Every major auto company on the planet is scrambling for Lithium-based energy. This demand is creating a major supply-demand issue as the World turns to Greener, cleaner energy.
Volkswagen alone will spend 24 Billion on electric cars by 2030, and that’s just one company and one use for Lithium. QMC Quantum Minerals (TSXV: QMC) – (OTC: QMCQF) is situated in the 2nd best place in the World for Mining, according to Fraser Institute’s Global Ranking.
There are few doubts that lithium could be one of the best sectors to consider on the investment horizon. The lithium ETF price has rallied yet again this year, nearing its highs.
The appetite for lithium can only get steadily higher, and it is still a long way off from being fulfilled. The demand for electric cars alone is enough to make this shinny substance the premium commodity of the next decade, and beyond. While your smartphone Li-ion battery contains a few grams of lithium, a Tesla “Model S” for instance, might have 100 pounds of lithium. And Tesla is just one of the major forces driving lithium demand.
Lithium carbonate prices could easily rise from about $7,000 per ton to $10,000 in the next few years. (Source: “Luster of Advantage Lithium Shines as Tesla Surpasses GM in Value,” NASDAQ, May 8, 2017.) They are already up 30% over just a few years ago.
But where can you still position yourself in lithium sector stocks?
Let us tell you straight up, we are all about the emerging mining companies getting in on the producing end of lithium. We think they have massive potential upside. Case in point: QMC Quantum Minerals.
Many of the emerging lithium producers are traded in the market as junior, small cap stocks. So, they are younger and, typically in the development phase. The lithium stocks in this sector are relatively unknown and, until recently, there haven’t been investment funds specializing in this sector.
We count this situation as an advantage, since our readers often look to acquire stock in these companies at the pennies per share level, making it easy to double, triple or max their returns in the 10X to 20X returns range.
We have located several companies with that kind of potential, but none is more impressive than QMC Quantum Minerals.
Canadian Based and Focused On the Real Deal in Lithium Mining
QMC Quantum is a Canadian mining company that’s squarely focused on the country’s Manitoba mineral region – of the best mining districts in the world. QMC has been assembling mineral interests since 2010, but they’ve really hit their stride with the acquisition of the Cat Lake Lithium Property (formerly the Irgon Mine) in 2016. Here’s what they now have in hand:
Cat Lake Lithium Property
Between 1953-1954 the Lithium Corporation of Canada Limited drilled 25 holes into the property’s Irgon Dike and reported a historical resource estimate of 1.2 million tonnes (metric) grading 1.51% Li20 over a strike length of 365 meters and to a depth of 213 meters.
The company has to carry out detailed drill program required to update this historical resource to current NI 43-101 standards (the official resources measure), but the company’s geological team and advisors see no reason to disagree with the accuracy of the historical drill result.
Historic metallurgical tests reported an 87% recovery from which a concentrate averaging 5.9% Li2o was obtained.
In fact, the lithium prospect was good enough for the historic developers of the project to put a 500 ton per day mining mill and sink a three compartment shaft into the site. Those were taken out after the lithium market fell off in the 50s and 60s.
The Irgon occurrence and several other known pegmatite dikes are situated on four adjoining mineral claims that comprise the Cat Lake Property. The total area covered by the four claims is 700 hectares.
Doing the simple math here, it looks like QMC has the potential for roughly $150 – 200 million worth of lithium in ground at current prices. That’s a lot of high grade lithium.
This Junior Player Packs a lot of Bang for The Buck
It impressed us too that QMC Quantum Minerals had been developing other properties in Manitoba with gold, silver and copper or zinc mineralization. In all the company has five projects that it has been developing including two VMS properties, the Rocky Lake and Rocky-Namew known collectively as the Namew Lake District Project, and the Carrot River Gold Property. All are located in Manitoba.
The Cat Lake (Irgon Dike) Lithium Property is clearly the star.
FEATURE STOCK: FOR COMPARISON
|QMC Quantum Minerals Corp.|
(OTC: QMCQF TSX.V: QMC)
Market Cap: $1.85 Million
|Quantum Minerals Corp. is a junior mineral exploration company focused on the acquisition, exploration and development of mineral properties. QMC holds interests in certain mineral properties across Canada. QMC recently added the Cat Lake lithium project in Manitoba, which features a non-43-101 compliant historical resource of 1-million tonnes of 1.5% Li²O discovered by the Lithium Corporation of Canada in 1957.|
The Winners: Too Late To Capture, But Good To Study
These stocks represent some of the winners in the Lithium mining space. These are a mix of Lithium focused companies or companies with Lithium production as a component of their business.
|Sociedad Quimica y Minera de Chile|
Market Cap: $7.2 billion
|SQM, a worldwide company based in Chile and founded in 1968, has today a strong global presence in a wide variety of industries and applications through its five business lines: Specialty Plant Nutrition, Iodine and derivatives, Lithium and derivatives, Industrial Chemicals and Potassium.
Latest Headline:SQM buys 50% stake in Australian lithium project for $110M
Market Cap: $9.1 billion
|Albemarle Corporation, headquartered in Charlotte, NC, is a global specialty chemicals company with leading positions in lithium, bromine and refining catalysts.
Latest Headline: Albemarle receives prestigious LEED Gold certification
|Galaxy Resources Limited(ASE: GXY)|
Market Cap: $140 million
|Galaxy Resources Limited is a lithium-focused resources company, with assets spanning Australia, Canada and Argentina.
Galaxy is currently advancing plans to develop the Sal de Vida Lithium and Potash Brine Project (“Sal de Vida”) in Argentina, which is situated in the Lithium Triangle, a region where Chile, Argentina and Bolivia meet, and presently accounts for 60% of global lithium production. Sal de Vida is a proven high quality resource has excellent promise as a future low cost production facility.
Latest Headline: James Bay Drilling - Continued High Grade Mineralisation
|Orocobre Ltd(TSE: ORL)|
Market Cap: $278 million
|Orocobre is building a substantial Argentine based industrial chemicals company through its portfolio of lithium, potash and boron assets.
In partnership with Toyota Tsusho Corporation (TTC) and JEMSE, Orocobre has built and is now operating the world’s first commercial, brine-based lithium operation constructed in approximately 20 years.
Latest Headline: Orocobre Thinks $10,000 Lithium Is Here To Stay.
Looking Forward: We Give QMC A Strong Speculative BUY Rating
In the lithium game, there are a small group of star performers, a few of which we have mentioned. Then there are wannabees .. those few companies that are milking the lithium trend with no real substance. The difference is that the stars really have proven lithium and the ability and experience to take it to the mining stage. We put QMC Quantum Minerals in the later group.
The reality is that we will likely need all of the lithium that can be produced to fuel the huge demand going forward. Developers, like QMC Quantum Minerals are planning to meet the demand and become a mainstay of the industry.
We like the fact that QMC Quantum Minerals is focusing its efforts on their newly acquired lithium prospect. We also like the fact that the company is well funded (it just oversubscribed a raise for $1.1 million CDN), had additional strong mineral prospects and is located in the heart of possibly one of the best, most prolific mining regions in the world in Manitoba. Their property is just 20km from the world class Tanco Mine Property, previously North America’s largest and sole producer of spodumene (Li), tantalite (Ta) and pollucite (Cs) rare minerals.
QMC just announced that they are preparing 3d image interpretation of their various dikes on the Cat Property. That’s the next step in defining the exactly resource using modern mining technology in order to advance toward mining.
From this, we expect that the company will confirm what its geologists suspect – that the site hosts million tons of ore that contain high grade lithium.
Photo: Tesla Lithium Powercells
In order to meet demand, Tesla alone says it needs to secure at least 15,000 tons of raw lithium to meet its production up to 2020. Meanwhile, demand could double, given that Tesla expects to increase car production tenfold by 2018.
That kind of solid news brings in a lot of interest and makes it easy to finance the exploration and development needed to move the project to production.
It also sparks investors and market watchers on a path to acquire stock in anticipation of results. Based on those two factors alone, we think QMC could be a quick double or an easy triple, depending on timing. After that, we will look for results from prospects to produce real value in a potential blockbuster lithium play.
In either case, we have put QMC Quantum Minerals on our “must own now” list on order for our readers to catch the lithium wave that’s still making this a very profitable mineral sector, especially in the lead players and their prodigies.
USA News Group
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