Canadian Junior Miners Seeing Major Increase in Value
Dec 15, 2017
It has been a relatively tough few years for mining companies, with commodity and stock prices stagnating, but after a second straight year of increases in both of these metrics, Canadian junior mining companies are showing serious signs of optimism as positive figures begin to emerge.
Companies in the mining side of lithium are especially positive including QMC Quantum Minerals Corp. (TSXV: QMC) (OTC: QMCQF), Lithium Americas (TSX:LAC), Critical Elements (TSXV:CRE) and Nemaska Lithium Inc. (TSX: NMX) (OTC: NMKEF).
Demand for lithium is projected to mushroom over 300% within the next eight years and the commodity’s price is helping to drive positive results for juniors.
PwC estimates that the top 100 mining companies on the TSX Venture Exchange registered $14.4 billion in equity in the year ending June 2017, up from $12.2 billion in the previous year. In the same period, the cash balances of the top 100 grew to Cdn $ 1.57 billion, a rise of 74%, and the largest amount in five years.
A notable player in the lithium mining sector is QMC Quantum Minerals Corp. (TSXV: QMC) (OTC: QMCQF), which is poised to take advantage of Canada’s hard-rock lithium sector. The company is on course in a well-known region in Manitoba with very favorable mining logistics.
Other junior miners looking to deliver new levels of lithium resources include Lithium Americas (TSX: LAC) (OTCQX: LACDF), Critical Elements (TSX: CRE), and Nemaska Lithium Inc. (TSX: NMX) (OTC: NMKEF).
All of these junior Canadian companies have seen considerable value increases this year. According to industry experts, this rally indicates increasing confidence, with investors ready to accept additional risk.
NON-TRADITIONAL METALS LEADING THE WAY
While performance for traditional heavy hitters like gold and steel has been relatively positive, it is fringe metals driving new industry trends that have fed this new growth. Metals like zinc and copper have maintained consistent increases in value over the last few years, while gold has held on to gains reported in 2016. However, battery metals are all the rage at the moment. Lithium, a key component of dry cell batteries used in the production of various mobile devices and electric cars is credited with the positive market trends, riding on the back of Tesla’s unveiling of future production plans.
Lithium is perhaps the most important components in battery production, due its light weight and high electrochemical potential. In order to manufacture lightweight batteries, these two qualities are very important. The challenge for lithium is that it is considerably rare and takes time to produce, so new exploration efforts hold high premium among investors.
With Tesla aiming for 500,000 electric cars by 2018, the demand for lithium to manufacture the high battery demand has made the metal one of the hottest commodities of 2017. The lithium rush has taken center stage for Canadian mining juniors like QMC Quantum Minerals, Lithium X and Quebec-based Nemaska Lithium Inc. who are looking to capitalize on this new demand.
QMC QUANTUM MINERALS A LITHIUM LEADER
Being a Canadian-based junior miner has some other major advantages for QMC Quantum Minerals.
In order to get to a lithium producing stage, miners need to take a direct approach to develop known resources. There’s no time to delay for permitting, lengthy approvals or red tape.
QMC has sidestepped these issues by developing its current project in the Province of Manitoba. The mineral region is now ranked as the 2nd most favorable mining district in the world according to the Fraser Institute, displacing Australia and others.
Manitoba has competitive tax regimes and efficient permitting procedures surrounding environmental regulations and land-claims.
QMC acquired a known lithium property in 2016 –the Cat Lake Lithium Property, formerly known as the Irgon Mine.
It’s easy to see why QMC is in the region; their property is just 20km from the world class Tanco Mine Property, previously North America’s largest and sole producer of spodumene (Li).
A predecessor to QMC drilled 25 holes into the property’s Irgon Dike between 1953 and 1954. They reported a historical resource estimate of 1.2 million tonnes grading 1.51% Li20 over a strike length of 365 meters and to a depth of 213 meters.
QMC Quantum Mineral’s geological team agree with the accuracy of those historical drill results and are moving rapidly to bring the resource estimates to a modern, accurate reading with a goal of producing or selling the lithium.
Tesla’s success with Gigafactory 1 in Nevada, which is already in operation, gives cause for optimism among lithium miners.
That establishment alone, which Tesla claims will produce as much battery power as the rest of the world by 2018, has seen Tesla partner with major lithium mining juniors to ensure steady supply over the coming years. While much of Tesla’s engagements are based in Chile, companies across the globe have taken note, with the inclusion of the aforementioned Canadian companies which have interests globally.
And though North America is considerably scarce in lithium ore, Canadian companies have positioned themselves to benefit from the existing reserves. QMC Quantum Minerals for instance could be one of the newest near term producers of lithium.
With the Elon Musk-led electric vehicle boom expected to continue as more automakers come on board, this rare earth metal is definitely shaping up to be a major investment opportunity for the near future.
Canadian junior miners are all in on the new mining optimism and investors are likely to follow them closely as they continue to show strong value upticks.
POTENTIAL COMPARABLES
Lithium Americas (TSX: LAC) (OTCQX: LACDF)
Lithium Americas Corp. is developing the Cauchari-Olaroz lithium project, located in Jujuy, Argentina, through its 50% interest in Minera Exar. On July 17th, the company announced that it has closed the investment agreement with BCP Innovation Pte Ltd., a wholly-owned subsidiary of Bangchak Corporation Public Company Ltd. Pursuant to the Investment Agreement, Bangchak has agreed to provide Lithium Americas with an aggregate of US$113 million in financing primarily to fund a portion of the Company’s share of construction costs for the Cauchari-Olaroz lithium project in Jujuy Province, Argentina.
Critical Elements (TSX: CRE)
Critical Elements Corporation, a junior mining company, acquires, explores, and develops mining properties in Canada. It primarily explores for copper, zinc, gold, silver, nickel, lead, lithium, niobium, tantalum, and platinum group elements. Its flagship project is the Rose lithium-tantalum property that consists of 500 claims covering a total area of 260.90 square kilometers, located in the Eastmain greenstone belt. The company was formerly known as First Gold Exploration Inc. and changed its name to Critical Elements Corporation in February 2011. Critical Elements Corporation is headquartered in Montreal, Canada.
Nemaska Lithium Inc. (TSX: NMX) (OTC: NMKEF)
Nemaska Lithium intends to become a lithium hydroxide supplier and lithium carbonate supplier to the emerging lithium battery market that is largely driven by electric vehicles, cell phones, tablets and other consumer products. The Corporation is developing in Quebec one of the most important spodumene lithium hard rock deposit in the world, both in volume and grade. The spodumene concentrate produced at Nemaska Lithium's Whabouchi mine will be shipped to the Corporation's lithium compounds processing plant to be built in Shawinigan, Quebec. This plant will transform spodumene concentrate into high purity lithium hydroxide and carbonate using the proprietary methods developed by the Corporation, and for which patent applications have been filed.
Dec 15, 2017
It has been a relatively tough few years for mining companies, with commodity and stock prices stagnating, but after a second straight year of increases in both of these metrics, Canadian junior mining companies are showing serious signs of optimism as positive figures begin to emerge.
Companies in the mining side of lithium are especially positive including QMC Quantum Minerals Corp. (TSXV: QMC) (OTC: QMCQF), Lithium Americas (TSX:LAC), Critical Elements (TSXV:CRE) and Nemaska Lithium Inc. (TSX: NMX) (OTC: NMKEF).
Demand for lithium is projected to mushroom over 300% within the next eight years and the commodity’s price is helping to drive positive results for juniors.
PwC estimates that the top 100 mining companies on the TSX Venture Exchange registered $14.4 billion in equity in the year ending June 2017, up from $12.2 billion in the previous year. In the same period, the cash balances of the top 100 grew to Cdn $ 1.57 billion, a rise of 74%, and the largest amount in five years.
A notable player in the lithium mining sector is QMC Quantum Minerals Corp. (TSXV: QMC) (OTC: QMCQF), which is poised to take advantage of Canada’s hard-rock lithium sector. The company is on course in a well-known region in Manitoba with very favorable mining logistics.
Other junior miners looking to deliver new levels of lithium resources include Lithium Americas (TSX: LAC) (OTCQX: LACDF), Critical Elements (TSX: CRE), and Nemaska Lithium Inc. (TSX: NMX) (OTC: NMKEF).
All of these junior Canadian companies have seen considerable value increases this year. According to industry experts, this rally indicates increasing confidence, with investors ready to accept additional risk.
NON-TRADITIONAL METALS LEADING THE WAY
While performance for traditional heavy hitters like gold and steel has been relatively positive, it is fringe metals driving new industry trends that have fed this new growth. Metals like zinc and copper have maintained consistent increases in value over the last few years, while gold has held on to gains reported in 2016. However, battery metals are all the rage at the moment. Lithium, a key component of dry cell batteries used in the production of various mobile devices and electric cars is credited with the positive market trends, riding on the back of Tesla’s unveiling of future production plans.
Lithium is perhaps the most important components in battery production, due its light weight and high electrochemical potential. In order to manufacture lightweight batteries, these two qualities are very important. The challenge for lithium is that it is considerably rare and takes time to produce, so new exploration efforts hold high premium among investors.
With Tesla aiming for 500,000 electric cars by 2018, the demand for lithium to manufacture the high battery demand has made the metal one of the hottest commodities of 2017. The lithium rush has taken center stage for Canadian mining juniors like QMC Quantum Minerals, Lithium X and Quebec-based Nemaska Lithium Inc. who are looking to capitalize on this new demand.
QMC QUANTUM MINERALS A LITHIUM LEADER
Being a Canadian-based junior miner has some other major advantages for QMC Quantum Minerals.
In order to get to a lithium producing stage, miners need to take a direct approach to develop known resources. There’s no time to delay for permitting, lengthy approvals or red tape.
QMC has sidestepped these issues by developing its current project in the Province of Manitoba. The mineral region is now ranked as the 2nd most favorable mining district in the world according to the Fraser Institute, displacing Australia and others.
Manitoba has competitive tax regimes and efficient permitting procedures surrounding environmental regulations and land-claims.
QMC acquired a known lithium property in 2016 –the Cat Lake Lithium Property, formerly known as the Irgon Mine.
It’s easy to see why QMC is in the region; their property is just 20km from the world class Tanco Mine Property, previously North America’s largest and sole producer of spodumene (Li).
A predecessor to QMC drilled 25 holes into the property’s Irgon Dike between 1953 and 1954. They reported a historical resource estimate of 1.2 million tonnes grading 1.51% Li20 over a strike length of 365 meters and to a depth of 213 meters.
QMC Quantum Mineral’s geological team agree with the accuracy of those historical drill results and are moving rapidly to bring the resource estimates to a modern, accurate reading with a goal of producing or selling the lithium.
Tesla’s success with Gigafactory 1 in Nevada, which is already in operation, gives cause for optimism among lithium miners.
That establishment alone, which Tesla claims will produce as much battery power as the rest of the world by 2018, has seen Tesla partner with major lithium mining juniors to ensure steady supply over the coming years. While much of Tesla’s engagements are based in Chile, companies across the globe have taken note, with the inclusion of the aforementioned Canadian companies which have interests globally.
And though North America is considerably scarce in lithium ore, Canadian companies have positioned themselves to benefit from the existing reserves. QMC Quantum Minerals for instance could be one of the newest near term producers of lithium.
With the Elon Musk-led electric vehicle boom expected to continue as more automakers come on board, this rare earth metal is definitely shaping up to be a major investment opportunity for the near future.
Canadian junior miners are all in on the new mining optimism and investors are likely to follow them closely as they continue to show strong value upticks.
POTENTIAL COMPARABLES
Lithium Americas (TSX: LAC) (OTCQX: LACDF)
Lithium Americas Corp. is developing the Cauchari-Olaroz lithium project, located in Jujuy, Argentina, through its 50% interest in Minera Exar. On July 17th, the company announced that it has closed the investment agreement with BCP Innovation Pte Ltd., a wholly-owned subsidiary of Bangchak Corporation Public Company Ltd. Pursuant to the Investment Agreement, Bangchak has agreed to provide Lithium Americas with an aggregate of US$113 million in financing primarily to fund a portion of the Company’s share of construction costs for the Cauchari-Olaroz lithium project in Jujuy Province, Argentina.
Critical Elements (TSX: CRE)
Critical Elements Corporation, a junior mining company, acquires, explores, and develops mining properties in Canada. It primarily explores for copper, zinc, gold, silver, nickel, lead, lithium, niobium, tantalum, and platinum group elements. Its flagship project is the Rose lithium-tantalum property that consists of 500 claims covering a total area of 260.90 square kilometers, located in the Eastmain greenstone belt. The company was formerly known as First Gold Exploration Inc. and changed its name to Critical Elements Corporation in February 2011. Critical Elements Corporation is headquartered in Montreal, Canada.
Nemaska Lithium Inc. (TSX: NMX) (OTC: NMKEF)
Nemaska Lithium intends to become a lithium hydroxide supplier and lithium carbonate supplier to the emerging lithium battery market that is largely driven by electric vehicles, cell phones, tablets and other consumer products. The Corporation is developing in Quebec one of the most important spodumene lithium hard rock deposit in the world, both in volume and grade. The spodumene concentrate produced at Nemaska Lithium's Whabouchi mine will be shipped to the Corporation's lithium compounds processing plant to be built in Shawinigan, Quebec. This plant will transform spodumene concentrate into high purity lithium hydroxide and carbonate using the proprietary methods developed by the Corporation, and for which patent applications have been filed.
