it was well received. By the way, Barrick pays a dividend.
Good news for the Yukon. Newmont Mining got the go ahead for it's Coffee project that it got from when it took over Goldcorp. Goldcorp bought out the Kaminak Coffee gold project a few years back. The project is located about 130 KM south of Dawson City Yukon. The project consists of four open-pit gold mines as well as one permanent waste rock storage facility. With a mine life of ten years, the project is expected to have a 30 month construction period, during which up to 700 people will be employed.
Also in the Yukon, Western Copper's Casino project has gotten the green light to start building access roads. The Casino project mine could very well end up being one of the largest copper projects in the world.
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World's First Carbon Negative Gold Royalty Platform
One of the biggest issues in the news these days besides covid is the environment and climate change. About a decade or so ago it was a global warming crisis which in turn changed to just climate change which led to words like CO2, Carbon emmisions, carbon neutral, carbon credits, the green new deal and the list goes on. So what does this all have to do with mining? Well firstly with what is happening at all these global climate summits is new legislation being brought forward and how it will effect industries around the world. Everyone sooner or later will have to kind of comply with these regulations in one way or another. Basically it's more legislation and taxes the way I see it. But it is what it is.
So what does all this have to do with junior mining companies? Well the one issue that stands out first and foremost is financing. Junior companies always need money for exploration and that money is usually harder to aquire due to the risk that exploration brings. A lot of these companies either go to public offerings for money or if able will get money from private placements. Private placement money is the better way to go as this money is from institutions or funds and a lot of funds tend to have a certain criteria for lending. This criteria could be things like the stock price has to be a certain price with X amount of earnings etc. etc. and what what is going to happen in the not to distant future will be companies looking to raise money will most likely have to have a green policy of some kind in place.
While looking for something along this line to invest in I came across a company that is involved in mining and has already gotten istself established in the green way via carbon credits. Star Royalties TSX-V:STRR is a precious metals and green royalty and streaming investment company. This company has created the world's first carbon negative gold royalty platform and offers investors gold exposure with an increasingly negative carbon footprint. For those not familiar with royalty or streams it goes like this. Royalties are tied to to a company's earnings or revenue where the royalty company gets a percentage of that revenue or earnings. Streams on the other hand are where the royalty company makes an initial payment, it is then given the right to purchase all or a predetermined amount or percentage of future metal production generated from a mining operation, at a predetermined below-market price.
So without getting into all the nitty gritty details about these royalties and streams, the company has percentages in several mining operations throughout the world. Here in Canada, Star Royalties has a 2% NSR Royalty, covering all 16,716 hectares of mining leases and mineral claims outlined in Gold Mountain. Elk Mountain is owned by Gold Mountain Mining TSX-V:GMTN. The Elk Mountain operation is in BC. The company has the Copperstone Gold stream in Arizona that slides from 9.9% down to 1.2% dependent on gold produced with Sabre Gold Mines Corp. TSX:SGLD.
In Australia, the company holds a 2% royalty on the Keysbrook Mine. This is an open pit operation that produces zircon and titanium. In Mongolia the company holds royalties from two companies that have yet to put mines in opertions. There is the Bayan Undur mine owned by Aranjin Resources which is a copper and silver deposit. The Baavhai Uul in Mongolia is a lithium brine project where Star Roylaties will receive 1.5% gross revenue. This prospect is one of Mongolia's largest exploration licenses being over 80,000 hectares.
When it comes ot carbon capture and carbon credits, the company has a 16% Gross Revenue Royalty on AurCrest Gold,s forest revenue share in Ontario and 13.5% gross revenue royalty on Elizabeth Metis Settlement's forest revenue which is in Alberta.
This kind of gives an overall look at Star Royalties. I'm a fan of royalty companies in general because of the limited risk in the junior mining space. In my mind I refer these to mini ETF's that if the price of commodities goes up the stocks in theory should do quite well. This stock being also getting involved in the green agenda should find itself in favour of a more wider audience of investors.
The company has 72 million shares and also has tradeable warrants.
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Added note: The author of this article holds postions in the above company at the time of this writing. The author may buy or sell any time going forward.
Lithium Buyouts On The Way
Lots of news lately in the lithium space these days. A lot has to do with of course batteries and especially batteries for electric cars and right now there is very limited supply of lithium out there. Yes there is exploration projects going on all over the world but for actual supply right now there is a huge deficit. Lots of the supply issues are caused by things like the pandemic but because lithium is a fairly new in demand commodity, there hasn't been a whole lot of exploration going on until the last decade or so.
The lithium supply is held by a handful of big miners like Lithium Americas TSX-LAC and Orocobre TSX-ORL along with Standard Lithium TSX-SLI and few others. The rest of lithium companies are mostly in the junior sector who are active in exploration and bringing new properties onstream. There are some Chinese companies also that are scattered all over the globe and last week it was one of these Chinese companies that did an all cash buy out. Zijin of China bought out all of Neo Lithium TSX-V:NLC shares in an all cash buyout of $6.50 a share. That price was a 35% premium on the stock price pushing Neo Lithium stock to an all time high.
Neo Lithium's 3Q brine property in Catamarca Argentina, is one of the largest and highest-grade projects of its kind in the world. The company had been working on this project since 2015. Neo Lithium quickly became a prominent name in lithium brine development with the 3Q project. Neo Lithium had a 100% ownership in this project located in the largest lithium-producing area in Argentina, covering approximately 35,000 hectares, including a salar complex of approximately 16,000 hectares. Latin America's Lithium Triangle.
Of course this buyout has raised a lot of interest in the lithium market. Not only the bigger miners will be watching which juniors have the most potential, but end users of lithium such as Tesla and many other battery makers. I did an article around the beginning of the year talking about investing in the lithium triangle in South America where I talked about some of the juniors with potential. Neo Lithium was of course one of those juniors. Other juniors at the time were Alpha Lithium TSX-V:ALLI and Lithium Chile TSX-V:LITH. Lithium Chile has 71,900 hectares covering sections of 10 salars and two laguna complexes in Chile. Alpha Lithium holds a 100% ownership of +27,500 hectares (67,954 acres) of the Tolillar Salar. Alpha is working towards a 43-101 resource.
American Lithium TSX-V:LI owns the TLC claystones lithium deposit, which is in close proximity to the Tesla giga-factory in Nevada. After buying out Plateau Energy Metals, the company is advancing the Falchani hard rock lithium deposit, as well as a uranium deposits known as Macusani which are both located in southeastern Peru.
Cypress Development TSX-V:CYP is developing its 100% owned Clayton Valley Lithium Project in Nevada, USA. Work completed by Cypress led to the discovery of a world class resource of lithium claystone right adjacent to the Albemarle Silver Peak mine, North America's only lithium brine operation.
Frontier Lithium TSX-V:FL is focused on the development of its 100% owned PAK Lithium Project in Ontario. The company is aiming to produce battery grade lithium hydroxide and other chemicals to the growing electric vehicle and energy storage markets.
The one great issue of lithium juniors is when it comes time to investing in any of them, is the fact that there are not a lot of them out there like gold mining stocks where every man and his dog has a junior gold company. A person can sift through the information fairly quick in order to make any kind of investment decision on what plays you think have the best potential, OR, which lithium junior will be the next buy out target.
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Investing In Storage Batteries
Battery metals like lithium and cobalt as well as graphite and vanadium are vital to the lithium-ion batteries used to power electric autos, with need expected to increase in the coming years. As the green power revolution continues to unfold, car makers are becoming more concerned with the requirement to protect these raw materials in order to complete their ambitious electrification objectives.
Everyone has hear about lithium and a lot of juniors jumped onto the lithium bandwagon last year. Just a quick look at their stock prices will tell you that that buying into the rage last year wasn't such a great idea. Some of the Nevada juniors like Cypress Minerals TSX;V-CYP, Neo lithium TSX:V-NLC have held up OK but the rest it seems have lost a lot of value.
One of the lesser followed commodities in batteries is Vanadium. The past couple of years in battery developement have actually brought renewed rate of interest in vanadium. Experts anticipate that the battery metal, which is made use of mainly as an alloy in steel manufacturing, will certainly see an uptick in demand thanks to its enhanced use in the power storage space industry.
The meteoric rise of the silvery-gray steel has stimulated the passion of experts and capitalists who see the value in a battery steel that is safer, longer-lasting as well as a lot more durable than lithium.
There's not a lot of vanadium miners out there to chose from. Most juniors will come across vanadium as a by product from another commodity they may be mining. However there are a few that focus on exploring for vanadium. One such company is Vanadium One TSX-V: VONE Vanadium One has the Mont Sorcier Iron ore property hosts a large high quality Iron resource with significant and extractable Vanadium. The Mont Sorcier Iron-Vanadium deposit is located just 18 km outside of Chibougamau, Quebec.
The deposit which is a higher grade iron ore deposit consists of a North and South deposit and with a low Titanium content, allowing for simple extraction of the Vanadium metal by a blast furnace. Mont Sorcier boasts an impressive 113.5 Mt Indicated and 520.6 Mt Inferred with the potential for expansion along strike, where the deposit's magnetic anomaly continues, and at depth. Over 7,000 m of drilling at 32 holes by Vanadium One Iron in both the North and South Zone between July 2017 and December 2018 have revealed wide downhole iron ore intersections as long as 214 meters.
The company this year entered into a long-term arrangement with a wholly owned subsidiary of mining giant Glencore, to support the development of the Mont Sorcier Iron and Vanadium project. The parties have entered into a financing agreement and a separate concentrate offtake agreement to support the ongoing development and the eventual construction and production of the Mont Sorcier iron and vanadium project.
In early June the company announce they had raised 6.9 million dollars in May and had commenced a drill program at Mont Sorcier. This would be in fill drilling with a goal to upgrade sufficient inferred Mineral Resources to the Measured and Indicated Categories to support at least a 20-year mine life. This will be part of a feasibility study to begin later this year or early 2022.
A couple of other companies that are in the exploration and extraction of vanadium are Energy Fuels TSX: EFR and Largo Resources TSX: LGO. Energy Fuels is big in uranium. Energy Fuels is also a major U.S. producer of vanadium and an emerging player in the commercial rare earth business in the USA while Largo has a high grade vanadium deposit at the Maracas Menchen Mine located in Brazil.
If you enjoyed this article, please feel free to share. When seeking out mining stocks always use Due Diligence and see our Disclaimer and be sure to sign up for our free news letter located on the right hand side of this page.
Disclosure: The author of this article does not own any shares in any of the above mentioned companies at the time of writing
A Junior With It's Focus On Copper
Metal prices both precious and base have been pretty dismal the past few years. Aside from palladium going to the moon price wise in the precious metal side, the only other metal that has had any shine is copper. This is mainly due to the fact that there could very well be a massive shortage of copper in years to come. This shortage is mainly derived from countries around the world that are going more green with both electric cars and electric transportation in general, and it is widely projected that global demand for refined copper will out pace production and the market will be in deficit over the next few years.
You see, getting off fossil fuels and going electric like so many places around the world want to do, takes a whack of other ingredients like lithium and cobalt but mostly copper, and when you look into the actual manufacturing of electric cars and their batteries and other components, you end up using a lot of copper. Todays cars use something like 55 pounds of copper whereas electric cars are projected to use about 165 pound of copper. So when you think that it takes something like a decade or even more to get an actual mine up and running, now is probably a good time to be out exploring for a nice size copper deposit. And that is what this junior we're going to look at is doing.
The junior I'm talking about today is a small explorer called Universal CopperUNV. They just started trading under the new symbol, UNV on the venture exchange in the last week. This company use to be Tasca Resources and Tasca had a couple of projects on the go in British Columbia. The company CEO is Clive Massey who brings extensive experience in running public companies and most importantly, junior mining companies.
Universal Copper has a 100% interest in the Princeton Property in southern BC. This is a gold project which is close to the property that Westhaven Resources is working on. For anyone who has been following Westhaven in the last while you know all to well what good gold grades can do for an investor.
Universal Copper also has the Poplar project in north west BC. This property has a historic 43-101 reoprts and is one of the most pre-production deposits in BC at this time. The property has seen historical diamond drilling totaling 39,648 meters in 147 holes plus and additional 135 diamond and percussion holes totaling 6,817 meters.
One of the reasons for the name change is that the company wants to be focused only on copper and in doing so the company just aquired some prime copper exploration property in Colombia South America. This property situated in an area called the Gachala copper belt which is an under explored 250km by 120km sedimentary belt that is located within the Colombia copper belt that is all part of the Andean copper belt and being sedimentary, it is similar to what you would find in the Democratic Republic Of Congo or DNC which is well known for it's rich copper deposits. The Gachala portion of the Andean copper belt is known to have over 300 mineral occurances alone.
Universal Copper has a 48 KM section of this Galchala copper belt to explore. Historical sampling had samples returning values from 1.6% to 7.82% Cu on ground
contiguous to the Universal Copper properties. The company plans to go forward with an exploration program that could include Long Wave Infrared Imaging along with mapping, sampling and trenching to define future drill targets.
The company also has plans for it's Poplar project in north west BC. This property has nine prospective target areas to follow up on that were identified after airborne magnetics along with drill results from earlier this year as you can view below.
This year could prove out to be an exciting year for Universal Copper with these two copper projects. The company has a very tight share structure of of only 25,972,271 shares O/S at this time. The stock over the past 52 weeks has seen a high of 26 cents and a low of 6 cents.
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Six Palladium Stocks To Keep On Watch
Since late summer of 2019, the price of palladium has rallied from the $1,500 area to almost $2,800. That's close to an 80% rally in about 6 months time. A few of the reasons for this price explosion is that most of the palladium in the world comes from Russia and South Africa. With trade sanctions on Russia imposed, industry ends up buying from South Africa but that country is seeing droughts and water shortages which in turn wreak havoc on the hydro situation and with power outages happening, the country ends up seeing a lot of it's mines being shuttered or working at partial capacities.
The second reason for the rally in palladium price of course is the extra global demand for the metal due to the increase in hybrid cars, which use this metal to control pollution. This is happening all at the same time governments are imposing tougher regulations on carbon emissions. So it's the classic increased demand plus decreased product which equals price explosion.
A third reason could also be the price of rhodium is getting to a point where an alternative needs to be found. I wrote an article back in September of 2019 about sky high rhodium prices when the price was $4,000 an oz. Today that price has reached $12,000 and ounce and palladium is keeping in line.
As far as investing in palladium goes, you can buy the metal itself from various bullion dealers like Kitco and so on. Aside from investing in the metal itself and paying the huge premiums though, there are a few mining comapnies that do explore and mine for palladium that you could look at investing in.
Palladium One Mining Inc. (TSXV:PDM) which was formerly known as Nickle One, has properties in Canada and Finland. It holds interests in the Lantinen Koillismaa project in north-central Finland and in August 2019 the company acquired the Tyko property located in Ontario, Canada.
New Age Metals Inc. (TSXV:NAM) New Age has interests in the River Valley PGE project located in Ontario and the Genesis PGE/polymetallic project located in south central Alaska. The company also has interests in lithium properties.
Grid Metals Corp. (TSXV:GRDM) has interests in the East Bull Lake, a platinum group metals-nickel-copper exploration project, as well as Bannockburn nickel property located in the Sudbury Mining Division, Ontario. The company also has the he Makwa Mayville Project located in the Bird River Greenstone Belt approximately 145 km from Winnipeg Manitoba. The project consists of two open pit NI 43-101 resources containing nickel copper platinum group metals and cobalt mineralization.
Group Ten Metals Inc. (TSXV:PGE) has the STILLWATER WEST PROJECT where it owns a 100% interest on a large 54 km2 claim block that adjoins the producing J-M Reef PGE deposit. This is the area where still Stillwater Mining is located and this area has some of the highest-grade major PGE deposit in the world and the largest outside of South Africa and Russia. The company also owns the Kluane Project in the Burwash Yukon area. This project has one of the largest undeveloped PGE-Ni-Cu projects in North America at 6 Moz of Pt+Pd+Au and 3 Blbs of Ni+Cu in M&I resources and an additional 2 Moz of Pt+Pd+Au and 1 Blbs of Ni+Cu in Inferred resources.
Platinum Group Metals Ltd. (TSX:PTM) has operations in South Africa and is focused on the production at the Maseve Mine, and the exploration and the Waterberg platinum deposit. The Waterberg Project is a bulk underground deposit in northern South Africa. The deposit was discovered by the Company and has the potential to be a low-cost producer of palladium, platinum, rhodium and gold.
Generation Mining (TSXV:GENM) Generation Mining owns a 51% interest (with an option to earn up to an 80% interest) in the Marathon PGM deposit located near Marathon, Ontario.
So the big question is will palladium continue to go up in price like rhodium for instance? Rhodium today sits between $10 - 12,000 per ounce. Some market watchers say yes. There are market forcasters who see $5,000 before 2025 and there are probably commodity traders who are also calculating the future price also now that issues like the Coronavirus is starting to put hickups in supply chains. Palladium could become a lot more expensive unless a junior mining company can somehow find and develope a deposit to fill that supply gap. But with 10 year construction build times on any mine today, most see the price continue to go up.
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Is Lithium The Next Big Play?
Well the results are in for the two parcels of mining claims that we had advertised here that were to be sold by Ritchie Bros. Auctions. The two groupings of claims sold on April 27. The first grouping of claims which was 51 claims on 13 Mile Creek sold for $127,500 CAD. The second grouping of claims on th 60 Mile consisted of 53 claims and sold for $106,000 CAD.
One has to keep in mind that these claims were river access only meaning that all equipment would need to be either barged in or wait until winter when the ground is froze enough to get equipment in. What this does show though is that there are buyers who are interested in buying mining properties.
With gold seeming to rally this last little while there has been a renewed interest in mining claims. Talking to various mining people along with marketing people, there is getting to be more money available for mining pproject. In the public arena, private placements are finding investors and in some cases depending on the project placements are geting over filled. This sure beats the ways things were even 6 months ago. Last year for instance was almost a no show for raising money and a lot of junior mining company types were ready to throw in the towel. That being said I am sure that there still is a lot of companies that are working marginal ground and have little investor awareness that probably wish they could call it quits.
In the last month or so there has been a rush for some of smaller companies to get into the lithium plays. It seems everyday there is some news release that says this company or that comapny has aquired ground in some area somewhere that is located close to where someone else has found some interesting ground with lithium. I get asked what I think about about and I am not sure what to say. First and foremost I know nothing about lithiumor than it goes into batteries. The public interest kind of reminds me of the NWT diamond rush about 25 years ago or the Voisy's Bay rush 20 years ago. One company strikes it big and everyone rushes in hoping to find something big. I think it started with Lithium X and also
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The Rise Of Nickel
Most of us gold and metal buffs tend to follow the precious metal scene and aside from taking a glance a copper once in a while we seem to ignore what's going on with the base metals. For the past year a lot of analysts have been following cobalt and lithium but at the same time nickel has almost doubled and very few had even noticed. If you have a junior mining stock that has exposure to nickel you may have seen a bit of a bounce or slight increase but all in all the gains in nickel have not reflected it's self in the stocks. Some of the stocks that have seen price gain of course is Alcoa and Excelsior Mining.
Two stocks that have a nickel exposure that I follow are Royal Nickel TSX:V-RNX and of course good old Sherritt TSX-S. Royal Nickels principal assets are the producing Beta Hunt gold and nickel mine in Western Australia, a 50% stake in the nickel joint venture that holds the Dumont Nickel Project in the Abitibi region of Quebec, anda 30% stake in the producing Reed Mine in the Flin Flon-Snow Lake region of Manitoba, Canada.
Another explorer that is focused on nickel is North American Nickel TSX-V: NAN. North American Nickels main project is the Maniitsoq property in Greenland and the Post Creek and Halcyon projects in Ontario.
So why is nickel taking of in price while precious metals are sitting dormant? One of the larger reasons is of course USA and Russia embargoes and sanctions. Norlisk which is the Russia's largest nickel miner is also one of the worlds largest nickel producers and when sanctions went into effect that of course has an effect on availability of the product.
Also last year Indonesia put an export ban on nickel that was produced in the country and added to extra pressure on the supply side. Indonesia wanted to see more nickel being refined and smelted in it's own country instead of being shipped out to other countries.
Last but not least, the new electric cars not only use lithium and cobalt but there is also a lot of nickel that is used in these automobiles. Nickel sulfide deposits are used to make nickel metal as well as nickel sulfate. The latter salt, nickel sulfate, is what's used primarily for electroplating and lithium-ion cathode material, and less than 10% of nickel supply is in sulfate form. As more and more cars become electric there will be more of a demand for nickel especially the nickel sulfate and less than 10% of this nickel is in sulfate form and even less is suitable for batteries.
The way the gold and silver market is going, maybe it's time to look at nickel as a wealth creator.
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Lithium. The New Gold Rush.
After seeing the performance of most mining stocks lately one can understand why a lot of long term investors have been throwing in the towel and taking their money elsewhere. I wrote in the past article here that a lot of old gold bug money held in family trusts was being taken out and going into the digital space of crypto currencies like bitcoin. One only has to look at data and charts like the one posted below that money for metal mining has been falling steadily. Some would argue that news mines are not needed like before because of new technologies in recycling of these metals. Those people who argue the recycling gig are only partially true because as the world continues to grow and expand, so do the materials needed for the infastructure.
Now if there is one place in mining that money will go, I believe that will be in the exploration and extraction of lithium. Whether it be clays, brines or hard rock, I believe that for those who position themselves now with good quality lithium miners and explorers will see their investments outperform any of the other types of resources whether it be exploration or extraction. Like it or not the green revolution that the greenies always wanted is coming and there are opportunities for juniors and investors to profit from it.
(Note: This is by NO means investment advise. I've been known to be wrong many times before and I will be the first to admit it.)
But my reasoning for this belief is in the numbers. Under the new Biden administration as well as governments around the world, the push towards electric cars is now in high gear. All auto companies are racing ahead to compete with each other in the EV space. While everyone in the western world though seems to focus on Tesla and it's giga factories in Nevada, China is building more cars than most of the entire world combined. According to the International Energy Agency in 2019 there were already 2.58 million battery electric vehicles in China, compared to just 0.97 million in Europe, and 0.88 million in the USA. Each of these cars needs a battery of some kind and the most popular batteries need a particular element and the element is lithium.
Now I am not saying to not invest in any of the lithium juniors that are working in places like Nevada. I myself have bought and sold some of those juniors and they have performed extremely well. Juniors like Neo Lithium TSX-V:NCL have seen their stock price up almost 800% this year. America Lithium TSX-V:LI has seen it's stock rise over 1000%. All of this is due to the fact that Tesla is looking to buy into a lithium deposit close to home and being that Nevada is home for Tesla it would only make sense to buy into a lithium mine a few miles away verses thousands of miles away. These Nevada based juniors still have a lot of upside in their value as far as I'm concerned but it's a big world out there.
As I mentioned earlier, Tesla is only a fraction of the EV auto market. Where is China, Korea or some other Asian based EV manufacturer going to get it's supply of lithium? Well the one place that stands out as first in line is Australia as it is at present the largest producer of lithium on the planet at this time. In 2019 the country produced 42,000 tonnes from hard-rock mining of spodumene - an ore that contains high levels of lithium, as well as aluminium.
The second largest producer is Chile. Chile accounted for for 18,000 tonnes of lithium production in 2019. Out of the three countries comprising the lithium triangle Chile, Bolivia and Argentina, Chile has has some of the world's third-largest reserves of the metal, totalling around nine million tonnes and has made the most successful progress in developing its vast natural resource to commercial scale.
Now believe it or not but China is the worlds third largest producer of lithium and produces about 7,500 tonnes a year as far as data available from 2019. Coming in fourth place is Argentina which produces 6,400 tonnes of the metal in 2019, taking fourth place on the list of the world's top producing countries. Argentina is home to the world's second-largest known reserves' with 17 million tonnes concentrated in vast salt flats in the north west of the country. It's within this lithium triangle that a few junior companies are exploring and looking to develope in the near future. This area where Argentina, Chile and Bolivia all border is the area known as the Lithium Triangle which is host to some of the richest lithium brines in the world. Once developed and producing this lithium can easily be exported to Asian and other global markets as location to sea ports is just a short distance away.
One company working in Chile at present is Lithium Chile TSX-V:LITH This company has 71,900 hectares covering sections of 10 salars and two laguna complexes in Chile. It also has a gold, silver & copper property In Chile. At present the company is raising $3.5-million for drilling and sampling.
The second company is Alpha Lithium TSX-V:ALLI and is active in Argentina. Alpha holds a 100% ownership of +27,500 hectares (67,954 acres) of the Tolillar Salar. Early stage investigations have shown Lithium concentrations up to 504 mg/L in borehole samples. Alpha is an agressive company with active drilling. In a news release in October 2020 the company applied for drilling permitts. By the end of October the company had started drilling. Mid November they announced a significant brine discovery. Mid January the company announced a 10 million bought deal and later the same day increased it to 20 million. Following day the company decides to add a second drill rig to the program. This current drill program is an additional step towards the completion of a 43-101 resource estimate.
At present worldwide demand for lithium is over 350,000 tonnes. Conservative estimates for 2025 and based only on increased EV units worldwide would be over 1,000,000 tonnes. This is the equivailent shortfall of 650,000 tonnes which translates to 26 lithium mines worth of production. These figures are based on just a 14% increase in EV sales. So you can see now that lithium could very well become the new gold that miners will want to go out and explore for. Problem is there is a very limited amount at present.
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Added note: The author of this article holds postions in all the above at the time of this writing. The author may buy or sell any time going forward.
Is Lithium The Next Big Play?
We are going to look at lithium but first a bit of info about the Ritchie Bros. auction this week. The results are in for the two parcels of mining claims that we had advertised here that were to be sold by Ritchie Bros. Auctions. The two groupings of claims sold on April 27. The first grouping of claims which was 51 claims on 13 Mile Creek sold for $127,500 CAD. The second grouping of claims on the 60 Mile consisted of 53 claims and sold for $106,000 CAD.
One has to keep in mind that these claims were river access only meaning that all equipment would need to be either barged in or wait until winter when the ground is froze enough to get equipment in. What this does show though is that there are buyers who are interested in buying mining properties.
With gold seeming to rally this last little while there has been a renewed interest in mining claims. I am getting emails from various vendors thinking about getting out of mining or selling portions of their mining properties. Some who had expressed interest in selling have taken a "wait and see" attitude as they feel the gold price will continue to go up there by making their properties tha much more valueable.
Talking to various mining people along with marketing people, there is getting to be more money available for mining and exploration pprojects. In the public arena, private placements are finding investors and in some cases depending on the project, placements are getting over suscribed. This sure beats the ways things were even 6 months ago. Last year for instance was almost a no show for raising money and a lot of junior mining company types were ready to throw in the towel. That being said I am sure that there still is a lot of companies that are working marginal ground and have little investor awareness that probably wish they could call it quits.
In the last month or so there has been a rush for some of smaller companies to get into the lithium plays. It seems everyday there is some news release that says this company or that comapny has aquired ground in some area somewhere that is located close to where someone else has found some interesting ground with lithium. I get asked what I think about about and I am not sure what to say. First and foremost I know nothing about lithiumor than it goes into batteries. The public interest kind of reminds me of the NWT diamond rush about 25 years ago or the Voisy's Bay rush 20 years ago. One company strikes it big and everyone rushes in hoping to find something big. I think it started with Lithium X and also Nemaska Lithium Inc.
Looking above at the two charts I don't have tell you that being a gold bug can sometimes be detrimental to your potential winnings in mining stocks. Had I bought into one of these lithium plays I would be a lot better off money wise than holding gold stocks. The one problem I do have with these lithium plays is how long will they be in the spot light? It was only a couple of years ago when a lot of these junior miners were all bummed out and decided to get into the marijuana thing. There were several compnies putting out news that they were no longer involved in mining but were signing deals to get into pot. That scenario played well for maybe a few but aside from those select companies who were maybe first in the game, the rest never did anything. Other than getting the stock to pop for a few sessions, most investors ended up being bag holders of dead stock. If you were late to the party you know what I mean.
Today, April 28 2106 and gold is at a high for the year as is silver. Let hope this trend continues and never mind the summer doldrums. News any day in regards to New Carolin Gold and their 3D modeling followed by drilling. There will be lots of action this summer for that play for sure.
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A Look At Lithium Stocks
Lithium. Known as the new oil. The next generation of power. The price of lithium has shot up over 100% just this year alone. For explorers it's created a new type of gold rush trying to find a mineable deposit. But what is lithium and where does it really come from?
Lithium is one of the lightest of all the metal elements known to man and it's being explored for the world over. Sith new lithium Ion battery technology some people say lithium will power the world and when it comes to things like laptops, tablets and other digital gadgets it definately is powering the world. Lithium compounds, also known as lithium salts, are primarily used as a psychiatric medication. This includes the treatment of major depressive disorder that does not improve following the use of other antidepressants, and bipolar disorder.
Lithium is a chemical element with symbol Li and atomic number 3. It is a soft, silvery-white alkali metal. Under standard conditions, it is the lightest metal and the lightest solid element. Like all alkali metals, lithium is highly reactive and flammable, and is stored in mineral oil. When cut open, it exhibits a metallic luster, but moist air corrodes it quickly to a dull silvery gray, then black tarnish. It never occurs freely in nature, but only in (usually ionic) compounds, such as pegmatitic minerals which were once the main source of lithium. Due to its solubility as an ion, it is present in ocean water and is commonly obtained from brines. Lithium metal is isolated electrolytically from a mixture of lithium chloride and potassium chloride.
When it comes to mining or extraction of lithium the most efficient methods of course is extraction from lithium brines or salts. Lithium is found in all parts of the world and is found in hard rocks in Australia, clays and muds in Nevada but nowhere in the world is this more abundant and productive than in the so called lithium triangle of South America. Known as the great Salar the Slar flats in Boliva cover over 100,000 square KM. Thats an area that is larger than a lot of European countries.
For a long time, most of the world's lithium was produced by three producers often referred to as the Big 3. Before being acquired by Albemarle (NYSE:ALB), Rockwood Lithium, part of Rockwood Holdings, was on that list. The other members of the club were Chile's Sociedad Quimica y Minera de Chile (NYSE:SQM) and FMC (NYSE:FMC), which operates in Argentina. Today however there are dozen of junior mining companies that are on the hunt for lithium deposits but there are very few that are actually extracting lithium at this present time. Most of the lithium that is produced at present comes from the companies that are in the lithium triangle right now.
Some of the other companies in the triangle today that are both exploring and producing lithium are Lithium AmericasLAC and OrocobreORL. Lithium Americas through a Joint Venture with Sociedad Quimica y Minera de Chile SQM, is developing the Cauchari-Olaroz brine deposit in Jujuy in Argentina. Through its wholly-owned subsidiary, Lithium Nevada Corp. the company is developing one of North Americas largest lithium deposits in northern Nevada. Lithium Americas just finished a 5:1 roll back on stock and has applied for an NYSE listing.
Orocobre is in partnership with Toyota and is now operating the world's first commercial, brine-based lithium operation in Argentina. The Company also owns Borax Argentina S.A, a well-established boron chemical and mineral producer with extensive operations and a 50-year production history.
A few other noteable lithium explorers are Lithium XLIX, Neo LithiumNLC and Nemaska LithiumNMX.
Lithium X holds two projects in in the prolific lithium triangle as well as participating in the Clayton Valley in Nevada through its ownership interest in Pure Energy Minerals.
Nemaska is a bit different as they are developing lithium hard rock deposits in Quebec instead of brines like the others. The concentrate produced at Nemaska Lithium's Whabouchi mine will be shipped to the company's lithium compounds processing plant to be built in Shawinigan, Que. This plant will transform spodumene concentrate into high purity lithium hydroxide and lithium carbonate.
Neo Lithium has the 3Q Project is located in Catamarca Province, Argentina. The 3Q Project has one of the highest-grade lithium brine projects in the world, with a large salar and lithium brine lake covering more than 150 square KM and controls more 350 square KM in and around the complex. The 3Q Project is 100% owned by Neo Lithium.
In Australia, Macarthur MineralsMMS is focused on identifying high-grade gold and lithium. Macarthur Minerals has significant gold, lithium and iron ore exploration interests in Australia and Nevada along with two iron ore projects in Western Australia.
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