How Investors Can Play The Coming Lithium Shortage To Their Advantage
James Burgess
September 7, 2016
Comment
From the age of gold to the age of coal, and then oil, we are now entering the age of lithium--and, more importantly, we’re at the crucial junction where this increasingly precious metal lives up to its newest moniker of “the white gasoline”. Prices have tripled, supply is already tight, and demand is poised to make new barons out of today’s lithium explorers.
More to the point, this is the moment when investment turns into profit; the moment when everyone stops hedging solid bets on lithium, and it all becomes a very profitable reality.
The supercharged electric vehicle industry may be in a bit of a panic over readily available lithium supply, but the problem isn’t supply itself--lithium is quite abundant. The problem is finding and developing new supply to keep pace with voracious new demand.
It’s also about looking beyond the obvious and casting a wider exploration net. The land rush is already on in full force in the Clayton Valley in Nevada—ground zero for the American lithium boom. Nevada’s geology tells a much more lucrative story, and so far we’ve only got the introduction.
Junior pure-play miners like Nevada Energy Metals (OTCQB:SSMLF)are starting to look beyond the obvious in Nevada--casting the exploration net much wider while at the same time securing production in Clayton Valley, the heart of the lithium land rush. The new game-changing strategy is to focus on diverse acquisitions of high-quality lithium acreage, turning this pure-play miner into a major project generator.
Cornering first new production and simultaneously capturing second phase new production from completely unexplored and untapped Nevada terrain is the key to cashing in on the lithium boom in both the near-term and long-term.
And if you don’t see how this is playing out, just look at the EV segment. It’s already going mainstream, even UBER has jumped on board. There is no turning back.
Tesla has stormed the mainstream U.S. market with its newest model; EVs have already entered the profit stage in Norway, and will soon be followed by the Netherlands, helped out by some EV-market-loving laws that demand that every single car in the country be electric by 2025. In Asia, too, EVs are bursting the traditional car bubble.
And with a mind-boggling 12 battery gigafactories on the books globally, we’re looking at a supply and demand equation that is overwhelming in favor of the new lithium miner.
This market will wait for no one, and that’s why we like Nevada Energy Metals’ exploration and production strategy and ambition.
Here are 10 reasons to keep a close eye on Nevada Energy Metals (OTCQB:SSMLF): 1.The Floodgates Have Opened, Prices Have Tripled.
Spiking from $7,000 per ton to over $20,000 per ton, the floodgates were suddenly opened for a new game on a new playing field, with a commodity that isn’t even traded like a commodity—yet. This revolution knows no bounds, and the next thing that will happen will be the end of the lithium oligopoly and the dawn of the new entrant. New lithium projects on highly prospetive land are the new rage. What investors are craving at the tipping point in this lithium boom is a lower market cap combined with strong management and solid near-term and long-term strategy. 2. Supply Tighter than Anything We’ve Ever Seen.
The surge this year in spot prices in China, the ravaging hunger for lithium batteries and power storage solutions has triggered fears that we are on the edge of a major supply problem—but it’s a euphoric problem for lithium exploration companies and it has opened up the playing field to new entrants. 3. Not just Acquisitions. This is a project generator
At prime time in a land rush, there’s nothing we like to see more than a company that is ambitiously scooping up the most diverse portfolio of lithium exploration land in the heart of the American lithium boom. Nevada Energy Metals is focused on the acquisition of high-quality acreage. The company is positioning itself as a project generator, strategically staking high potential land while negotiating joint-ventures to cover exploration costs while still maintaining the ability to cherry pick the project they want to develop 100% in-house. This model has earned the company US$ 400,000 in cash (the number reflects payments that have been received as well as future payments that are part of the current agreements), plus cash equivalents with unlimited growth potential.
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