The electric vehicle (EV) revolution is gaining serious momentum.
According to experts’ projections, demand for electric vehicles should rise at a 21.1% Compound Annual Growth Rate (CAGR) until 2026.
The extraordinary demand that is forecast for EVs over the next five years has now begun to trigger a massive disruption in the global energy markets.
As demand for EVs continues to move higher, the demand for lithium – the critical component needed for the batteries that power all those EVs – is also projected to climb higher.
According to Roskill Information Services, “lithium chemical demand from end-use sectors is expected to increase year-on-year to around 280,000 tonnes lithium carbonate equivalent.”
These projections have already begun to have a profound impact on the price of lithium in the marketplace.
Lithium prices declined from 2018 through the end of 2020, but since December 1, 2020 the price of lithium has soared 71.24% -- and could be poised to climb even higher.
With rising lithium prices and soaring projected demand, what are some of the best ways for investors to play this EV-powered trend for maximum upside potential?
With rising lithium prices and soaring projected demand, what is the best high risk/reward way for investors to play this EV-powered trend for maximum upside potential?
One under-the-radar company, United Lithium Corp., appears that it could be at the right place at the right time.
Its flagship project is a recently discovered lithium deposit located in central Sweden. The company has agreed on terms to acquire the project, with closing expected by April.
This project is a near-surface, near-market, exploration-stage lithium property that appears poised to help the company take advantage of Europe’s soaring demand for electric vehicles, and the EU’s strong push for lithium self-sufficiency.
United Lithium Corp.’s Bergby Project: A Near-Surface, High-Grade Deposit Offering Significant Upside Potential
The Bergby project is a recently discovered lithium-rich pegmatite deposit in central Sweden that offers an ideal location.
This property is near to the world-famous Woxna graphite mine, the new Northvolt lithium battery gigafactory and close to major mining and transportation infrastructure, workforce and equipment suppliers.
The Bergby project, if proven up as a commercial deposit, is optimally positioned to benefit from access to the EU market and its growing demand for alternative energy vehicle manufacturing, high tech devices and grid storage systems.
In addition, the project’s proximity to next-generation lithium-ion battery manufacturing plants is critical, as is access to nearby EU educational institutions and low power costs for processing hard rock lithium-bearing minerals cost-effectively.
The Bergby lithium property should be able to capitalize on three key elements:
1. Probable low cost surface and near-surface extraction...
2. Well-established mining and transportation infrastructure, and...
3. Rapid fulfillment of trade regulations allowing tariff-free sales to potential EU lithium customers.
But the location of the Bergby lithium project is only part of the story of its potential.
Historic Sampling Shows Extensive Lithium Mineralization
Mapping and sampling of United Lithium Corp.’s Bergby property site defined an extensive field largely comprising boulders with abundant lithium-bearing minerals.
Assay results from 41 boulders shows Li2O (lithium oxide) values averaged 1.06% within a range from 0.03% to 4.56% Li2O; and Ta2O5 (tantalum pentoxide) assays averaged 168ppm, ranging from 1 ppm to 499 ppm Ta2O5.
Further mapping located lithium mineralization in outcrops. Fifteen samples collected from three outcrops returned Li2O values averaging 1.71%, ranging from 0.01% to 4.65% Li2O; and Ta2O5 values averaging 133 ppm within a range from 16 ppm to 803 ppm Ta2O5.
In 2017, the first and only drill program was completed at the Bergby project.
In that drilling program, 28 of the 33 holes drilled on the property intersected lithium mineralization along approximately 450m strike length.
The deepest holes tested to only 65m below surface with mineralization is still open along strike in both directions and well as down dip.
Three principal styles of lithium mineralization have been observed in widely -spread boulders and outcrops at the Bergby property, providing encouragement that mineralization may be extensively developed.
1. Homogeneous, fine grained to medium-grained leucogranite/aplite: Complex zoned boulders where the aplite material appears to intrude coarse-grained pegmatite. This style is rich in tantalum, with an average grade from 31 boulders of 208 ppm Ta2O5. The lithium mineralogy of this style is not yet confirmed, however, the measured specific gravity of highest-grade samples was relatively light and suggests petalite is a dominant mineral (LiAlSi4O10).
2. Petalite dominated extremely coarse-grained pegmatite: Located in both outcrop and boulders; this style is relatively high in lithium and poor in tantalum.
3. Spodumene-bearing, very coarse grained pegmatite: Coarse spodumene crystals (LiAl(SiO3)2 have been recognized in boulders, with crystals up to 30 cm in length.
What’s Next for United Lithium Corp.’s Bergby Project
The European Union has sounded the alarm on critical raw materials shortages, estimating that to meet its climate neutrality goal, it will need up to 18 times more lithium and five times more cobalt in 2030 than current consumption.
By 2050, the EU estimates that it will need a staggering 60 times more lithium than current demand.
For this reason, the EU has added lithium to its critical materials list and launched a multi-billion dollar fund to help speed the production of raw materials to supply the European battery market.
This means there is potential for significant capital available for projects such as United Lithium Corp.’s Bergby project as the scope of the project comes into focus.
Now that a discovery has been made at Bergby, the next task for United Lithium is to define the overall size and grade of the lithium and tantalum resource on the property.
The deposit at Bergby is open along the strike to the north and south...and there are additional known pegmatites in the area that have never been tested for lithium mineralization.
A simple drill program on the property of another 25 to 40 holes could be hugely impactful for the company in a relatively short period of time.
It’s possible that such a modest drilling program – one that the company has the financial resources to undertake – could be completed within the year with the goal of uncovering a discovery of several million tonnes at the property.
Bottom Line: Why the Future Could Be Bright for United Lithium Corp.
* Demand for lithium is soaring – and the price of lithium has shot up 71.24% in the last two months. With the worldwide shift toward electric vehicles in full swing, the world is desperately seeking to bring new supplies of lithium online...and the markets are likely to reward any company that can do so handsomely.
* United Lithium is a company whose primary asset showing lithium mineralization is in the right place at the right time, as the Bergby project’s location in Sweden is near the new Northvolt lithium battery gigafactory and close to transportation infrastructure.
* Drilling at the Bergby project has shown an extensive lithium-mineralized surface boulder field. 28 of the 33 holes drilled on the property in a 2017 drill program intersected lithium mineralization and the project showed potential high-grade, near-surface lithium potential.
* The company plans to move forward with an additional drill program in 2021 that could potentially reveal a lithium deposit discovery on the property. Positive results from this drill program could be a true game-changer for the company with Europe – and battery companies – so desperate to bring new lithium sources on line as quickly as possible.
Other companies dependent on the battery boom:
Apple (NASDAQ:AAPL) is a leader in Big Tech’s sustainability push…but it’s more than just that. From the products themselves, to the packages they came in, and even the data centers powering them, Apple has gone above and beyond to cut the environmental impact.
But now, it’s even getting into the transportation business. "We're focusing on autonomous systems. It's a core technology that we view as very important. We sort of see it as the mother of all AI projects. It's probably one of the most difficult AI projects actually to work on." Apple CEO Tim Cook on Apple's plans in the car space. Electric vehicles aren’t likely to be left out, either…
Apple's rumored car design means that more active material can be packed inside the battery, giving the car a potentially longer range. Apple is also examining a chemistry for the battery called LFP, or lithium iron phosphate which is inherently less likely to overheat and is thus safer than other types of lithium-ion batteries.
Microsoft (NASDAQ:MSFT) is a tech giant that creates everything from software to hardware and more. This is important because not only does it help companies with exploration of minerals, it relies on them just as much. Microsoft is a company that is also going above and beyond in its emissions goals, aiming to be carbon neutral in the next ten years. A feat that will not be an easy task for such a massive technology corporation. Why does that matter in the lithium race? Because the green energy boom will be destroyed without the vital metal
That’s why Bill Gates’ tech giant has made numerous investments in clean energy across the globe. From Ohio to the Netherlands, Microsoft is pouring millions into solar and wind projects to not only help reduce its own carbon footprint but also help neighboring communities do the same.
In addition to its investments and green operations, Microsoft is also getting into the auto-game. Microsoft’s Azure cloud-based infrastructure and edge computing is going to be pivotal in this new industry. Not only will it allow automakers to analyze data and optimize their products, but it will also give them the opportunity to conduct advanced tests and simulations to fine-tune their software in risk-free environments. It’s even partnering with leaders in the auto industry such as Renault and Audi.
Mark Everest, Information Systems Development Manager, Renault Sport Formula One Team noted, “There are so many factors that are constantly changing and can affect race strategy: track temperature, tire performance, what the other drivers are doing. Simulation helps us quickly understand how to configure the car for a particular track."
Nvidia Corporation (NASDAQ:NVDA) has made major progress towards a more sustainable tomorrow. And as a chipmaker, it is reliant on the production of key metals and minerals such as copper and lithium. But what makes NVIDIA even more special is that it is tackling the ESG trend on all fronts. In fact, it was ranked as one of the world’s top 100 companies to work for due to its incredible working conditions, hiring practices and professional development programs. In addition to its ranking as one of the world’s top companies to work for, it was also ranked on MIT Tech Review’s 50 Smartest Companies list and the Human Rights Watch’s Corporate Equality Index.
Not only is Nvidia a role model for companies in its social and governance stance, it is also firmly committed to building a greener future, as well. From its push to use renewable energy in its day to day operations to its innovative technological advancements in chipmaking which reduce the amount of energy needed to power devices, Nvidia is checking all boxes for impact investors.
This year, Nvidia has done something that many other companies have struggled to do. Not only has it stayed afloat in one of the most trying years in recent history, it has thrived. Since January 2020, Nvidia’s share price has increased from $293 to $525, representing a noteworthy 80% increase in value.
While electric vehicles are the talk of Wall Street right now, autonomous vehicles are on the horizon as well, and they too will rely on a number of key metals and resources. And the leader in this push is Waymo, a subsidy of tech giant Alphabet Inc. (NASDAQ:GOOGL). Waymo may just be the de facto leader in the emerging autonomous vehicle industry. It’s already had cars driving themselves across the United States for several years. In fact, in Arizona alone, Alphabet’s self-driving cars have logged over 6.1 million miles. To put that in perspective, that means that Alphabet’s autonomous cars have driven the distance between New York City and San Francisco over 2100 times. Or, as the company explains, “over 500 years of driving for the average licensed US driver.” Even more impressive, however, the vehicles were only involved in 47 “contact events”, and the vast-majority of the collisions were the result of human error and none resulted in any sort of severe injury for anyone involved.
While these tests are extremely promising for Alphabet’s Waymo, there are still some hurdles to overcome. First and foremost, these lengthy trials took place in Phoenix, a city not exactly known for extreme weather. Second, an issue that may frustrate many drivers, the vehicles operated in a sort of hyper-cautious mode, driving at slower speeds and taking sometimes unnecessary precautions to avoid conflict.
While Alphabet’s Waymo gets a lot of credit for these massive accomplishments, a widely loved and wildly popular chipmaker is at its core. Intel Corporation (NASDAQ:INTC) and Waymo teamed up way back in 2017, and have worked together to fine tune their technology together ever since. Through their mutual knowledge of hardware and software, the tech giants have made leaps and bounds towards building the car of the future.
In addition to its efforts with Waymo, Intel has also been on the forefront of developing its own artificial intelligence and vision hardware. Back in 2017, it acquired MobileEye, a supplier of camera-based chips and software to the global mobile industry. And now, in a new deal with Luminar, another emerging tech company on the forefront of this movement, Intel is positioning itself as its own giant of this new sector.
Canada’s Silicon Valley is all in on the sustainability race, too. Shopify Inc (TSX:SH) Canada’s own e-commerce giant helps users build their own online stores. It has huge clients – everyone from Tesla to Budweiser are on board. And the company is beloved by millennial investors. In addition to its revolutionary approach on e-commerce, Shopify is playing an increasingly active role in creating a greener tomorrow. It has committed to spending at least $5 million annually to help combat climate change. It’s even making cuts throughout its own operations, decommissioning its data centers and sourcing renewable power for its buildings. Thanks the these efforts, Shopify has posted a return of 137% this year alone, and is showing no signs of slowing.
The Descartes Systems Group Inc. (TSX:DSG) is a Canadian multinational technology company specializing in logistics software, supply chain management software, and cloud-based services for logistics businesses. Recently, Descartes announced that it has successfully deployed its advanced capacity matching solution, Descartes MacroPoint Capacity Matching. The solution provides greater visibility and transparency within their network of carriers and brokers. This move could solidify the company as a key player in transportation logistics which is essential-and-often-overlooked in the mitigation of rising carbon emissions.
Another way to get some indirect exposure to the booming tech, EV and mineral industries is through AutoCanada (TSX:ACQ), a company that operates auto-dealerships through Canada. The company carries a wide variety of new and used vehicles and has all types of financial options available to fit the needs of any consumer. While sales have slumped this year due to the COVID-19 pandemic, AutoCanada will likely see a rebound as both buying power and the demand for electric vehicles increases. As more new exciting EVs hit the market, AutoCanada will surely be able to ride the wave.
Burcon NutraScience Corporation (TSX:BU) is a Canadian tech firm rethinking the our diets. And while that may not seem exciting for minerals investors, it is a key stock to watch in the wider sustainability boom. With a focus on high-purity, sustainable, flavorful, and affordable products, Burcon has checked every box in the consumer’s book. Founded way back in 1998, the company has been at the forefront of the movement for over two decades, and it’s only become more refined since.
According to its mission statement, Burcon “seeks to improve the health and wellness of global consumers through the discovery and development of sustainable, functional and renewable plant-based products for the global food and beverage industries.”
Mogo Finance Technology Inc. (TSX:GO) is a new spin on unsecured credit, which is a burgeoning sub-segment of FinTech. Providing loan management, the ability to track spending, stress-free mortgages, and even credit score tracking, Mogo is at the forefront of an online movement to assist users with their financial needs.
Mogo’s software analyzes borrowers instantly and greatly reduces the traditionally cumbersome underwriting process for loans. It’s online only, so there’s very low overhead and a ton of cash to spend on marketing. Labeled as “the Uber of finance” by CNBC, Mogo is definitely turning heads.
With increasing membership growth and revenue lines continuing to improve, and a platform which many banks have failed to offer, Mogo could well become an acquisition target in the near future.
By. Jody Wilson
The technical information presented in this article has been reviewed and approved by Robert W. Schafer QP, PGeo, as defined by NI 43-101
**IMPORTANT! BY READING OUR CONTENT YOU EXPLICITLY AGREE TO THE FOLLOWING. PLEASE READ CAREFULLY**
This article contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this article include that demand for lithium will increase in future as currently expected; United Lithium’s business and plans, including with respect to undertaking further acquisitions, completing the acquisition of Bergby, acquiring additional mineral claims nearby Bergby, complying with the terms of the Bergby acquisition and carrying out exploration activities in respect of its mineral projects; that most of the lithium is reachable close to surface; that they can reduce costs compared to many similar projects; that ULC can produce a PEA by Q3 2021; and that they can raise $4M quickly. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include that the Company may not be able to finance its intended drilling programs, aspects or all of the property’s development may not be successful, their methods of mining of the lithium may not be cost effective; the risks that the acquisition does not complete as contemplated, or at all; that United Lithium does not complete any further acquisitions; that they do not acquire the additional mineral claims in the region of the Project prior to March 21, 2021; that United Lithium does not spend $1,000,000 on exploration work on the Project within 18 months from the Closing Date; the Company may not be able to carry out its business plans as expected; changing costs for mining and processing; permits may not be granted for the mining projects; increased capital costs; the timing and content of upcoming work programs; geological interpretations and technological results based on historical or even current data that may change with more detailed information or testing; potential mineral recoveries assumptions based on limited test work with further test work may not be viable; competitors may offer cheaper lithium; more production of lithium could reduce its price, or the price may drop for other reasons; alternatives could be found for lithium in battery technology; the availability of labour, equipment and markets for the products produced; and despite the current expected viability of its projects, that the minerals cannot be economically mined on its properties. The forward-looking information contained herein is given as of the date hereof and the writer assumes no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.
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