While weak markets create opportunities, strong markets expose them. And one micro-cap battery metals exploration company is checking all the boxes for how an under-the-radar company in a red-hot sector could be the vehicle to drive potentially exponential returns in the next few quarters. Its name- Surge Battery Metals, Inc. (OTC: NILIF), a well-capitalized, multi-country lithium and metals exploration company advancing projects in several of the world's most mining-friendly jurisdictions. And with battery metals, lithium, and other essential elements needed to power an exploding EV sector, NILIF is doing the right things in the right markets at the right time.
Even the Wall Street Journal supports that premise, recently reporting that lithium demand alone increased by more than 240% in the back half of last year. They aren't the only ones. A report by PBS.org in March indicated that the race is on to produce more lithium in the United States, highlighting the importance of lithium to achieving clean energy goals. But that's not all they said. They added that the industry that mines, extracts, and processes the chemical element is poised to grow. And that puts NILIF in the sweet spot of opportunity.
Here's the better news- demand for lithium and battery metals isn't slowing. In fact, demand is at a fever pitch, which is sending prices for these essentials to record-setting levels. And for Surge Battery Metals and its investors, that is excellent news.
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Targeting A Massive Market
Still, targeting the massive EV metals revenue-generating opportunity needs a supporting infrastructure. Surge Battery Metals has one. They are currently operating five promising mines across two of the world's most mining-friendly jurisdictions. Not only that, NILIF is fully funded to accelerate its 2022 exploration plan, with roughly $3.8 Million in working capital reported in its most recent financials.
Better still, that capital isn't being put to work in an untapped territory. NILIF's closest mining neighbors include significant companies with highly successful late-stage exploration programs. And that's true for all its interests, which mitigates risk across a considerable portfolio of claims across Canada and Nevada's most proven mineral-producing regions. That diversification puts multiple revenue-generating shots on goals and separates NILIF from the handful of competitors that may present a one-and-done proposition.
Moreover, once they bring these assets above ground, they won't face any shortage of demand. Bloomberg recently said that the lithium market alone has reached "Ludicrous Mode," citing the imbalance between supply and demand that may take a long time to reconcile.
An Imbalance Between Supply And Demand
And that imbalance could pay an appreciable reward to suppliers. That's because, with limited supply and the absolute need for lithium to create rechargeable lithium-ion batteries, clients are buying available production as fast as they can. Not only in the EV sector, either. Lithium is a vital element in reducing climate-changing carbon emissions created by cars, other forms of transportation, consumer products, and military defense weaponry. While the disconnect is significant now, the gap is expected to widen.
In 2020, the worldwide demand for lithium was about 350,000 tons (317,517 metric tons). While substantial, it's a drop in the bucket to the estimates that industry demand will drive the need for lithium higher six-fold by 2030. Although potential lithium mining and extracting projects are in various stages of development in states including Maine, North Carolina, and California, Nevada is already digging. The excellent news for NILIF investors is that Nevada is where its lithium operations reside.
And to those thinking competition is months away, think again. It can take years to complete the proper permits, surveys, essays, and environmental impact studies. Thus, while states other than Nevada may be eventual contributors to the need for lithium, the competitive landscape is likely to stay thin until the end of the decade. Again, that's excellent news for Surge Battery Metals and its investors.
Best of all, NILIF has an expert team that can take advantage of its competitive position and turn ambition into dollars.
A Management Team To Accelerate Growth
Managing its promising asset portfolio is a team of experts, including Greg Reimer, former VP of Canada's massive BP Hydro, and Strategic Advisor Chip Richardson, a lifelong banker with experience working with everyone from UBS to Morgan Stanley.
That expertise is supported by a debt-free balance sheet and roughly $3.8 million in liquid capital, more than enough to fully fund their planned exploration for 2022. Better yet, the team has secured an additional cash runway to accelerate exploration into 2023 with warrant options that could increase working capital by $8 million if needed.
Thus, it's no surprise that NILIF has been described as a blue-chip value at penny-stock prices. And that presumption isn't an overly enthusiastic evaluation. NILIF has the team, the capital, the assets, and the know-how to transform itself from an exploration company into a revenue-generating juggernaut. That can happen sooner than later. Why?
Because the world is changing, and despite the political rhetoric, "green energy" sources are being ushered in at a pace that should keep essential metals and elements pricing at a premium. And remember, proven assets underground can be as valuable as those on the markets, and the market caps of gold miners demonstrate that case.
But, while gold is a precious asset with different stores of value and needs, and one that NILIF could be privy to, this decade's real play is to get in front of the battery metals demand.
More Than Just An EV Metals Play...But
Remember, NILIF clients will be more than just EV manufacturers; its "green metals" will be vital in producing battery power for everything from power tools to hypersonic missiles. And that need won't slow anytime soon. Lithium, Copper, and Nickel are critical to battery construction, so while demand from the major automakers alone is eating up supply, other sectors relying on lithium-ion battery power will only add to the supply/demand disconnect.
Still, staying focused on demand from the EV sector alone is a winning proposition for NILIF. On its own, Tesla ($TSLA) expects to produce at least 20 million EVs by 2035. But they are just a single contributor. At least 20 other automakers plan to launch a record 100 different pure battery-powered vehicles by 2024. And remember, the U.S. government has mandated 100% zero-emission vehicles by 2035, which makes the bullish proposition stronger.
Not only that, the mandate provides market vision, knowing that the transition to electric vehicles isn't a matter of "if," it's a matter of "when." Of course, that answer is provided. And even if politics change the timing, it won't change the result. The transition to EV is real, is happening now, and is gaining momentum. As a result, expect prices for the metals needed to power these products to rise beyond already record-setting levels.
So, is Surge Battery Metals positioned to benefit? In a word, absolutely.
Maximizing Prospects Near Proven Grounds
And as one of the few metal exploration companies on the TSX and OTC with resources in lithium, nickel, and copper, that can happen sooner than later. That's a likely result of NILIF's portfolio, including five primary metals and minerals producing locations across two jurisdictions, British Columbia in Canada and Nevada in the United States. But more than promising locations to deliver near and long-term value, its properties are also located among the most mining-friendly jurisdictions in the world, making it easier to attract best-in-industry talent to accelerate going from explorer to producer.
That should help Surge Battery Metals' nickel projects in British Columbia monetize their opportunities. That portfolio includes six mineral claims in the Mount Sidney Williams area covering 1863 hectares (roughly a 2.47-acre measure each) immediately south of and adjacent to the Decar Project and its Mitchell Range area covering 8659 hectares, located in Northern British Columbia. That's not all they have.
Surge's Caledonia Project includes 100% interest in 7 mineral claims, including the Caledonia, Cascade, and Bluebell claims. These properties are 4.3 miles northwest of the Island Copper Mine, which was once Canada's third-largest copper producer. Notably, the Caledonia project lies within a 31-mile copper belt that runs Northwest of Island Mine, again putting NILIF near proven reserves.
Those assets can be substantial value drivers. An even better one could be from its Nevada interests.
Nevada Project In-Play
Many consider its holdings in Nevada to be the near-term value driver. Indeed, its potential alone dwarfs the current share price. Assets include a significant landholding in Clayton Valley, the United States' only producing lithium jurisdiction. They are also working to maximize investments at two more Nevada locations, one in the San Emidio Desert and the other in Northern Nevada. Both can be game-changers for the company.
The Northern Nevada location includes 95 different claims across 778 hectares, with stream sediment samples as high as 1980ppm Li. Promising results from the company's initial assessment were released on 12/31/21, with analysis showing the project coincides ideally with Albemarle's recent announcement that they'd begin tapping into lithium clay resources.
West from there, and only a few miles from Tesla's new Gigafactory, is NILIF's San Emidio Desert project. Again, proximity matters, and this area has a proven history as a home to high, documented lithium concentrations. The excellent news for investors liking to trade ahead of potential catalysts is that Phase 1 exploration is expected to be completed by this summer's end. Following that announcement, a second catalyst could materialize, with Phase 2 of the project moving into drilling exploratory holes, expected to happen by the end of 2022.
Consider this, too. A potentially massive option agreement with Lithium Corporation (OTCQB: LTUM) could expedite the creation of substantial shareholder value. In fact, this agreement alone could be the potential catalyst that propels Surge Battery from a micro-cap exploration company into one of the industry's most reliable suppliers of battery metals and elements. Moreover, the terms are attractive and allow NILIF to expand its business footprint and retain the lion's share of its excess $3.8 million in working capital. Updates from that deal could fuel a rally as well.
Thus, despite being a micro-cap miner, there's a lot in play over the next eight months. Being sooner to the investment consideration may therefore be a wise consideration.
A Timely Consideration In A Booming Sector
A timely one as well. Remember that NILIF is also on pace to reach several milestones, which could turn into 2022 catalysts. Not only that, NILIF won't face market demand uncertainty; there are plenty of clients lined up to gobble up the production the industry provides. And better still, the unprecedented demand for next-generation batteries isn't a short-term phenomenon; it's here to stay.
Hence, finding opportunities in undervalued, under-the-radar battery materials companies could be akin to finding early-stage oil producers 100 years ago. That market turned many investors into billionaires. The same will likely happen for those taking advantage of a generational investment opportunity aided by a legislative tailwind rewarding companies that mine these vital assets. Thus, one way to look at the Surge Battery Metals investment proposition is that they are in the middle of a perfect storm of opportunity.
And with Surge Battery Metals being an ESG (Environmental, Social, and Corporate Governance)-mandated company, they could seize upon opportunities faster than even the large-cap miners in the space. That designation could also potentially triple the revenue-generating opportunities compared to those without the ESG status. Thus, though Surge may be a micro-cap exploration company in size, its revenue-generating potential based on the sum of its parts makes them too good to ignore. Hence, don't.
Could Surge Battery Metals stock produce the next Getty-type fortune? Possibly. Remember, until the Getty family purchased 1100-acres in Oklahoma, they weren't that powerful. Investment and foresight made the difference- and it will undoubtedly happen again.
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