As fleets of electric-powered trucks and buses hit the road, these small companies are the best lithium stocks to own now
All bets that lithium supplies are ready to meet demand are off!
The unexpectedly early arrivals of electric trucks and buses have surprised everyone. Lithium miners, most of all.
Navistar is building all-electric dump trucks. BYD is unleashing fleets of new city buses. Komatsu’s 45-ton mine hauler has already passed its test runs with flying colors. Even car demand is breaking higher than expected thanks to a new commitment at Volkswagen. [i]
And the biggest boon for lithium miners who are ready to expand immediately is that most of these breakthrough vehicles are slated to go into mass production next year. Only a few mining companies will be able to move fast enough.
These Three Companies Will Thrive Meeting the New Demand for Lithium
Only one major lithium miner has planned for the surge, but three small North American companies could be the big winners as demand for lithium explodes.
If you are looking for a truly small junior with big potential, Clean Commodities Corp. (TSXV:CLE) could be a very interesting. It has five potential mine sites comprising more than 78,000 acres near successful mines owned by Nemaska. But it has no defined proven and probable resource estimates yet. Wait for those estimates before investing.
Nemaska Lithium (TSX:NMX, OTC:NMKEF) has 24 million tonnes of proven and probable reserves at its Whabouchi mine in Quebec. It plans to mine ore there and haul it to its own nearby plant to produce lithium hydroxide and lithium carbonate. NMX could become one the world’s cheapest producer of these battery compounds.[ii] But only a fraction of the intended plant will be up and running this year. Nemaska will be fully ready for the surge late next year.
Meanwhile, we believe QMC Quantum Minerals Corp. (TSXV: QMC, OTC: QMCQF) is the most exciting and least risky of the small Canadian lithium miners. Not only does it have the advantage of reopening a former lithium mine for a fast startup, Quantum is an undiscovered gem for multiple reasons.
QMC Quantum Minerals (QMC) Can Jump Ahead of the Pack
Lithium investors did well playing the increased lithium demand thanks to laptops and cellphones. Then Tesla upped the game tenfold. Miners adjusted again.
But they did not anticipate just how close the even bigger lithium users were. Sixty-foot buses, fleets of Class 4-7 delivery trucks, and 45-ton mining trucks are already designed, tested, and due to go into production within months.
Now we look to QMC to fast-track its production in time to meet this new surge in lithium demand. QMC is reopening a historic lithium mine in Manitoba that was mothballed in 1957 when lithium prices were low. It’s perfectly placed for access to rail and highways in a province that welcomes mining.
But the best news is that QMC began stripping the overburden to proceed with re-testing and reopening the mine last year. That means it can be ready to deliver lithium into growing demand very quickly.
Great Property, Superb Prospects
QMC has claims to four areas covering 700 hectares near Cat Lake in Manitoba.
According to QMC, “the company, the property covers the former Irgon Mine and several known pegmatite dikes of which currently the largest and best exposed is the spodumene-bearing Irgon Dike.”
Let’s break that down. Pegmatites are intrusions of richly crystalized rock that were formed when hot magma cooled. In this case, the pegmatites are of spodumene, which is the name for the mineral lithium aluminum inosilicate. Usually spodumene is dull and ashy gray, but sometimes it appears as the clear gemstones hiddenite and kunzite. Spodumene that is rich in lithium is a potentially rapid source of lithium.
The big point to know about QMC is that the Irgon Mine area it owns is possibly the best lode of lithium in the entire huge province. The four Cat Lake claims that QMC announced last year comprised 1.2 million tonnes of ore grading 1.51% lithium oxide. That’s higher than any other company’s lithium deposits in the province. [iii]
So Cat Lake/Irgon is was already exceptionally rich. But it just got richer, because in January, QMC staked out additional 9 claims to bring its holdings to 13 claims covering 6,538 acres.[iv]
The Big Upside Is Wide Open to Small Producers
QMC’s ready-to-work holdings make it a surprisingly important company for its size.
The lithium (Li) industry is dominated by unfriendly and unstable sources.[v] China and Chile now produce two-thirds of world supplies. Australia is third, but with only 12%.
You can easily see that a small increase in production for these large-scale producers isn’t likely to be a windfall for investors. Another ton of lithium to them is like adding a teaspoon of water to a gallon bucket.
But the majors shot themselves in the foot in an even worse way… To keep Li prices from crashing, they decided not to expand production. Now they’re not ready and they cannot gear up rapidly for the coming surge.
How China and Chile Gave QMC a Head Start
This is the most important reason QMC should be a big mover this year. It can get lithium to market faster than the big companies.
That’s because there are two ways to produce lithium for manufacturers. The big Chinese and Chilean companies use the brining method. They flood large areas and allow the water to evaporate, leaving lithium salts behind.
For them, increasing production is a four-year process. One year to build new dikes and flow systems, three more years for the water to evaporate.
QMC is mining hard-rock lithium. As soon as it updates the mine’s historical resource estimate of 1.2 million tonnes grading 1.51% lithium oxide, it can start moving some rock! QMC believes that report is accurate, all it needs to do is confirm.
10 More Reasons QMC Is the Best Lithium Play for 2018
- QMC Is Working in a Mining Sweet Spot—In 2016, the Fraser Institute of Mining Companies rated Manitoba the Second Most Favorable spot for mining in the world. Friendly government, good roads and rails… and rich properties bring it all together[vi].
- Credible Practices, Believable Numbers, Rule in Canada—Canada is a helpful government when it comes to mining, but not a careless one with investor’s money. Every mine must submit an NI 43-101 report with exacting specifications and disclosures to protect investors.
- Daimler Is Moving Fast—The largest truck manufacturer in the world can’t be overlooked. Daimler owns multiple brands … but the one to watch immediately is FUSO. Daimler owns that, too, and it has already tested several electric delivery trucks successfully. Now FUSO is moving into mass production for mid-sized trucks and vans, which it expects to begin next year. With major customers like UPS, FUSO’s e-Canter truck is expected to make a fast rollout. That means huge, new lithium demand for FUSO’s battery packs[vii].
- Navistar, Too—And the current #2 among truck companies, Navistar, is making its own push for e-trucks. Navistar has been involved in the Defense Department Super-Trucks research programs since 2006. Navistar’s Workhorse brand trucks expect to start selling all-electric mid-size trucks to delivery fleets next year.
- Even Miners Are Making Lithium More Urgent—It may be ironic, but one other company likely to increase lithium demand is Komatsu. Komatsu, formerly International Harvester, makes mining equipment. It just tested its first 45-ton all-electric mine dump truck, which can haul 65 tons of rock. It’s NMC lithium battery pack weighs 4 ½ tons—yes, tons!
- Technology Keeps Moving the Needle in Lithium’s favor—EV’s are here. But other technologies are increasing Li demand, too. Samsung has developed a new Li battery that can recharge 5X faster, in just 12 minutes, because it uses graphene balls in both the anode and cathode. The use of graphene will enable batteries with 45% more capacity than today’s batteries.
- Buses Will Get There Faster—The move to electric buses is going even faster than with trucks. BYD’s new Los Angeles factory will produce 1,500 e-buses annually.[viii] The company is also making Shenzen, China, the first major city in the world with an all-electric bus fleet. BYD has introduced e-buses in 21 European countries.
- Cars Are Accelerating—Automakers are moving forward with electric cars faster than predicted with new announcements every day. Volkswagen promises its 16 factories are ready to pour out 3 million EVs a year by 2020. It just bought $25 billion in battery supplies to keep up and it’s looking to buy $62 billion on batteries for its North American markets right away.[ix]
- Pegmatites Mean Speed—Geological jargon can be daunting, but here’s what matters. QMC’s claims are on lands rich in pegmatites—formations of igneous rock that contain large crystals. Once a claim is established and mill is set up, production of lithium carbonate can begin within days[x].
- Juniors Explore, Majors Buy—There could be a buyout to amply reward early investor in the future as QMC proves its Cat Lake Mine is championship quality.