Lithium Developer Benefitting ‘Handsomely’ from Renewed EV Interest

Source: The Critical Investor for Streetwise Reports   01/18/2021

The Critical Investor takes a look at recent developments at Standard Lithium and speaks with CEO Robert Mintak.

1. Introduction

Despite COVID-19 gearing up for a second wave, Standard Lithium Ltd. (SLL:TSX.V; STLHF:OTCQX) continues to raise money in very significant quantities for a typical lithium developer. I continue to be impressed by CEO Robert Mintak, who raised C$34.5 million in December of last year, after completing a heavily oversubscribed C$12.1 million round in February of that same year. Although COVID-19 is feared to have an impact on real world economics again, optimism seems to vaporize these sentiments quickly, fueled by a US$900 billion stimulus package signed by Trump at the last minute on December 27, 2020, and maybe even more importantly, two authorized vaccines, being allocated to frontline health care workers worldwide at the moment, and later on to the general public.

Adding to this is the recovery of the Chinese economy, which seems to be immune to second pandemic waves that are sending many countries into lockdown again and is ramping up production and commodity imports to pre-COVID levels, and by doing so seems to function as a kickstarter of the world economy. Following this news were extremely high PMI figures coming in very recently from Europe, indicating strong future recovery sentiments triumphing current lockdown fallouts. I am still amazed by the ongoing disconnection of real world economics and stock markets, as many companies are at the brink of bankruptcy and massive lay-offs, identifying the K-type recovery of stock markets, sending selected stocks to unimagined and unprecedented highs (Amazon and numerous other internet/delivery companies), while others go down the drain (for example, airlines).The remarkable news flow sent stock markets across the globe to multiyear and sometimes all-time highs, and regained enthusiasm for anything electric vehicle (EV) related. Tesla boss Elon Musk declared he was going after his own lithium projects last year, and among other things called for nickel contracts. Besides this, as Tesla performed well and locked in five quarters of profits, its share price went through the roof.

This all fueled a craze in lithium stocks in the fourth quarter of last year, with supply showing signs of tightening after several years of oversupply and the resulting low lithium product pricing in both spot pricing and contract pricing. A quick clarification: contract pricing is the actual price industrial scale off-takers are paying to industrial scale mining companies for large amounts of lithium products, but the pricing is very hard to track, and spot pricing is the price smaller off-take parties pay to small scale producers, but which is better to track for market watchers like Fastmarkets, Asian Metals and Benchmark Minerals. As with uranium, another opaque market handling spot and contract prices, Standard Lithium benefitted handsomely as well from the renewed EV interest almost singlehandedly generated by Tesla, as can be seen in its chart:

     
Share price 1 year timeframe; Source tmxmoney.com

I must say CEO Robert Mintak has a sixth sense for timing of financings related to COVID-19 outbreaks, as the first raise was closed right before the first wave, and the current one right before the second wave. As it seems Standard Lithium is cashed up now to complete and optimize both the already functional and lithium products producing LiSTR and SiFT demonstraton (pilot) plants, it definitely was time to catch up with Mintak about the current state of affairs.

All presented tables are my own material, unless stated otherwise.

All pictures are company material, unless stated otherwise.

All currencies are in US Dollars, unless stated otherwise

2. Financing

Standard Lithium recently announced the closing of the aforementioned C$34.5 million public offering, at a price of C$2.20 with no warrants, which was impressive to say the least, as no lithium junior comes even close. As it was a short form prospectus, there is no holding period, but this didn’t keep the share price from exploding higher. It never dropped to C$2.20 levels after announcing the closing news, which really is a sign of strength. On the contrary, existing warrant holders exercised their warrants to the tune of C$5.5 million since October 1, 2020, so the company added about C$40 million to the treasury since then.

The net proceeds from the offering will be used to fund ongoing work programs like ongoing testing and optimization work at the SiFT lithium carbonate crystallization pilot plant and the LiSTR Direct Lithium Extraction demonstration plant, preliminary engineering work to advance commercial development of the proprietary lithium extraction process, negotiation and development of a joint venture with LANXESS, and for working capital and general corporate purposes. CEO Mintak was particularly happy to welcome BNP Paribas Energy Transition Fund, which did extensive due diligence before coming on board. It seems everything is back on track and going smoothly after COVID-19 caused delays in execution over the summer. Even the lithium product prices seem to have just turned a corner, let’s have a quick look for an update in this department first.

3. Lithium product pricing update

I usually use three sources to determine the current state of affairs with lithium product pricing. These are:

1. Presentation of Lithium Americas, an advanced lithium developer that usually has one or more useful charts on pricing developments to show for:

Please note the significantly higher pricing out of Japan and Korea, as opposed to China, that are leading at the moment for spot prices.

2. Sale prices of Orocobre, an actual lithium carbonate producer, which can be found in its financials (it also has very interesting further information regarding lithium market fundamentals on its website, which is recommended reading material). The H1 FY2020 sales price was US$6,157/t FOB, and the expected Q3 FY2020 sales price was US$5,000/t FOB. However, the realized sales price was just US$3,102/t FOB. Sales volumes were approximately 22% battery grade lithium carbonate and the remainder primary grade lithium carbonate.

3. The monthly update for lithium product pricing and status of lithium developers/explorers, written by fellow writer Matt Bohlsen on SeekingAlpha, who continues to diligently track the entire EV suite of metals, and apparently has access to recent available data:

“During December, 99.5% lithium carbonate China spot prices were up 6.4%. Lithium hydroxide prices were up 0.74%. Spodumene (6% min) prices were up 0.21%. Fastmarkets (formerly Metal Bulletin) reports 99.5% lithium carbonate battery grade spot midpoint prices cif China, Japan & Korea of US$6.75/kg (US$6,750/t), and min 56.5% lithium hydroxide battery grade spot midpoint prices cif China, Japan & Korea of US$9.00/kg (US$9,000/t). Benchmark Mineral Intelligence has November global weighted average prices at US$5,700/t for Li carbonate, US$8,837/t for Li hydroxide, and US$380/t for spodumene (6%).”

The trend for lithium products finally seems to have bottomed. This cannot be observed in this latest chart coming from Fastmarkets (paid for link, chart provided by author Bohlsen on SeekingAlpha.com):

 

but when looking more into detail as Bohlsen does, all product prices are going up recently:

For the long term I have seen market scenarios contemplating US$9,000–10,000/t LCE, which is a price more than half the current development projects need in order to be economic, including, in my view, Standard Lithium, but we aren’t there yet. Therefore, I again reworked the lithium sensitivity, where three scenarios are presented, the 20.9kt LCE pa (per annum) base case, and the hypothetical 30kt LCE pa expansion scenarios as I calculated them in my first article on the company:

Afbeelding met tafel

Automatisch gegenereerde beschrijving

A current US$6,200/t LCE price, which is roughly a midpoint of Fastmarkets and BMI estimates, would generate a hypothetical NPV8 of below zero, and a hypothetical post-tax IRR of 5.2–7.3%, which would render the project not economic, as lithium projects usually need an internal rate of return (IRR) of at the very least 20%. This is something Mintak will address further along this article. As a reminder, these figures are based on 100% project ownership economics, and Lanxess is committed to provide project finance to the JV when testing and the preliminary feasibility study (PFS) are successful in their view, and Standard will probably be an estimated 30% JV partner. As I am curious about the current state of affairs, especially the status of the PFS, I prepared several questions for Mintak, some are softballs, others curveballs, some fastballs, here we go.

4. Interview with CEO Robert Mintak

The Critical Investor (TCI): Congratulations with the closing of this financing, very impressive. Could you tell the audience how you found BNP Paribas, and are there other new big insto names coming into the story as well, although in that case you are not at liberty to disclose their names? I love the fact BNP didn’t need warrants, but why did you have to do a short form offering without a holding period, was it either warrants or a holding period, and you chose to avoid dilution?

Robert Mintak (RM): While the company has a strong core group of investors that has funded the company when required over the past four years, it has always been our objective to broaden our institutional shareholder base. The recently closed financing was the result of a significant amount of outreach work over the past six months. U.S.-based Roth Capital Partners, which has covered Standard for several years now, approached us with a brokered offering in early December that aligned with our capital requirements and investor objectives. A short form prospectus offering with no warrant that targeted institutional investors would be the most well received. Echelon Wealth Partners came on as co-lead and both did a terrific job. The financing was well oversubscribed, and we are very happy to have added BNP Paribas ESG focused New Energy Transition Fund as a significant shareholder of the company.

TCI: With this kind of cash on hand, Standard Lithium should be positioned well in order to complete optimization of demonstration/pilot plants and the resulting PFS. I have several questions regarding these subjects. First of all I noticed the news release of December 3, 2020, announcing the successful completion of the start-to-finish proof of concept of the proprietary lithium processing technology: “The culmination of the proof-of-concept was to convert and crystallise the LiCl solution produced by the Company’s first-of-its-kind Direct Lithium Extraction (DLE) Demonstration Plant.” I wasn’t really aware of the need for the conversion of LiCl into battery quality (or even better quality according to the news release) lithium carbonate, in my view this was an option. Focus of attention has always been, as far as I know, the LiSTR DLE Demonstration Plant, which had to produce verification data for the PFS. Could you elaborate on this news release, and the current strategy of Standard in this regard?

RM: You are correct in that the LiSTR direct extraction technology is the key to unlock the globally significant Smackover lithium resource, and the successful performance of the LiSTR Demonstration Plant is of course paramount, there would be no project without the extractive technology. The LiSTR technology extracts lithium from the Smackover brine in a modern, environmentally friendly and scalable way. The output from the extraction process is lithium chloride, LiCl. Basically, the same output as the evaporative process. The conversion of the LiCl produced by the LiSTR process to a battery quality lithium carbonate is the broader proof of concept of an integrated lithium chemical project.

TCI: As the 99.9% battery quality lithium carbonate production was achieved on a pilot plant scale, it seems the SiFT system is successful. As you just mentioned, a conventional crystallization plant will be the main strategy, does this mean the SiFT system is likely to be integrated at a later stage, assuming it will still be useful?

RM: I will point everyone to our news release on Sept 9th, 2020, that highlights the Dual Track Program we are undertaking for the conversion of lithium chloride to lithium carbonate. 1. Using an existing conventional OEM process and 2. Utilizing our proprietary SiFT process. Any initial commercial production would utilize an OEM supplied conventional carbonation plant, the SiFT process will continue to be de-risked and proven out for commercial success with a target to be deployed in subsequent stages of the projects development to address the higher purity requirements of next generation batteries.

TCI: The news release further mentioned, “a further concentration using industry-standard reverse osmosis technology” before the LiCl concentrate was converted at the SiFt pilot plant in BC, Canada. Does this mean this is an additional step that will be outsourced in the future, or are you planning on integrating this in the Lanxess project when going into construction?

RM: Nothing will be outsourced. The work that is being done today at different campuses would all be done at the same commercial project location. The concentration of LiCl using an R.O. technology is part of our flow sheet. The R.O. process is a cost-effective step to produce high purity LiCl with optimal concentration for conversion to lithium carbonate.

TCI: Some of the interesting aspects of the LiSTR plant are: it produces lithium chloride (LiCl) directly from un-concentrated raw brine; it reduces recovery time from months to less than a day, and it vastly increases recovery efficiencies to as much as >90%. I was wondering if these objectives are already achieved, or what the status is on each of them as far as you can disclose?

RM: I can only comment on aspects that have been released to the market. What I can state is that we are very happy with the results to date.

TCI: An even more important subject for me is costs as you know, indicating if the recovery process is economically viable at a certain lithium carbonate price or not. I realize this is material information, and we have been discussing optimization in order to lower the PEA base case price for lithium products, but I am still wondering if you could state something in terms of achievements or developing trends?

RM: The purpose of our LiSTR demonstration plant is to prove technical scale up validation, economic process validation and test ways for optimization. Chemical reagents make up 70% of the opex as reported in our PEA, reagent optimization is of course something we are working at improving. I will also highlight the scale of our demonstration plant; 1/60th commercial scale. That may sound small but compare that to any of our peers that operate pilot plants that are typically 1/500th to 1/1000th commercial in size.

TCI: As we have discussed earlier, the PEA uses very high base case pricing for LCE (non-battery quality). Your reaction to the low Chinese spot prices was it wasn’t the correct pricing reported, and we should look at Japanese/Korean prices, which hover around US$9–10k/t LCE. Why is there such a difference in prices between these countries?

RM: Regarding price levels: I strongly believe lithium carbonate prices will return to prices above $13,000 USD per tonne after 2023. It is important to also consider the importance of localizing supply of raw materials. COVID has taught us a lot about localizing supply chains, there are also geopolitical considerations and legislative policies that will further define pricing. Look at the USMCA, the United States, Mexico, Canada trade agreement for automobiles. In order for vehicles to qualify, these require 70% domestically North America sourced materials, or suffer from tariffs. From a global perspective, virtually every large car maker has begun making investments and allocating budgets to enter the EV space. The lack of investment in the upstream supply chain for critical minerals will come at a price, a higher price for battery materials.

TCI: Something else. I noticed that you wouldn’t confine yourself to the Lanxess/Arkansas bromine brine feed, but would like to be able to process different brines. How does this work, would you like to review options to export the technology and do JVs with current brine producers worldwide, or is this way too early to contemplate, as the IP is simply owned by the JV in the current Lanxess partnership, and any decision on this will be a joint decision?

RM: The Smackover brine in south Arkansas and to a greater extent the Gulf region is a globally significant resource. Initial commercial production from post bromine extraction tailbrine gets the project up and running quickly compared to any of our peers followed by expansion and decoupling from the bromine tail brine moving westwards across the production fairway. The Smackover brines have the potential to be the Permian Basin of lithium. Our attention will be focused on the lowest hanging fruit and working in the best possible jurisdiction to build a lithium chemical business.

TCI: Going a bit further on IP, it is my understanding that the patents for the LiSTR demonstration plant are still pending. Could you give us an indication when these patents will be granted? Is this in any way a threshold for a potential JV with Lanxess?

RM: The full application of the LiSTR patents was filed in 2018/19 and for multiple countries as required. I really can’t say much on timelines as that is outside of my control. I don’t expect it to be a roadblock for the JV negotiations.

TCI: In case a JV is initiated and finalized with Lanxess, they will be building the project. You have indicated you will be looking at further opportunities, to grow the resource as useful brine runs under the surface for hundreds of miles. How could you monetize an expanding resource, is Lanxess providing expansion capex and returning increased cash flow, how does this work?

RM: I cannot comment on anything that has not been announced or finalized and I can never speak on behalf of our partners. We have been very careful to avoid the problems the industry has faced with developers and even existing producers promising and not delivering. What I will say and I am repeating myself, the Smackover brines are a globally significant lithium resource that, with the application of the appropriate extractive technology and a responsible development strategy, offer an unparalleled business opportunity.

TCI: We have come to an end of this interview. Do you have anything else to add for the audience?

RM: After several false starts, the tens of billions of dollars committed and billions invested by auto OEMs, the legislative policy implementations by governments across the global and a broader acceptance of EVs by consumers will make 2021 an inflection point in the lithium industry. The timing could not be better for Standard Lithium. We are well funded, have a terrific project partner and we are working in the absolute best place to build a fully integrated lithium project anywhere on the planet. It is going to be an exciting year; we are just getting started.

5. Conclusion

Despite COVID-19 going into its second wave, Standard Lithium raised another C$34.5 million, and arrived at the endgame of their optimization process, and according to CEO Mintak, is already into discussions with Lanxess about the intended JV. Lithium product prices finally seem to have turned the corner in conjunction, so the timing is impeccable, combined with Tesla and recovered China car demand, rocking the EV markets and everything connected to it. As a result, the share price of Standard Lithium is going through the roof, although it isn’t exactly clear how to value the company and its project at this point, due to unknown actual cost profiles and opaque lithium contract pricing.

If Mintak is correct and a healthy Japanese/Korean US$10k/t can be used for battery quality lithium carbonate, the Lanxess project is economically viable at the moment if the LiSTR plant opex profile follows specifications laid out in the PEA.

For now, Standard has gathered the data to underpin production costs. It remains to be seen if Lanxess will just finalize a JV or simply could buy Standard Lithium outright, as it would own all IP as well in that case. Either way, it seems Standard Lithium is positioned well these days.

Afbeelding met buiten, grond, natuur, gras

Automatisch gegenereerde beschrijving

I hope you will find this article interesting and useful, and will have further interest in my upcoming articles on mining. To never miss a thing, please subscribe to my free newsletter on my website www.criticalinvestor.eu, and follow me on Seekingalpha.com, in order to get an email notice of my new articles soon after they are published.

The Critical Investor is a newsletter and comprehensive junior mining platform, providing analysis, blog and newsfeed and all sorts of information about junior mining. The editor is an avid and critical junior mining stock investor from The Netherlands, with an MSc background in construction/project management. Number cruncher at project economics, looking for high quality companies, mostly growth/turnaround/catalyst-driven to avoid too much dependence/influence of long-term commodity pricing/market sentiments, and often looking for long-term deep value. Getting burned in the past himself at junior mining investments by following overly positive sources that more often than not avoided to mention (hidden) risks or critical flaws, The Critical Investor learned his lesson well, and goes a few steps further ever since, providing a fresh, more in-depth, and critical vision on things, hence the name.

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Source: The Critical Investor for Streetwise Reports   01/18/2021

The Critical Investor takes a look at recent developments at Standard Lithium and speaks with CEO Robert Mintak.

1. Introduction

Despite COVID-19 gearing up for a second wave, Standard Lithium Ltd. (SLL:TSX.V; STLHF:OTCQX) continues to raise money in very significant quantities for a typical lithium developer. I continue to be impressed by CEO Robert Mintak, who raised C$34.5 million in December of last year, after completing a heavily oversubscribed C$12.1 million round in February of that same year. Although COVID-19 is feared to have an impact on real world economics again, optimism seems to vaporize these sentiments quickly, fueled by a US$900 billion stimulus package signed by Trump at the last minute on December 27, 2020, and maybe even more importantly, two authorized vaccines, being allocated to frontline health care workers worldwide at the moment, and later on to the general public.

Adding to this is the recovery of the Chinese economy, which seems to be immune to second pandemic waves that are sending many countries into lockdown again and is ramping up production and commodity imports to pre-COVID levels, and by doing so seems to function as a kickstarter of the world economy. Following this news were extremely high PMI figures coming in very recently from Europe, indicating strong future recovery sentiments triumphing current lockdown fallouts. I am still amazed by the ongoing disconnection of real world economics and stock markets, as many companies are at the brink of bankruptcy and massive lay-offs, identifying the K-type recovery of stock markets, sending selected stocks to unimagined and unprecedented highs (Amazon and numerous other internet/delivery companies), while others go down the drain (for example, airlines).The remarkable news flow sent stock markets across the globe to multiyear and sometimes all-time highs, and regained enthusiasm for anything electric vehicle (EV) related. Tesla boss Elon Musk declared he was going after his own lithium projects last year, and among other things called for nickel contracts. Besides this, as Tesla performed well and locked in five quarters of profits, its share price went through the roof.

This all fueled a craze in lithium stocks in the fourth quarter of last year, with supply showing signs of tightening after several years of oversupply and the resulting low lithium product pricing in both spot pricing and contract pricing. A quick clarification: contract pricing is the actual price industrial scale off-takers are paying to industrial scale mining companies for large amounts of lithium products, but the pricing is very hard to track, and spot pricing is the price smaller off-take parties pay to small scale producers, but which is better to track for market watchers like Fastmarkets, Asian Metals and Benchmark Minerals. As with uranium, another opaque market handling spot and contract prices, Standard Lithium benefitted handsomely as well from the renewed EV interest almost singlehandedly generated by Tesla, as can be seen in its chart:

     
Share price 1 year timeframe; Source tmxmoney.com

I must say CEO Robert Mintak has a sixth sense for timing of financings related to COVID-19 outbreaks, as the first raise was closed right before the first wave, and the current one right before the second wave. As it seems Standard Lithium is cashed up now to complete and optimize both the already functional and lithium products producing LiSTR and SiFT demonstraton (pilot) plants, it definitely was time to catch up with Mintak about the current state of affairs.

All presented tables are my own material, unless stated otherwise.

All pictures are company material, unless stated otherwise.

All currencies are in US Dollars, unless stated otherwise

2. Financing

Standard Lithium recently announced the closing of the aforementioned C$34.5 million public offering, at a price of C$2.20 with no warrants, which was impressive to say the least, as no lithium junior comes even close. As it was a short form prospectus, there is no holding period, but this didn't keep the share price from exploding higher. It never dropped to C$2.20 levels after announcing the closing news, which really is a sign of strength. On the contrary, existing warrant holders exercised their warrants to the tune of C$5.5 million since October 1, 2020, so the company added about C$40 million to the treasury since then.

The net proceeds from the offering will be used to fund ongoing work programs like ongoing testing and optimization work at the SiFT lithium carbonate crystallization pilot plant and the LiSTR Direct Lithium Extraction demonstration plant, preliminary engineering work to advance commercial development of the proprietary lithium extraction process, negotiation and development of a joint venture with LANXESS, and for working capital and general corporate purposes. CEO Mintak was particularly happy to welcome BNP Paribas Energy Transition Fund, which did extensive due diligence before coming on board. It seems everything is back on track and going smoothly after COVID-19 caused delays in execution over the summer. Even the lithium product prices seem to have just turned a corner, let's have a quick look for an update in this department first.

3. Lithium product pricing update

I usually use three sources to determine the current state of affairs with lithium product pricing. These are:

1. Presentation of Lithium Americas, an advanced lithium developer that usually has one or more useful charts on pricing developments to show for:

Please note the significantly higher pricing out of Japan and Korea, as opposed to China, that are leading at the moment for spot prices.

2. Sale prices of Orocobre, an actual lithium carbonate producer, which can be found in its financials (it also has very interesting further information regarding lithium market fundamentals on its website, which is recommended reading material). The H1 FY2020 sales price was US$6,157/t FOB, and the expected Q3 FY2020 sales price was US$5,000/t FOB. However, the realized sales price was just US$3,102/t FOB. Sales volumes were approximately 22% battery grade lithium carbonate and the remainder primary grade lithium carbonate.

3. The monthly update for lithium product pricing and status of lithium developers/explorers, written by fellow writer Matt Bohlsen on SeekingAlpha, who continues to diligently track the entire EV suite of metals, and apparently has access to recent available data:

"During December, 99.5% lithium carbonate China spot prices were up 6.4%. Lithium hydroxide prices were up 0.74%. Spodumene (6% min) prices were up 0.21%. Fastmarkets (formerly Metal Bulletin) reports 99.5% lithium carbonate battery grade spot midpoint prices cif China, Japan & Korea of US$6.75/kg (US$6,750/t), and min 56.5% lithium hydroxide battery grade spot midpoint prices cif China, Japan & Korea of US$9.00/kg (US$9,000/t). Benchmark Mineral Intelligence has November global weighted average prices at US$5,700/t for Li carbonate, US$8,837/t for Li hydroxide, and US$380/t for spodumene (6%)."

The trend for lithium products finally seems to have bottomed. This cannot be observed in this latest chart coming from Fastmarkets (paid for link, chart provided by author Bohlsen on SeekingAlpha.com):

 

but when looking more into detail as Bohlsen does, all product prices are going up recently:

For the long term I have seen market scenarios contemplating US$9,000–10,000/t LCE, which is a price more than half the current development projects need in order to be economic, including, in my view, Standard Lithium, but we aren't there yet. Therefore, I again reworked the lithium sensitivity, where three scenarios are presented, the 20.9kt LCE pa (per annum) base case, and the hypothetical 30kt LCE pa expansion scenarios as I calculated them in my first article on the company:

Afbeelding met tafel

Automatisch gegenereerde beschrijving

A current US$6,200/t LCE price, which is roughly a midpoint of Fastmarkets and BMI estimates, would generate a hypothetical NPV8 of below zero, and a hypothetical post-tax IRR of 5.2–7.3%, which would render the project not economic, as lithium projects usually need an internal rate of return (IRR) of at the very least 20%. This is something Mintak will address further along this article. As a reminder, these figures are based on 100% project ownership economics, and Lanxess is committed to provide project finance to the JV when testing and the preliminary feasibility study (PFS) are successful in their view, and Standard will probably be an estimated 30% JV partner. As I am curious about the current state of affairs, especially the status of the PFS, I prepared several questions for Mintak, some are softballs, others curveballs, some fastballs, here we go.

4. Interview with CEO Robert Mintak

The Critical Investor (TCI): Congratulations with the closing of this financing, very impressive. Could you tell the audience how you found BNP Paribas, and are there other new big insto names coming into the story as well, although in that case you are not at liberty to disclose their names? I love the fact BNP didn't need warrants, but why did you have to do a short form offering without a holding period, was it either warrants or a holding period, and you chose to avoid dilution?

Robert Mintak (RM): While the company has a strong core group of investors that has funded the company when required over the past four years, it has always been our objective to broaden our institutional shareholder base. The recently closed financing was the result of a significant amount of outreach work over the past six months. U.S.-based Roth Capital Partners, which has covered Standard for several years now, approached us with a brokered offering in early December that aligned with our capital requirements and investor objectives. A short form prospectus offering with no warrant that targeted institutional investors would be the most well received. Echelon Wealth Partners came on as co-lead and both did a terrific job. The financing was well oversubscribed, and we are very happy to have added BNP Paribas ESG focused New Energy Transition Fund as a significant shareholder of the company.

TCI: With this kind of cash on hand, Standard Lithium should be positioned well in order to complete optimization of demonstration/pilot plants and the resulting PFS. I have several questions regarding these subjects. First of all I noticed the news release of December 3, 2020, announcing the successful completion of the start-to-finish proof of concept of the proprietary lithium processing technology: "The culmination of the proof-of-concept was to convert and crystallise the LiCl solution produced by the Company's first-of-its-kind Direct Lithium Extraction (DLE) Demonstration Plant." I wasn't really aware of the need for the conversion of LiCl into battery quality (or even better quality according to the news release) lithium carbonate, in my view this was an option. Focus of attention has always been, as far as I know, the LiSTR DLE Demonstration Plant, which had to produce verification data for the PFS. Could you elaborate on this news release, and the current strategy of Standard in this regard?

RM: You are correct in that the LiSTR direct extraction technology is the key to unlock the globally significant Smackover lithium resource, and the successful performance of the LiSTR Demonstration Plant is of course paramount, there would be no project without the extractive technology. The LiSTR technology extracts lithium from the Smackover brine in a modern, environmentally friendly and scalable way. The output from the extraction process is lithium chloride, LiCl. Basically, the same output as the evaporative process. The conversion of the LiCl produced by the LiSTR process to a battery quality lithium carbonate is the broader proof of concept of an integrated lithium chemical project.

TCI: As the 99.9% battery quality lithium carbonate production was achieved on a pilot plant scale, it seems the SiFT system is successful. As you just mentioned, a conventional crystallization plant will be the main strategy, does this mean the SiFT system is likely to be integrated at a later stage, assuming it will still be useful?

RM: I will point everyone to our news release on Sept 9th, 2020, that highlights the Dual Track Program we are undertaking for the conversion of lithium chloride to lithium carbonate. 1. Using an existing conventional OEM process and 2. Utilizing our proprietary SiFT process. Any initial commercial production would utilize an OEM supplied conventional carbonation plant, the SiFT process will continue to be de-risked and proven out for commercial success with a target to be deployed in subsequent stages of the projects development to address the higher purity requirements of next generation batteries.

TCI: The news release further mentioned, "a further concentration using industry-standard reverse osmosis technology" before the LiCl concentrate was converted at the SiFt pilot plant in BC, Canada. Does this mean this is an additional step that will be outsourced in the future, or are you planning on integrating this in the Lanxess project when going into construction?

RM: Nothing will be outsourced. The work that is being done today at different campuses would all be done at the same commercial project location. The concentration of LiCl using an R.O. technology is part of our flow sheet. The R.O. process is a cost-effective step to produce high purity LiCl with optimal concentration for conversion to lithium carbonate.

TCI: Some of the interesting aspects of the LiSTR plant are: it produces lithium chloride (LiCl) directly from un-concentrated raw brine; it reduces recovery time from months to less than a day, and it vastly increases recovery efficiencies to as much as >90%. I was wondering if these objectives are already achieved, or what the status is on each of them as far as you can disclose?

RM: I can only comment on aspects that have been released to the market. What I can state is that we are very happy with the results to date.

TCI: An even more important subject for me is costs as you know, indicating if the recovery process is economically viable at a certain lithium carbonate price or not. I realize this is material information, and we have been discussing optimization in order to lower the PEA base case price for lithium products, but I am still wondering if you could state something in terms of achievements or developing trends?

RM: The purpose of our LiSTR demonstration plant is to prove technical scale up validation, economic process validation and test ways for optimization. Chemical reagents make up 70% of the opex as reported in our PEA, reagent optimization is of course something we are working at improving. I will also highlight the scale of our demonstration plant; 1/60th commercial scale. That may sound small but compare that to any of our peers that operate pilot plants that are typically 1/500th to 1/1000th commercial in size.

TCI: As we have discussed earlier, the PEA uses very high base case pricing for LCE (non-battery quality). Your reaction to the low Chinese spot prices was it wasn't the correct pricing reported, and we should look at Japanese/Korean prices, which hover around US$9–10k/t LCE. Why is there such a difference in prices between these countries?

RM: Regarding price levels: I strongly believe lithium carbonate prices will return to prices above $13,000 USD per tonne after 2023. It is important to also consider the importance of localizing supply of raw materials. COVID has taught us a lot about localizing supply chains, there are also geopolitical considerations and legislative policies that will further define pricing. Look at the USMCA, the United States, Mexico, Canada trade agreement for automobiles. In order for vehicles to qualify, these require 70% domestically North America sourced materials, or suffer from tariffs. From a global perspective, virtually every large car maker has begun making investments and allocating budgets to enter the EV space. The lack of investment in the upstream supply chain for critical minerals will come at a price, a higher price for battery materials.

TCI: Something else. I noticed that you wouldn't confine yourself to the Lanxess/Arkansas bromine brine feed, but would like to be able to process different brines. How does this work, would you like to review options to export the technology and do JVs with current brine producers worldwide, or is this way too early to contemplate, as the IP is simply owned by the JV in the current Lanxess partnership, and any decision on this will be a joint decision?

RM: The Smackover brine in south Arkansas and to a greater extent the Gulf region is a globally significant resource. Initial commercial production from post bromine extraction tailbrine gets the project up and running quickly compared to any of our peers followed by expansion and decoupling from the bromine tail brine moving westwards across the production fairway. The Smackover brines have the potential to be the Permian Basin of lithium. Our attention will be focused on the lowest hanging fruit and working in the best possible jurisdiction to build a lithium chemical business.

TCI: Going a bit further on IP, it is my understanding that the patents for the LiSTR demonstration plant are still pending. Could you give us an indication when these patents will be granted? Is this in any way a threshold for a potential JV with Lanxess?

RM: The full application of the LiSTR patents was filed in 2018/19 and for multiple countries as required. I really can't say much on timelines as that is outside of my control. I don't expect it to be a roadblock for the JV negotiations.

TCI: In case a JV is initiated and finalized with Lanxess, they will be building the project. You have indicated you will be looking at further opportunities, to grow the resource as useful brine runs under the surface for hundreds of miles. How could you monetize an expanding resource, is Lanxess providing expansion capex and returning increased cash flow, how does this work?

RM: I cannot comment on anything that has not been announced or finalized and I can never speak on behalf of our partners. We have been very careful to avoid the problems the industry has faced with developers and even existing producers promising and not delivering. What I will say and I am repeating myself, the Smackover brines are a globally significant lithium resource that, with the application of the appropriate extractive technology and a responsible development strategy, offer an unparalleled business opportunity.


TCI: We have come to an end of this interview. Do you have anything else to add for the audience?

RM: After several false starts, the tens of billions of dollars committed and billions invested by auto OEMs, the legislative policy implementations by governments across the global and a broader acceptance of EVs by consumers will make 2021 an inflection point in the lithium industry. The timing could not be better for Standard Lithium. We are well funded, have a terrific project partner and we are working in the absolute best place to build a fully integrated lithium project anywhere on the planet. It is going to be an exciting year; we are just getting started.

5. Conclusion

Despite COVID-19 going into its second wave, Standard Lithium raised another C$34.5 million, and arrived at the endgame of their optimization process, and according to CEO Mintak, is already into discussions with Lanxess about the intended JV. Lithium product prices finally seem to have turned the corner in conjunction, so the timing is impeccable, combined with Tesla and recovered China car demand, rocking the EV markets and everything connected to it. As a result, the share price of Standard Lithium is going through the roof, although it isn't exactly clear how to value the company and its project at this point, due to unknown actual cost profiles and opaque lithium contract pricing.

If Mintak is correct and a healthy Japanese/Korean US$10k/t can be used for battery quality lithium carbonate, the Lanxess project is economically viable at the moment if the LiSTR plant opex profile follows specifications laid out in the PEA.

For now, Standard has gathered the data to underpin production costs. It remains to be seen if Lanxess will just finalize a JV or simply could buy Standard Lithium outright, as it would own all IP as well in that case. Either way, it seems Standard Lithium is positioned well these days.

Afbeelding met buiten, grond, natuur, gras

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The Critical Investor is a newsletter and comprehensive junior mining platform, providing analysis, blog and newsfeed and all sorts of information about junior mining. The editor is an avid and critical junior mining stock investor from The Netherlands, with an MSc background in construction/project management. Number cruncher at project economics, looking for high quality companies, mostly growth/turnaround/catalyst-driven to avoid too much dependence/influence of long-term commodity pricing/market sentiments, and often looking for long-term deep value. Getting burned in the past himself at junior mining investments by following overly positive sources that more often than not avoided to mention (hidden) risks or critical flaws, The Critical Investor learned his lesson well, and goes a few steps further ever since, providing a fresh, more in-depth, and critical vision on things, hence the name.

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Disclaimer: The author is not a registered investment advisor, and currently has a long position in this stock. Standard Lithium is a sponsoring company. All facts are to be checked by the reader. For more information go to www.standardlithium.com and read the company's profile and official documents on www.sedar.com, also for important risk disclosures. This article is provided for information purposes only, and is not intended to be investment advice of any kind, and all readers are encouraged to do their own due diligence, and talk to their own licensed investment advisors prior to making any investment decisions.

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Lithium Americas’ Shares Charge 18% Higher after Firm Receives ROD for Nevada Lithium Project

Source: Streetwise Reports   01/18/2021

Shares of Lithium Americas Corp. established a new 52-week high after the firm reported it received a Record of Decision from the U.S. Bureau of Land Management for its Thacker Pass L…

Source: Streetwise Reports   01/18/2021

Shares of Lithium Americas Corp. established a new 52-week high after the firm reported it received a Record of Decision from the U.S. Bureau of Land Management for its Thacker Pass Lithium Project.

Resource development company Lithium Americas Corp. (LAC:TSX; LAC:NYSE) announced that "the United States Bureau of Land Management (BLM) has issued the Record of Decision (ROD) for the Thacker Pass lithium project following completion of the National Environmental Policy Act (NEPA) process."

The firm stated that the Thacker Pass Project is located in Humboldt County, Nevada, and is owned 100% by Lithium Nevada Corp., a wholly owned U.S. incorporated subsidiary of Lithium Americas. The Thacker Pass Project is a prefeasibility stage open-pit lithium project situated near the southern end of the McDermitt Caldera Margin and is located about 100 km northwest of Winnemucca, Nev. The firm noted on its website that in 2018, a prefeasibility study (PFS) for a two phase project was released that outlined production capacity designed to reach 60,000 tpa of battery-grade lithium carbonate (Li2CO3), mineral reserves of 3.1 million tonnes of lithium carbonate equivalent (LCE) at 3,283 ppm Li and a 46 year mine life.

Lithium Americas Corp.' President and CEO Jon Evans remarked, "The issuance of the ROD is the culmination of over 10 years of hard work from the Thacker Pass team, as well as the BLM and other federal, state and local agencies, all of whom worked tirelessly to ensure their respective commitments to environmental stewardship and community engagement...With the federal permitting process complete, our focus is on advancing the financing process including discussions with potential strategic partners."

The company stated that it believes that receiving the ROD represents a very significant milestone in the Thacker Pass Project's permitting process and ongoing development efforts. The firm mentioned that later this year it expects to obtain the results for key state permits and water rights transfers applications which it stated it has already filed.

Lithium Americas Corp. is a lithium-focused development-stage resource company headquartered in Vancouver, Canada. The firm is presently developing two large lithium projects, the Cauchari-Olaroz project situated in the Jujuy province of Argentina and the Thacker Pass lithium project in northwestern Nevada.

Lithium Americas Corp. has a market capitalization of around CA$2.75 billion with approximately 105.4 million shares outstanding. LAC.TO shares opened 7.5% higher today at CA$28.06 (+CA$1.95, +7.47%) over Friday's CA$26.11 closing price and reached a new 52-week high this morning of CA$31.81. The stock has traded today between CA$28.06 and CA$31.81 per share and is currently trading at CA$30.81 (+CA$4.70, +18.00%).

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Disclosure:
1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Lithium Americas, a company mentioned in this article.

( Companies Mentioned: LAC:TSX; LAC:NYSE, )

Top Pick U.S.-Based Uranium Producer/Developer Offers ‘Maximum Upside Exposure’

Source: Streetwise Reports   01/14/2021

The key reasons Uranium Energy warrants Top Pick status and makes a compelling investment are presented in a Haywood Capital Markets report.

In a Jan. 12 research note, analyst Colin Healey reported that Uranium Energy Corp. (UEC:NYSE.MKT) ranks among Haywood Capital Markets’ Top Picks for 2021 and is “perfectly positioned to leverage both macro and domestic catalysts.”

“UEC has production ready-assets within reach of its South Texas Hobson central processing plant and its Reno Creek project is fully permitted/construction ready, creating a pathway to 4 Mlb U3O8/year of near-term production once the uranium price incentivizes,” Healey stated.

He noted that UEC has multiple deposits with “relatively low capex hurdles, near-ready to feed the plant.”

“With over 19 million pounds (19 Mlb) of U3O8 in all categories’ resources defined (>85% fully permitted) across the Texas in situ recovery assets and plenty of unexplored, but highly prospective, acreage, Uranium Energy is well positioned to generate near-term cash flow in the right environment,” wrote Healey.

The company’s asset portfolio includes Reno Creek project, which is considered the “largest permitted, pre-construction ISR project in the U.S., with approximately 27.5 Mlb U3O8 in all-categories resources (95% Measured and Indicated).” Uranium Energy is now preparing a prefeasibility study “to demonstrate the economic case.”

Uranium Energy offers potential upside in the way of exploration given its pipeline of hardrock uranium and vanadium assets in three countries, Healey wrote. They are its development-stage assets in the U.S., an exploration-stage project in the Athabasca Basin and “exploration/development assets in Paraguay that includes titanium exposure at the Alto Parana project.”

In addition, “the company’s low-cost, in situ recovery portfolio and all-in resource of 104 Mlb U3O8 are completely unhedged, allowing for maximum exposure upside exposure to rising uranium prices,” Healey indicated.

Uranium Energy is in a strong financial position, Healey noted, having $16.7 million in cash at year-end 2020 and “further agility once the market conditions justify a restart.” Last fall, the company garnered $15 million in gross proceeds through a public offering upsized from $8 million.

“With the uranium sector facing the best fundamental backdrop we’ve seen in the post-Fukushima ear, and the U.S. making significant progress to revive its domestic nuclear industry, we recommend buying UEC to gain exposure to this two-pronged bullish outlook,” Healey concluded. “UEC has production-ready assets within reach of its South Texas CPP and could rapidly respond to an improving uranium price.”

Along with a Buy recommendation, Haywood has a $2.60 per share target price on Uranium Energy, the stock of which is currently trading at about $2.01 per share.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Uranium Energy Corp., a company mentioned in this article.

Disclosures from Haywood Securities, Uranium Energy Corp., January 12, 2021

Analyst Certification: I, Colin Healey, hereby certify that the views expressed in this report (which includes the rating assigned to the issuer’s shares as well as the analytical substance and tone of the report) accurately reflect my/our personal views about the subject securities and the issuer. No part of my/our compensation was, is, or will be directly or indirectly related to the specific recommendations.

Important Disclosures

The following Important Disclosures apply for Uranium Energy Corp.:

▪ Haywood Securities, Inc. has reviewed lead projects of Uranium Energy Corp. and a portion of the expenses for this travel have been reimbursed by the issuer.
▪ Haywood Securities Inc. or one of its subsidiaries has managed or co-managed or participated as selling group in a public offering of securities for Uranium Energy Corp. in the past 12 months.

Research policy available here.

( Companies Mentioned: UEC:NYSE.MKT,
)

Source: Streetwise Reports   01/14/2021

The key reasons Uranium Energy warrants Top Pick status and makes a compelling investment are presented in a Haywood Capital Markets report.

In a Jan. 12 research note, analyst Colin Healey reported that Uranium Energy Corp. (UEC:NYSE.MKT) ranks among Haywood Capital Markets' Top Picks for 2021 and is "perfectly positioned to leverage both macro and domestic catalysts."

"UEC has production ready-assets within reach of its South Texas Hobson central processing plant and its Reno Creek project is fully permitted/construction ready, creating a pathway to 4 Mlb U3O8/year of near-term production once the uranium price incentivizes," Healey stated.

He noted that UEC has multiple deposits with "relatively low capex hurdles, near-ready to feed the plant."

"With over 19 million pounds (19 Mlb) of U3O8 in all categories' resources defined (>85% fully permitted) across the Texas in situ recovery assets and plenty of unexplored, but highly prospective, acreage, Uranium Energy is well positioned to generate near-term cash flow in the right environment," wrote Healey.

The company's asset portfolio includes Reno Creek project, which is considered the "largest permitted, pre-construction ISR project in the U.S., with approximately 27.5 Mlb U3O8 in all-categories resources (95% Measured and Indicated)." Uranium Energy is now preparing a prefeasibility study "to demonstrate the economic case."

Uranium Energy offers potential upside in the way of exploration given its pipeline of hardrock uranium and vanadium assets in three countries, Healey wrote. They are its development-stage assets in the U.S., an exploration-stage project in the Athabasca Basin and "exploration/development assets in Paraguay that includes titanium exposure at the Alto Parana project."

In addition, "the company's low-cost, in situ recovery portfolio and all-in resource of 104 Mlb U3O8 are completely unhedged, allowing for maximum exposure upside exposure to rising uranium prices," Healey indicated.

Uranium Energy is in a strong financial position, Healey noted, having $16.7 million in cash at year-end 2020 and "further agility once the market conditions justify a restart." Last fall, the company garnered $15 million in gross proceeds through a public offering upsized from $8 million.

"With the uranium sector facing the best fundamental backdrop we've seen in the post-Fukushima ear, and the U.S. making significant progress to revive its domestic nuclear industry, we recommend buying UEC to gain exposure to this two-pronged bullish outlook," Healey concluded. "UEC has production-ready assets within reach of its South Texas CPP and could rapidly respond to an improving uranium price."

Along with a Buy recommendation, Haywood has a $2.60 per share target price on Uranium Energy, the stock of which is currently trading at about $2.01 per share.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Uranium Energy Corp., a company mentioned in this article.

Disclosures from Haywood Securities, Uranium Energy Corp., January 12, 2021

Analyst Certification: I, Colin Healey, hereby certify that the views expressed in this report (which includes the rating assigned to the issuer’s shares as well as the analytical substance and tone of the report) accurately reflect my/our personal views about the subject securities and the issuer. No part of my/our compensation was, is, or will be directly or indirectly related to the specific recommendations.

Important Disclosures
The following Important Disclosures apply for Uranium Energy Corp.: ▪ Haywood Securities, Inc. has reviewed lead projects of Uranium Energy Corp. and a portion of the expenses for this travel have been reimbursed by the issuer. ▪ Haywood Securities Inc. or one of its subsidiaries has managed or co-managed or participated as selling group in a public offering of securities for Uranium Energy Corp. in the past 12 months.

Research policy available here.

( Companies Mentioned: UEC:NYSE.MKT, )

Junior Achieves De-Risking ‘Milestone’ as Cobalt Prices Rebound

Source: Peter Epstein for Streetwise Reports   01/13/2021

Peter Epstein of Epstein Research calls First Cobalt Corp.’s agreements with major firms to deliver feedstock “a major vote of confidence.”

On Jan. 12, First Cobalt Corp. (FCC:TSX.V; FTSSF:OTCQX; FCC:ASX) announced two critical long-term (five-year) cobalt hydroxide feedstock arrangements with Glencore International Plc (GLEN:LSE) and IXM SA (a subsidiary of CMOC).

Combined, the agreements call for the supply of 4,500 tonnes of contained cobalt/year, starting in Q4/2022. Once up and running, First Cobalt’s 100%-owned refinery will be North America’s sole producer of cobalt sulfate for the electric vehicle (EV) market.

Under a binding cobalt hydroxide supply contract, Glencore will supply First Cobalt for five years, beginning in Q4/2022, from its KCC mine in the Democratic Republic of Congo (DRC). Regarding IXM, a memorandum of understanding (MOU) was signed that will need to be finalized. The MOU is also for five years from Q4/2022, with 100% of the cobalt hydroxide feed coming from CMOC’s Tenke mine, also in the DRC.

In both agreements, cobalt hydroxide will be purchased based on then-prevailing market prices. An additional 500 tonnes/year of feed will be satisfied through other suppliers or via spot market purchases. The start of shipments is contingent upon First Cobalt obtaining necessary permits and a working capital facility.

The press release covered a number of “ESG” topics (environmental [including life-cycle assessments], social [including ethical sourcing], and corporate governance). Instead of summarizing the impressive manner in which First Cobalt is addressing these important issues, please read the three main paragraphs from the PR below.

As big as this news is, it’s noteworthy that First Cobalt will be working with two of the most ESG-friendly cobalt hydroxide operations in the world. Readers should note that both Glencore’s KCC, and IXM’s Tenke mines run on clean hydroelectric power. These mines will provide 90% of First Cobalt’s annual refinery needs, enough to produce 22,250 tonnes/year of battery-quality cobalt sulfate.

Being supplied from large, green mining operations, owned by giant companies charged with upholding the highest ethical and environmental standards, is a key de-risking event. This should not be taken for granted. There are only a handful of feedstock sources as large, credible and reliable.

Further, the fact Glencore and IXM would agree to contract for five years (two years ahead of the refinery being operational) with a cobalt junior that’s a tiny fraction of their sizes is a tremendous vote of confidence in First Cobalt’s strategy, assets and team.

This news comes soon after the federal government and Ontario government jointly pledged CA$10 million (CA$10M), half as a grant (free money, no repayment) and half as an interest-free, unsecured loan with a 10-year term.

Feedstock procurement and robust government support paves the way for the third leg of the stool—financing roughly CA$76M of upfront cap-ex (~CA$66M remaining after the $10M commitment).

Ongoing warrant and stock option exercises, plus CA$4M from the sale of a non-core silver asset, is steadily chipping away at the formidable capex block. Still, management has been clear that additional equity will be required, even though a significant majority of the funding package will come from debt.

Management has lined up four or five qualified debt providers and will be comparing term sheets in coming weeks to choose the best one or two lenders to move forward with.

The chances of this ambitious refinery project coming together on time and on budget have grown in the past month, with three high-impact press releases, and continued improvement in cobalt prices due to blockbuster expectations for EV penetration later this decade.

These factors suggest that choosing one or more debt proposals will now be easier, and the terms possibly more attractive (lower rates of interest, longer maturity dates, less restrictions). As funding is wrapped up, ongoing work on offtake partners, permitting and construction will become the main focus.

It’s my understanding that construction risk is low. And now, with proven government support, I can’t imagine getting the refinery permits updated will be that difficult. I’m not sure how hard it will be to place battery-quality cobalt sulfate into the market from 2023 on.

However, it’s clear that the amount First Cobalt proposes to sell is not large (<5%) versus the size of the cobalt market for batteries in 2023. Importantly, management believes they can produce a higher quality sulfate than standard benchmark cobalt sulfate specs.

To reiterate, offtake discussions, refinery project financing and permitting amendments are advancing on schedule. Construction could begin as soon as in early summer. Trent Mell, president and CEO commented, “This is a pivotal moment for our North American cobalt refining strategy. Our globally competitive cost structure, and industry-leading ESG credentials, put us in a strong position for the rapidly growing EV market. With feedstock arrangements now in place, we can continue to advance our vision to create a new cobalt supply chain in N. America. . . .EV sales in Europe were up more than 100% in 2020 and the U.S. will be the next large market to take off. We’re now focused on off-take arrangements and a financing package with the goal of commencing construction in mid-2021, and full commissioning in the 2H of 2022.”

In prior articles I’ve written on First Cobalt Corp., I discuss the latest news in the EV space, but this time—suffice it to say that the outlook for EVs from 2023 on, when the refinery will be pumping out product, is quite literally stronger than ever.

How much is a 15/20/25-year stream of cash flows worth to First Cobalt? How much might those cash flows be worth to a giant like Glencore? The latest corporate presentation shows an after-tax net present value (NPV)(8%) of $226M, assuming a fixed, long-term, cobalt sulfate price of US$25/pound and a 13-year refinery life. I found that an after-tax NPV(5%) would be ~25% higher than a NPV(8%).

Why am I changing the discount factor? Glencore’s cost of capital is much lower than First Cobalt’s. For Glencore, with multiple potential synergies (market intelligence, lower feedstock cost, better industry contacts, economies of scale, diversification benefits, etc.) a 5% discount rate would be warranted.

In addition to a lower discount factor, margins operating the refinery would most likely be higher under Glencore (due to the above mentioned synergies). Assuming $5M/year of incremental cash flow, at the same US$25/pound price point, the NPV would be roughly $345M. That’s 2.7x First Cobalt’s enterprise value of ~$130M.

Finally, I suggest that readers consider at least the possibility of a higher cobalt sulfate price than the US$25/pound I’ve used for the past year. Even if US$25/pound is the best we can achieve in the next few years, the refinery has a long lifespan. The average long-term price could be US$30/pound, which would increase the company’s after-tax NPV(8%) to >$200M from $177M.

On an enterprise value (EV)/revenue or EV/EBITDA basis, at US$30/pound, these valuation multiples would be very strong for First Cobalt and its cobalt peers. These metrics would likely support an even higher market cap than the $345M figure mentioned above.

Not many lithium or cobalt juniors could be cash flow positive as soon as H2/2022. Many are four to six years away from initial operations. Some (such as lithium brine projects) have multiple-year production ramp-up periods to reach nameplate capacity.

Readers like me, who feel that global EV penetration will be very strong, perhaps especially strong from 2023 on, should take a closer look at which North American companies can supply the EV battery market with cobalt. I continue to believe there are very few high quality names to choose from! First Cobalt Corp. remains at the top of my list.

Peter Epstein is the founder of Epstein Research. His background is in company and financial analysis. He holds an MBA degree in financial analysis from New York University’s Stern School of Business.

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Peter Epstein’s Disclosures: The content of this article is for information only. Readers fully understand and agree that nothing contained herein, written by Peter Epstein of Epstein Research [ER], (together, [ER]) about First Cobalt Corp., including but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. is to be considered implicit or explicit investment advice. Nothing contained herein is a recommendation or solicitation to buy or sell any security. [ER] is not responsible for investment actions taken by the reader. [ER] has never been, and is not currently, a registered or licensed financial advisor or broker/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and does not perform market making activities. [ER] is not directly employed by any company, group, organization, party or person. The shares of First Cobalt Corp. are highly speculative, not suitable for all investors. Readers understand and agree that investments in small cap stocks can result in a 100% loss of invested funds. It is assumed and agreed upon by readers that they will consult with their own licensed or registered financial advisors before making any investment decisions.

At the time this interview was posted, Peter Epstein owned shares of First Cobalt Corp., and the Company was an advertiser on [ER].

While the author believes he’s diligent in screening out companies that, for any reasons whatsoever, are unattractive investment opportunities, he cannot guarantee that his efforts will (or have been) successful. [ER] is not responsible for any perceived, or actual, errors including, but not limited to, commentary, opinions, views, assumptions, reported facts and financial calculations, or for the completeness of this article or future content. [ER] is not expected or required to subsequently follow or cover any specific events or news, or write about any particular company or topic. [ER] is not an expert in any company, industry sector or investment topic.

Streetwise Reports Disclosure:
1) Peter Epstein’s disclosures are listed above.
2) The following companies mentioned in the article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. Please click here for more information. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.

4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

( Companies Mentioned: FCC:TSX.V; FTSSF:OTCQX; FCC:ASX,
)

Source: Peter Epstein for Streetwise Reports   01/13/2021

Peter Epstein of Epstein Research calls First Cobalt Corp.'s agreements with major firms to deliver feedstock "a major vote of confidence."

On Jan. 12, First Cobalt Corp. (FCC:TSX.V; FTSSF:OTCQX; FCC:ASX) announced two critical long-term (five-year) cobalt hydroxide feedstock arrangements with Glencore International Plc (GLEN:LSE) and IXM SA (a subsidiary of CMOC).

Combined, the agreements call for the supply of 4,500 tonnes of contained cobalt/year, starting in Q4/2022. Once up and running, First Cobalt's 100%-owned refinery will be North America's sole producer of cobalt sulfate for the electric vehicle (EV) market.

Under a binding cobalt hydroxide supply contract, Glencore will supply First Cobalt for five years, beginning in Q4/2022, from its KCC mine in the Democratic Republic of Congo (DRC). Regarding IXM, a memorandum of understanding (MOU) was signed that will need to be finalized. The MOU is also for five years from Q4/2022, with 100% of the cobalt hydroxide feed coming from CMOC's Tenke mine, also in the DRC.

In both agreements, cobalt hydroxide will be purchased based on then-prevailing market prices. An additional 500 tonnes/year of feed will be satisfied through other suppliers or via spot market purchases. The start of shipments is contingent upon First Cobalt obtaining necessary permits and a working capital facility.

The press release covered a number of "ESG" topics (environmental [including life-cycle assessments], social [including ethical sourcing], and corporate governance). Instead of summarizing the impressive manner in which First Cobalt is addressing these important issues, please read the three main paragraphs from the PR below.

As big as this news is, it's noteworthy that First Cobalt will be working with two of the most ESG-friendly cobalt hydroxide operations in the world. Readers should note that both Glencore's KCC, and IXM's Tenke mines run on clean hydroelectric power. These mines will provide 90% of First Cobalt's annual refinery needs, enough to produce 22,250 tonnes/year of battery-quality cobalt sulfate.

Being supplied from large, green mining operations, owned by giant companies charged with upholding the highest ethical and environmental standards, is a key de-risking event. This should not be taken for granted. There are only a handful of feedstock sources as large, credible and reliable.

Further, the fact Glencore and IXM would agree to contract for five years (two years ahead of the refinery being operational) with a cobalt junior that's a tiny fraction of their sizes is a tremendous vote of confidence in First Cobalt's strategy, assets and team.

This news comes soon after the federal government and Ontario government jointly pledged CA$10 million (CA$10M), half as a grant (free money, no repayment) and half as an interest-free, unsecured loan with a 10-year term.

Feedstock procurement and robust government support paves the way for the third leg of the stool—financing roughly CA$76M of upfront cap-ex (~CA$66M remaining after the $10M commitment).

Ongoing warrant and stock option exercises, plus CA$4M from the sale of a non-core silver asset, is steadily chipping away at the formidable capex block. Still, management has been clear that additional equity will be required, even though a significant majority of the funding package will come from debt.

Management has lined up four or five qualified debt providers and will be comparing term sheets in coming weeks to choose the best one or two lenders to move forward with.

The chances of this ambitious refinery project coming together on time and on budget have grown in the past month, with three high-impact press releases, and continued improvement in cobalt prices due to blockbuster expectations for EV penetration later this decade.

These factors suggest that choosing one or more debt proposals will now be easier, and the terms possibly more attractive (lower rates of interest, longer maturity dates, less restrictions). As funding is wrapped up, ongoing work on offtake partners, permitting and construction will become the main focus.

It's my understanding that construction risk is low. And now, with proven government support, I can't imagine getting the refinery permits updated will be that difficult. I'm not sure how hard it will be to place battery-quality cobalt sulfate into the market from 2023 on.

However, it's clear that the amount First Cobalt proposes to sell is not large (<5%) versus the size of the cobalt market for batteries in 2023. Importantly, management believes they can produce a higher quality sulfate than standard benchmark cobalt sulfate specs.

To reiterate, offtake discussions, refinery project financing and permitting amendments are advancing on schedule. Construction could begin as soon as in early summer. Trent Mell, president and CEO commented, "This is a pivotal moment for our North American cobalt refining strategy. Our globally competitive cost structure, and industry-leading ESG credentials, put us in a strong position for the rapidly growing EV market. With feedstock arrangements now in place, we can continue to advance our vision to create a new cobalt supply chain in N. America. . . .EV sales in Europe were up more than 100% in 2020 and the U.S. will be the next large market to take off. We're now focused on off-take arrangements and a financing package with the goal of commencing construction in mid-2021, and full commissioning in the 2H of 2022."

In prior articles I've written on First Cobalt Corp., I discuss the latest news in the EV space, but this time—suffice it to say that the outlook for EVs from 2023 on, when the refinery will be pumping out product, is quite literally stronger than ever.

How much is a 15/20/25-year stream of cash flows worth to First Cobalt? How much might those cash flows be worth to a giant like Glencore? The latest corporate presentation shows an after-tax net present value (NPV)(8%) of $226M, assuming a fixed, long-term, cobalt sulfate price of US$25/pound and a 13-year refinery life. I found that an after-tax NPV(5%) would be ~25% higher than a NPV(8%).

Why am I changing the discount factor? Glencore's cost of capital is much lower than First Cobalt's. For Glencore, with multiple potential synergies (market intelligence, lower feedstock cost, better industry contacts, economies of scale, diversification benefits, etc.) a 5% discount rate would be warranted.

In addition to a lower discount factor, margins operating the refinery would most likely be higher under Glencore (due to the above mentioned synergies). Assuming $5M/year of incremental cash flow, at the same US$25/pound price point, the NPV would be roughly $345M. That's 2.7x First Cobalt's enterprise value of ~$130M.

Finally, I suggest that readers consider at least the possibility of a higher cobalt sulfate price than the US$25/pound I've used for the past year. Even if US$25/pound is the best we can achieve in the next few years, the refinery has a long lifespan. The average long-term price could be US$30/pound, which would increase the company's after-tax NPV(8%) to >$200M from $177M.

On an enterprise value (EV)/revenue or EV/EBITDA basis, at US$30/pound, these valuation multiples would be very strong for First Cobalt and its cobalt peers. These metrics would likely support an even higher market cap than the $345M figure mentioned above.

Not many lithium or cobalt juniors could be cash flow positive as soon as H2/2022. Many are four to six years away from initial operations. Some (such as lithium brine projects) have multiple-year production ramp-up periods to reach nameplate capacity.

Readers like me, who feel that global EV penetration will be very strong, perhaps especially strong from 2023 on, should take a closer look at which North American companies can supply the EV battery market with cobalt. I continue to believe there are very few high quality names to choose from! First Cobalt Corp. remains at the top of my list.

Peter Epstein is the founder of Epstein Research. His background is in company and financial analysis. He holds an MBA degree in financial analysis from New York University's Stern School of Business.

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Peter Epstein's Disclosures: The content of this article is for information only. Readers fully understand and agree that nothing contained herein, written by Peter Epstein of Epstein Research [ER], (together, [ER]) about First Cobalt Corp., including but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. is to be considered implicit or explicit investment advice. Nothing contained herein is a recommendation or solicitation to buy or sell any security. [ER] is not responsible for investment actions taken by the reader. [ER] has never been, and is not currently, a registered or licensed financial advisor or broker/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and does not perform market making activities. [ER] is not directly employed by any company, group, organization, party or person. The shares of First Cobalt Corp. are highly speculative, not suitable for all investors. Readers understand and agree that investments in small cap stocks can result in a 100% loss of invested funds. It is assumed and agreed upon by readers that they will consult with their own licensed or registered financial advisors before making any investment decisions.

At the time this interview was posted, Peter Epstein owned shares of First Cobalt Corp., and the Company was an advertiser on [ER].

While the author believes he's diligent in screening out companies that, for any reasons whatsoever, are unattractive investment opportunities, he cannot guarantee that his efforts will (or have been) successful. [ER] is not responsible for any perceived, or actual, errors including, but not limited to, commentary, opinions, views, assumptions, reported facts and financial calculations, or for the completeness of this article or future content. [ER] is not expected or required to subsequently follow or cover any specific events or news, or write about any particular company or topic. [ER] is not an expert in any company, industry sector or investment topic.

Streetwise Reports Disclosure:
1) Peter Epstein's disclosures are listed above.
2) The following companies mentioned in the article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. Please click here for more information. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

( Companies Mentioned: FCC:TSX.V; FTSSF:OTCQX; FCC:ASX, )

Ballard Receives Order for Scotland’s First Fuel Cell-Powered Train

Source: Streetwise Reports   01/12/2021

Shares of Ballard Power Systems traded 18% higher to a new 52-week high after the company reported that it had received an order from Arcola Energy for its FCmove-HD fuel cell modules…

Source: Streetwise Reports   01/12/2021

Shares of Ballard Power Systems traded 18% higher to a new 52-week high after the company reported that it had received an order from Arcola Energy for its FCmove-HD fuel cell modules that will be used to power Scotland's first fuel cell-powered train.

Ballard Power Systems Inc. (BLDP:NASDAQ) today announced that it has received a purchase order from U.K.-based Arcola Energy for Ballard FCmoveTM-HD fuel cell modules that will be used to power Scotland's first fuel cell-powered passenger train.

The firm noted that Arcola is "a leader in hydrogen and fuel cell integration specializing in zero-emission solutions for heavy-duty vehicles and transport applications." As part of Scotland's vision for net zero emissions by 2035, Arcola is planning to utilize the Ballard fuel cell modules to power a passenger train that will be featured during a demonstration at COP26 in Glasgow City in November 2021.

Ballard Power Systems indicated that Arcola, along with a consortium of industry leaders in hydrogen fuel cell integration, rail engineering and safety, has been tasked to deliver Scotland's first hydrogen-powered train. The company pointed out that the consortium's efforts will be directed at "converting a Class 314 car passenger train, made available by ScotRail, into a deployment-ready and certified platform for hydrogen-powered train development."

Arcola Energy's CEO Dr. Ben Todd commented, "Hydrogen traction power offers a safe, reliable and zero-carbon alternative for Scotland's rail network. The hydrogen train project is an excellent opportunity for industry leaders in hydrogen, rail engineering and safety to collaborate with Scottish and other technology providers to develop a deployment ready solution."

Ballard Power Systems' Chief Commercial Officer Rob Campbell remarked, "Ballard is delighted to work with Arcola and other consortium members on the development of Scotland's first fuel cell-powered train. This project is an example of the growing global interest in fuel cells for the Medium- and Heavy-Duty Motive market, including rail applications, where heavy payload, long range and rapid refueling are key customer requirements."

Ballard Power Systems is a clean energy solutions company headquartered in Vancouver, British Columbia, focused on design and large-scale automated manufacturing of proton exchange membrane (PEM) fuel cell products. The company's zero-emission PEM fuel cell products are engineered for use in a variety of applications, but are mostly purposed for enabling electrification of mobility in automobiles, buses, commercial trucks, construction equipment including forklift trucks, marine vessels, and trains. The firm stated that its products also address increasing needs in the demand for backup and portable power.

Ballard Power Systems began the day with a market capitalization of around $8.2 billion with approximately 281.9 million shares outstanding and a short interest of about 5.0%. BLDP ADR shares opened more than 8% higher today at $31.35 (+$2.39, +8.25%) over yesterday's $28.96 closing price and reached a new 52-week high this morning of $34.646. The stock has traded today between $31.12 and $34.646 per share and is currently trading at $34.41 (+$5.45, +18.82%).

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Disclosure:
1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Target Price Raised on Energy Firm Making ‘Transformative Acquisition’

Source: Streetwise Reports   01/06/2021

The terms and benefits of Earthstone Energy’s purchase of an oil and gas company, an “eye-catching act of deal making,” are presented in a ROTH Capital Partners report.In a Jan. 4 res…

Source: Streetwise Reports   01/06/2021

The terms and benefits of Earthstone Energy's purchase of an oil and gas company, an "eye-catching act of deal making," are presented in a ROTH Capital Partners report.

In a Jan. 4 research note, ROTH Capital Partners analyst John White reported that ROTH Capital Partners is increasing its price target on Earthstone Energy Inc. (ESTE:NYSE.MKT) to $10.50 per share following its acquisition announcement. The current share price is about $6.26.

Earthstone Energy agreed to purchase Independence Resources Management for $185.9 million, composed of $135.2 million cash and 12.7 million common stock shares. Independence is a private, Texas-based, Midland Basin-focused explorer and producer (E&P).

Through the transaction Earthstone will gain an average production of 8,780 barrels of oil equivalent per day with 66% oil during Q3/20, 4,900 core net acres and 70 undeveloped horizontal locations.

White laid out why the acquisition is favorable for Earthstone.

For one, it will increase the Colorado-headquartered energy firm's size, resulting in a higher stock valuation in the intermediate and long term.

"The addition of Independence's production represents a 52% increase over Earthstone's actual Q3/20 production," White specified.

Because larger exploration and production companies typically trade at a higher valuation, and Earthstone's valuation is currently below that, there is "upside in the potential for multiple expansion," he added.

Another benefit is that the terms of the deal are attractive, the purchase price multiple being about 2.3x. Also, the value of Independence's proved reserves is such that Earthstone will essentially get them for free.

"All in all, [it was] an eye-catching act of deal making," commented White.

Third, the location of Independence's core properties, near Earthstone's assets, is ideal. Also, the acquiree's acreage is of high quality and with seemingly low risk for reserves and production, from the Middle Spraberry, Lower Spraberry and Wolfcamp A zones and, potentially, other locations in the Jo Mill, Wolfcamp B and Wolfcamp D formations.

ROTH Capital has a Buy rating on Earthstone.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Disclosures from ROTH Capital Partners, Earthstone Energy Inc., Company Note, January 4, 2021

Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

ROTH makes a market in shares of Earthstone Energy, Inc. and as such, buys and sells from customers on a principal basis.

Shares of Earthstone Energy, Inc. may be subject to the Securities and Exchange Commission's Penny Stock Rules, which may set forth sales practice requirements for certain low-priced securities.

ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.

( Companies Mentioned: ESTE:NYSE.MKT, )

2021 Forecast Issue: Financial Navigation in Uncharted Waters

Source: Michael Ballanger for Streetwise Reports   01/05/2021

Sector expert Michael Ballanger lays out the foundation for his investment strategy in the new year, with uranium and copper augmenting his focus on the precious metals.

As I sat down in mid-December to formulate the draft outline for my 2021 Forecast Issue, I was immediately engulfed with a feeling of impending dread, not by way of dissatisfaction with the investments currently being held in my portfolio and trading accounts, but by being confronted with such a vast array of possible outcomes in the upcoming year 2021. Adding insult to injury, it is also the uncertainty of outcomes that places forecasts directly in the crosshairs of failure and embarrassment, resulting in fewer and less happy subscribers.

In contrast, during the same period one year ago, I knew that the single greatest issue facing us was managing the rapidly approaching debt monster, which allowed me to assume that markets would not look kindly upon the U.S. Fed chairman Jerome Powell and his sudden about-face in monetary policy. When the REPO fiasco began in Q3/2019, it was as plain as the nose on his face that Powell looked into the crystal ball and was horrified with what he saw. His vain (and lame) attempt to “normalize” the Fed balance sheet earlier that year had laid to bare a pitifully fragile debt structure teetering on the brink of implosion. He and his global central bank brethren sprang to action, flooding the world with wave after wave of counterfeit cash otherwise known as “liquidity.”

As a strategist, it was an easy call to construct a portfolio of gold and silver and their corporate offspring (gold and silver miners), with the result being a range of year-to-date returns swinging from GDX:US (Senior Gold Miner ETF) up 27.36% to Getchell Gold Corp. (GTCH:CSE) up 195.83% and Norseman Silver Ltd. (NOC:TSX.V) up 400% (as of Dec. 27, 2020).

However, sitting in my office overlooking the Kawartha swamp, I find myself without a chart, no GPS, and night clouds blocking the stars, rendering the vessel’s sextant impotent. Between the pandemic and the absurdity of bumbling bureaucratic responses, the global currency system has been turned upside down by the simultaneous pressing of panic buttons in treasury department boardrooms, central bank think sessions and government policy politburos.

Alas, despite being bereft of navigational apparatus, there remains a certain consistency in the global economic “condition.” Not only has the debt monster remained a factor, but it has also since grown into a leviathan of epic proportion and threat, and what makes it so lethal is that those who contributed to its obesity are the very ones telling us that it no longer matters. “Modern Monetary Theory” allows government employees to receive weekly paychecks while small business owners are shuttering not only their operations but, sadly and outrageously, their lives.

If the basis for investment strategy in 2020 was debt, then the explosion in its size and universal acceptance has now become my primary theme for 2021. With the cyclically adjusted price to earnings ratio (or CAPE, as it is known) now higher than the 1929 peak, it has become a matter of public policy to ensure that citizens are educated to the wonders of central bank charity.

In a manner not unlike the famous “Emperor’s New Clothes” literary folktale, there can never be a young lad pointing to a naked monarch lest the entire financial system unravel. With interventions rampant across all asset classes regardless of borders or nationalities, the citizenry is now being schooled in the art of Ponzi-scheme management by way of daily doses of propagandist doctrine crafted by Wall Street for the benefit of Wall Street, to the detriment of retirees and savers the world over.

In the 2020 Forecast Issue, I posted this chart of the ratio of national debt to gold reserves among the top holders of central bank gold. While I would have loved to provide all of you with an updated version, I cannot, because there are no longer any reliable sources for the data available last year. For example, Canada, whose central bank sold all of its gold decades ago, has a debt level that has grown by an estimated ten times the US$1.5 trillion it sported in 2019.

The U.S. was pegged at US$25 trillion, but their revised number is estimated to be $35–45 trillion and that is before the release of the stimulus package in 2021. Europe and Asia are no better. To say that governments the world over are insolvent is an understatement, but the real question that remains to be answered is: Will it matter?

There are cases in history where serial debasers of domestic currencies assumed the practice of convincing their citizens that it “did not matter,” and they would be Rome circa the invasion of the Barbarians, Weimar Germany 1921–1923, Zimbabwe 1980–2000, and Venezuela 2000–2020. Inflation rates in Venezuela approached 300,000% in 2019 and things are no better today.

These are historical events that occurred because the people in charge of the issuance of credit and currency sacrificed the integrity of their currencies’ purchasing power in return for the adulation of the electorate. In other words, in every instance, they opted for votes over fiscal prudence. In the case of Canada and the U.S., where 10% of the citizens control 90% of the assets, reflating the asset bubble in 2020 with phony stimulus money has further impoverished the 90%, now without jobs and in lockdown, while further enriching the 10% whose stock portfolios and multiple properties continue to hit new highs.

Given the ferocity of debasement spurred on by the fear-mongering media, government officials are now scrambling to appease the 90% as visions of guillotines in public assemblages dance in their heads.

One of the interesting side effects of the pandemic is how it gave the police and the National Guard an excuse to descend upon public protests, like Black Lives Matter and antifa, and implement legalized disbursement trumping First Amendment rights in the name of “public safety.” I wrote in 2020 that the surge in public protest actually had nothing to do with racial injustice or left versus right politics; it was solidly grounded in the astronomical rise in wealth inequality as wealth redistribution becomes “the nobler cause” rather than “theft,” which is far more accurate.

For me, this is one of the major themes for 2021: Having your wealth close by is far more soothing than having to log into a website owned and operated by a stranger to see how many digital coins I hold or how many shares of the latest Robinhood deal have traded. Call me old-fashioned or call me clueless, but there is something infinitely satisfying about opening the safe and counting silver and gold coins and bars while the Smith & Wesson stands next to the wine rack, ready, willing, and able to dissuade some unemployed philosophy graduate from “redistributing” my hard-earned wealth to his (or her) pocket.

The graphic shown above perfectly describes my thought process when it comes to how I view my fellow citizens of more recent birth and graduation dates. The problem with “entitlement thinking” is that one winds up totally unprepared for life’s curveballs when they arrive. As for this new generation of day traders and Robinhooders and electric vehicle worshippers, they may be the new target market for the financial planning industry, but something is amiss.

I called my online discount broker yesterday over a problem with a DRS deposit and after being on hold for two hours (not an exaggeration), I finally got through to a “customer service representative.” After being told that he could not help me, I asked him, “Why the two-hour wait?” to which he responded, “Market conditions are driving thousands of young people to open accounts with us.”

The law of unintended consequences dominates whenever one tries to divert the flow of a river or a stream, because it only works until it overflows its banks and continues in the direction of least resistance, with gravity in full control. Similarly, trying to keep stock markets elevated in order to appease the masses only accentuates the magnitude of damage once the bubble bursts. Trying to suppress gold and silver prices in order to create optics that defy this massive currency debasement can only result in bad things happening, as in the period after the March Covid Crash, when gold rocketed to all-time highs against the U.S. currency. To learn that brokerage accounts are being opened in such volumes due to “market conditions” underscores the existence of the “bubble” that is so clearly illustrated by the CAPE ratio shown below.

Investing in 2021

As I move into the New Year, I will continue to favor companies that have gold and silver resources in place, thus creating optionality on the prices in both direction and amplitude. We watched in 2020 as projects that were deemed “marginal” at US$1,200 gold suddenly became Tier 1 assets at US$1,800 gold. Even greater impact will be felt in the silver developers due to the impeccable chart formation that now favors silver over gold.

Gold: (US$1,895.10): Gold is in a long-term, multiyear bull market that began in December 2015 and should continue through 2023, albeit with multiple corrections along the way. At the forefront of your investment strategy is the conviction that there is going to be a U.S. dollar gold price reset, designed to bolster the collateral value of the 8,134 metric tonnes believed to exist in the U.S. treasury.

All of the chart formations on the planet will be meaningless if we get another “Gold Reserve Act” like the one passed on Jan. 30, 1934, whereby Franklin Roosevelt signed into law (after it was passed in Congress) a unilateral change in the dollar-denominated price of gold. The 69.33% increase took the price from US$20.67 to $35 where it remained until 1971, when Nixon ended the convertibility of dollars to gold, giving rise to the Great Bull Market of the 1970s and the crippling stagflation that plagued that period.

I have shown subscribers on numerous occasions how 8,134 metric tonnes could be used to collateralize the U.S. national debt, but at $1,886 per ounce, it has a dollar value of approximately $540 billion. As a percentage of the post-Covid national debt (estimated to be approaching $45 trillion in 2021), the value of the gold held by the U.S. is 1.21%, which does not qualify as adequate collateral for such a gargantuan debt structure.

However, if you increase the price of gold by 8.26 times, the value of the gold rises to 10% of $45 trillion, which then may qualify as “adequate collateral.” Incidentally, that would infer a gold price of $15,578 per ounce. Just as no one can even imagine that happening, no one thought it possible in 1934 for the gold price to rise 69.33% with the stroke of an executive order pen.

Silver (US$26.03): Unlike gold, silver broke out of the four-month correction on Dec. 16 and now looks poised for a test of the 2020 highs around US$30/ounce. The silver stocks, particularly the juniors, are rapidly approaching their 2020 peaks, thus confirming the action in the March futures. 2021 could be the year that the gold-to-silver ratio (GSR) gets down to the May 2011 lows, around 42 from the current level of 72.

The superlative action in silver here in December was best explained by a colleague whose is my age but whose son is well-versed in the mindsets of the Millennials and the Gen-Xers. It seems that they view silver as a modern-day elixir, very pro-technology, very pro-environmental and basically “cooler” than gold. They are steadfast in their unshakeable belief that Bitcoin has seized the throne of “value-protector” from gold but, surprisingly, not silver. Bitcoin can never replace silver for its tech-friendly attributes, and the result is a tsunami of newer, younger investors clamouring to build portfolios stuffed with both Bitcoin and silver.

Now, make no mistake—purists like your author cannot even tiptoe into that cesspool of debate because, well, I am a dinosaur with Jurassic biases and Pleistocene thought processes. The grey hair in my beard would turn back to strawberry blond in a Mesozoic minute if I were forced to debunk the notion that gold’s 5,000-year utility of immunity to currency destruction has today somehow ended.

However, as a shareholder of silver developers, it is incumbent upon me to put aside my biases and focus on the possible impact of millions of new, social-media-driven investors swarming down upon the global supply of silver and of the companies that explore for, develop and mine it. It embraces a new paradigm of strategic thinking and a timely unshackling of ideological bonds.

Uranium (US$29.90): The big surprise in the final stretches of 2020 was the explosion in the uranium stocks. With the price still unable to scale the US$30/lb. level, 90% of the uranium developers that trade on the North American exchanges cannot make a plug nickel of profit from their mining operations. However, like 2018, when the uranium cheerleaders were trotting out charts of new reactor construction and mine closures around the world, it turned out to be a stock play rather than a commodity or energy play, because by mid-2019, the prices of all of the major players had settled back down to earth once again, confirming that the rumors of uranium’s untimely death were, in fact, true.

After a bear market that began in 2008, there has been a 95% reduction in the number of uranium names in twelve years, giving credence to the notion that maybe this time it truly is different. I remain intrigued and alert.

Copper (US$3.65/lb.): In past bull markets, copper has been anything but a “sexy metal;” it almost always finds its way into macroeconomic debates rather than the focus of staking rushes or area plays. However, copper has quietly moved in stealth-like fashion from the COVID Crash March lows under US$2.00/lb. to the best weekly close in years at US$3.64/lb., marking a 67.2% advance and soundly thrashing gold, whose 27.29% move pales by comparison.

While currently seriously overbought, the charts shown below reveal a vastly different narrative than the “subdued inflation” meme being trotted out by Jerome Powell and his central bank inflation collaborators. To be sure, the weak U.S. dollar is the culprit behind it, but if you listen to the copper bulls, electric vehicle production is adding significant demand-pull pressures on pricing, and as I mentioned earlier regarding this new wave of investors dominating the blogosphere and twitterverse, if they believe that copper is an eco-friendly commodity, they will gravitate toward it and any junior developers and explorers with a good story and social media presence.

I draw your attention to Dr. Copper (called so because it is said to be the one commodity with a PhD in economics) because my two premier holdings (Getchell Gold Corp. and Norseman Silver) are both exploring properties that have significant potential for copper deposits. Now, before the precious metals devotees go running from the room, it should be remembered that in Rouyn, Quebec, the Horne Mine was a copper mining operation that had gold as a byproduct. Over its life, in addition to recovering 1.13 million tonnes of copper, the mine produced 260 tonnes (11.6 million ounces) of gold, making it one of the biggest gold producers in Canadian history.

Copper-gold porphyry deposits are not uncommon in Nevada nor British Columbia, and due to their scale, they are prized possessions. For this reason, it is important to keep a close watch over copper prices and the upcoming exploration programs for our two top juniors.

Senior Gold Miners ETF (GDX:US) (US$36.58): Due to the boring nature of this chart, I am standing aside but prefer Barrick Gold Corp. (ABX:TSX; GOLD:NYSE) as a stand-alone play.

Junior Miner ETF (GDXJ:US) (US$54.42): The junior gold miners have just experienced a complete capitulation blow-off in November, which I identified as a bottom on Nov. 30 and initiated purchases of Barrick Gold and Eldorado Gold Corp. (ELD:TSX; EGO:NYSE). Although the GDXJ has a better set-up than GDX, November’s wretched performance was classically the newbie late-comers to the precious metals party dumping positions that they bought in July-August purely on momentum, and whether or not they have been switching to crypto, it is going to take a while for them to place their charred fingers back in the space.

Around mid-July, I began to reduce exposure to the senior and intermediate gold miners, and since the GDXJ no longer owns the micro-cap developer/explorers, I determined that these “little guys” were going to be very safe harbors in the event of a precious metals hurricane in the second half of the year (which there was). After eliminating both GDX and GDXJ from the GGMA 2020 Portfolio, I moved to overweight positions in gold and silver micro-cap developer/ explorers, where I hid from November’s gold and silver exchange-traded fund (ETF) bloodbath. I am able to head into 2021 with the two largest holdings closing out the year up 183% and 400% year-to-date (YTD) and which comprise over 62% of the portfolio. Comparing those returns to GDX (up 24.93% YTD) and GDXJ (up 28.77% YTD), the performance numbers certainly validated my move to the developer/explorer group and explain the 200%-plus return on investment (ROI) for the GGMA 2020 Portfolio.

A Stellar Year

Two recent additions to the portfolio were Barrick and Eldorado, both purchased on the exact day they bottomed (Nov. 30), which now represent laser-beam substitutes for the Senior and Junior Gold ETFs. I elected to avoid the risk of tax-loss selling and portfolio rebalancing, which would be more pronounced in the ETFs than in the two names I selected, but once December is over, the ETFs will undoubtedly rally.

Looking back to the year 2020, I had some good calls, and I had some not-so-good calls. Calling the arrival of the bear market in late February turned out to be spot-on, but for the wrong reason—I did not believe that the pandemic would throw the politicians into panic mode, which threw investors into panic mode, resulting in every central bank on the planet going into panic mode.

I called the bottom in gold and silver to the exact day (March 16) and in oil (April 22), but I missed the technology rally and I missed Bitcoin, two misses that I will continue to make as long as I am breathing. I should have avoided the volatility trade (UVXY:US) and the SPY short (SDS:US), but who would have thought back in July that the Dow Jones, the S&P 500, and the NASDAQ would see all-time highs with a U.S. and global economy in lockdown?

The upcoming year will be dominated by the impact of the vaccines upon the global population, but more importantly how these central planner politicians react. Despite an immune system that has worked pretty much without fail for several thousand years, past pandemics came and went without legislated lockdowns and economic madness.

However, the dominant theme in 2021 will continue to be debt, with the addition of another term for consideration—insolvency. Most markets around the world have been fanned and fueled by liquidity injections from both central banks (monetary) and government treasuries (fiscal), so markets have fully discounted a positive outcome for the vaccine and political responses. With stocks sporting valuations higher then 1929, I believe that they are priced for totalperfection, leaving them extremely vulnerable to disappointment.

The offset to that is the obsession carried by central banks toward stock prices; in the minds of the spigot-controllers, there can be no more corrections, and that is why shorting markets when the liquidity valves are set at “open” is a flawed strategy. You want to stay with the “short cash; long everything it can buy” strategy until there is rioting in the streets over food or gas prices. It is then, and only then, that monetary policy will turn hostile, and if the Fed is in the mood to tighten after twelve years of outrageously easy money, then you have to run for the hills, because cash will once again be king. For the near term though, the Fed has said they are not going to do anything hostile until 2023, and until the evidence proves otherwise, the status quo remains in place.

Specific to the performance of our junior developers and explorers will be execution. Management has to execute all of the steps required to add value, and if 2020 is any barometer for 2021 expectations, we should be in great shape.

Subscribers are now in possession of the GGM Advisory 2021 Forecast Issue, which includes another seventeen pages of commentary on the companies I own. If you wish to become a subscriber, direct message me on Twitter @MiningJunkie or email me at miningjunkie216@outlook.com.

Follow Michael Ballanger on Twitter @MiningJunkie.

Originally trained during the inflationary 1970s, Michael Ballanger is a graduate of Saint Louis University where he earned a Bachelor of Science in finance and a Bachelor of Art in marketing before completing post-graduate work at the Wharton School of Finance. With more than 30 years of experience as a junior mining and exploration specialist, as well as a solid background in corporate finance, Ballanger’s adherence to the concept of “Hard Assets” allows him to focus the practice on selecting opportunities in the global resource sector with emphasis on the precious metals exploration and development sector. Ballanger takes great pleasure in visiting mineral properties around the globe in the never-ending hunt for early-stage opportunities.

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Disclosure:
1) Michael J. Ballanger: I, or members of my immediate household or family, own securities of the following companies mentioned in this article: Getchell Gold, Barrick Gold, Eldorado Gold and Norseman Silver. My company has a financial relationship with the following companies referred to in this article: Getchell Gold and Norseman Silver. I determined which companies would be included in this article based on my research and understanding of the sector. Additional disclosures are below.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Getchell Gold. Please click here for more information.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Getchell Gold and Norseman Silver, companies mentioned in this article.

Michael Ballanger Disclaimer: This letter makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This letter represents my views and replicates trades that I am making but nothing more than that. Always consult your registered advisor to assist you with your investments. I accept no liability for any loss arising from the use of the data contained on this letter. Options and junior mining stocks contain a high level of risk that may result in the loss of part or all invested capital and therefore are suitable for experienced and professional investors and traders only. One should be familiar with the risks involved in junior mining and options trading and we recommend consulting a financial adviser if you feel you do not understand the risks involved.

( Companies Mentioned: ABX:TSX; GOLD:NYSE,
ELD:TSX; EGO:NYSE,
GTCH:CSE,
NOC:TSX.V,
)

Source: Michael Ballanger for Streetwise Reports   01/05/2021

Sector expert Michael Ballanger lays out the foundation for his investment strategy in the new year, with uranium and copper augmenting his focus on the precious metals.

As I sat down in mid-December to formulate the draft outline for my 2021 Forecast Issue, I was immediately engulfed with a feeling of impending dread, not by way of dissatisfaction with the investments currently being held in my portfolio and trading accounts, but by being confronted with such a vast array of possible outcomes in the upcoming year 2021. Adding insult to injury, it is also the uncertainty of outcomes that places forecasts directly in the crosshairs of failure and embarrassment, resulting in fewer and less happy subscribers.

In contrast, during the same period one year ago, I knew that the single greatest issue facing us was managing the rapidly approaching debt monster, which allowed me to assume that markets would not look kindly upon the U.S. Fed chairman Jerome Powell and his sudden about-face in monetary policy. When the REPO fiasco began in Q3/2019, it was as plain as the nose on his face that Powell looked into the crystal ball and was horrified with what he saw. His vain (and lame) attempt to "normalize" the Fed balance sheet earlier that year had laid to bare a pitifully fragile debt structure teetering on the brink of implosion. He and his global central bank brethren sprang to action, flooding the world with wave after wave of counterfeit cash otherwise known as "liquidity."

As a strategist, it was an easy call to construct a portfolio of gold and silver and their corporate offspring (gold and silver miners), with the result being a range of year-to-date returns swinging from GDX:US (Senior Gold Miner ETF) up 27.36% to Getchell Gold Corp. (GTCH:CSE) up 195.83% and Norseman Silver Ltd. (NOC:TSX.V) up 400% (as of Dec. 27, 2020).

However, sitting in my office overlooking the Kawartha swamp, I find myself without a chart, no GPS, and night clouds blocking the stars, rendering the vessel's sextant impotent. Between the pandemic and the absurdity of bumbling bureaucratic responses, the global currency system has been turned upside down by the simultaneous pressing of panic buttons in treasury department boardrooms, central bank think sessions and government policy politburos.

Alas, despite being bereft of navigational apparatus, there remains a certain consistency in the global economic "condition." Not only has the debt monster remained a factor, but it has also since grown into a leviathan of epic proportion and threat, and what makes it so lethal is that those who contributed to its obesity are the very ones telling us that it no longer matters. "Modern Monetary Theory" allows government employees to receive weekly paychecks while small business owners are shuttering not only their operations but, sadly and outrageously, their lives.

If the basis for investment strategy in 2020 was debt, then the explosion in its size and universal acceptance has now become my primary theme for 2021. With the cyclically adjusted price to earnings ratio (or CAPE, as it is known) now higher than the 1929 peak, it has become a matter of public policy to ensure that citizens are educated to the wonders of central bank charity.

In a manner not unlike the famous "Emperor's New Clothes" literary folktale, there can never be a young lad pointing to a naked monarch lest the entire financial system unravel. With interventions rampant across all asset classes regardless of borders or nationalities, the citizenry is now being schooled in the art of Ponzi-scheme management by way of daily doses of propagandist doctrine crafted by Wall Street for the benefit of Wall Street, to the detriment of retirees and savers the world over.

In the 2020 Forecast Issue, I posted this chart of the ratio of national debt to gold reserves among the top holders of central bank gold. While I would have loved to provide all of you with an updated version, I cannot, because there are no longer any reliable sources for the data available last year. For example, Canada, whose central bank sold all of its gold decades ago, has a debt level that has grown by an estimated ten times the US$1.5 trillion it sported in 2019.

The U.S. was pegged at US$25 trillion, but their revised number is estimated to be $35–45 trillion and that is before the release of the stimulus package in 2021. Europe and Asia are no better. To say that governments the world over are insolvent is an understatement, but the real question that remains to be answered is: Will it matter?

There are cases in history where serial debasers of domestic currencies assumed the practice of convincing their citizens that it "did not matter," and they would be Rome circa the invasion of the Barbarians, Weimar Germany 1921–1923, Zimbabwe 1980–2000, and Venezuela 2000–2020. Inflation rates in Venezuela approached 300,000% in 2019 and things are no better today.

These are historical events that occurred because the people in charge of the issuance of credit and currency sacrificed the integrity of their currencies' purchasing power in return for the adulation of the electorate. In other words, in every instance, they opted for votes over fiscal prudence. In the case of Canada and the U.S., where 10% of the citizens control 90% of the assets, reflating the asset bubble in 2020 with phony stimulus money has further impoverished the 90%, now without jobs and in lockdown, while further enriching the 10% whose stock portfolios and multiple properties continue to hit new highs.

Given the ferocity of debasement spurred on by the fear-mongering media, government officials are now scrambling to appease the 90% as visions of guillotines in public assemblages dance in their heads.

One of the interesting side effects of the pandemic is how it gave the police and the National Guard an excuse to descend upon public protests, like Black Lives Matter and antifa, and implement legalized disbursement trumping First Amendment rights in the name of "public safety." I wrote in 2020 that the surge in public protest actually had nothing to do with racial injustice or left versus right politics; it was solidly grounded in the astronomical rise in wealth inequality as wealth redistribution becomes "the nobler cause" rather than "theft," which is far more accurate.

For me, this is one of the major themes for 2021: Having your wealth close by is far more soothing than having to log into a website owned and operated by a stranger to see how many digital coins I hold or how many shares of the latest Robinhood deal have traded. Call me old-fashioned or call me clueless, but there is something infinitely satisfying about opening the safe and counting silver and gold coins and bars while the Smith & Wesson stands next to the wine rack, ready, willing, and able to dissuade some unemployed philosophy graduate from "redistributing" my hard-earned wealth to his (or her) pocket.

The graphic shown above perfectly describes my thought process when it comes to how I view my fellow citizens of more recent birth and graduation dates. The problem with "entitlement thinking" is that one winds up totally unprepared for life's curveballs when they arrive. As for this new generation of day traders and Robinhooders and electric vehicle worshippers, they may be the new target market for the financial planning industry, but something is amiss.

I called my online discount broker yesterday over a problem with a DRS deposit and after being on hold for two hours (not an exaggeration), I finally got through to a "customer service representative." After being told that he could not help me, I asked him, "Why the two-hour wait?" to which he responded, "Market conditions are driving thousands of young people to open accounts with us."

The law of unintended consequences dominates whenever one tries to divert the flow of a river or a stream, because it only works until it overflows its banks and continues in the direction of least resistance, with gravity in full control. Similarly, trying to keep stock markets elevated in order to appease the masses only accentuates the magnitude of damage once the bubble bursts. Trying to suppress gold and silver prices in order to create optics that defy this massive currency debasement can only result in bad things happening, as in the period after the March Covid Crash, when gold rocketed to all-time highs against the U.S. currency. To learn that brokerage accounts are being opened in such volumes due to "market conditions" underscores the existence of the "bubble" that is so clearly illustrated by the CAPE ratio shown below.

Investing in 2021

As I move into the New Year, I will continue to favor companies that have gold and silver resources in place, thus creating optionality on the prices in both direction and amplitude. We watched in 2020 as projects that were deemed "marginal" at US$1,200 gold suddenly became Tier 1 assets at US$1,800 gold. Even greater impact will be felt in the silver developers due to the impeccable chart formation that now favors silver over gold.

Gold: (US$1,895.10): Gold is in a long-term, multiyear bull market that began in December 2015 and should continue through 2023, albeit with multiple corrections along the way. At the forefront of your investment strategy is the conviction that there is going to be a U.S. dollar gold price reset, designed to bolster the collateral value of the 8,134 metric tonnes believed to exist in the U.S. treasury.

All of the chart formations on the planet will be meaningless if we get another "Gold Reserve Act" like the one passed on Jan. 30, 1934, whereby Franklin Roosevelt signed into law (after it was passed in Congress) a unilateral change in the dollar-denominated price of gold. The 69.33% increase took the price from US$20.67 to $35 where it remained until 1971, when Nixon ended the convertibility of dollars to gold, giving rise to the Great Bull Market of the 1970s and the crippling stagflation that plagued that period.

I have shown subscribers on numerous occasions how 8,134 metric tonnes could be used to collateralize the U.S. national debt, but at $1,886 per ounce, it has a dollar value of approximately $540 billion. As a percentage of the post-Covid national debt (estimated to be approaching $45 trillion in 2021), the value of the gold held by the U.S. is 1.21%, which does not qualify as adequate collateral for such a gargantuan debt structure.

However, if you increase the price of gold by 8.26 times, the value of the gold rises to 10% of $45 trillion, which then may qualify as "adequate collateral." Incidentally, that would infer a gold price of $15,578 per ounce. Just as no one can even imagine that happening, no one thought it possible in 1934 for the gold price to rise 69.33% with the stroke of an executive order pen.

Silver (US$26.03): Unlike gold, silver broke out of the four-month correction on Dec. 16 and now looks poised for a test of the 2020 highs around US$30/ounce. The silver stocks, particularly the juniors, are rapidly approaching their 2020 peaks, thus confirming the action in the March futures. 2021 could be the year that the gold-to-silver ratio (GSR) gets down to the May 2011 lows, around 42 from the current level of 72.

The superlative action in silver here in December was best explained by a colleague whose is my age but whose son is well-versed in the mindsets of the Millennials and the Gen-Xers. It seems that they view silver as a modern-day elixir, very pro-technology, very pro-environmental and basically "cooler" than gold. They are steadfast in their unshakeable belief that Bitcoin has seized the throne of "value-protector" from gold but, surprisingly, not silver. Bitcoin can never replace silver for its tech-friendly attributes, and the result is a tsunami of newer, younger investors clamouring to build portfolios stuffed with both Bitcoin and silver.

Now, make no mistake—purists like your author cannot even tiptoe into that cesspool of debate because, well, I am a dinosaur with Jurassic biases and Pleistocene thought processes. The grey hair in my beard would turn back to strawberry blond in a Mesozoic minute if I were forced to debunk the notion that gold's 5,000-year utility of immunity to currency destruction has today somehow ended.

However, as a shareholder of silver developers, it is incumbent upon me to put aside my biases and focus on the possible impact of millions of new, social-media-driven investors swarming down upon the global supply of silver and of the companies that explore for, develop and mine it. It embraces a new paradigm of strategic thinking and a timely unshackling of ideological bonds.

Uranium (US$29.90): The big surprise in the final stretches of 2020 was the explosion in the uranium stocks. With the price still unable to scale the US$30/lb. level, 90% of the uranium developers that trade on the North American exchanges cannot make a plug nickel of profit from their mining operations. However, like 2018, when the uranium cheerleaders were trotting out charts of new reactor construction and mine closures around the world, it turned out to be a stock play rather than a commodity or energy play, because by mid-2019, the prices of all of the major players had settled back down to earth once again, confirming that the rumors of uranium's untimely death were, in fact, true.

After a bear market that began in 2008, there has been a 95% reduction in the number of uranium names in twelve years, giving credence to the notion that maybe this time it truly is different. I remain intrigued and alert.

Copper (US$3.65/lb.): In past bull markets, copper has been anything but a "sexy metal;" it almost always finds its way into macroeconomic debates rather than the focus of staking rushes or area plays. However, copper has quietly moved in stealth-like fashion from the COVID Crash March lows under US$2.00/lb. to the best weekly close in years at US$3.64/lb., marking a 67.2% advance and soundly thrashing gold, whose 27.29% move pales by comparison.

While currently seriously overbought, the charts shown below reveal a vastly different narrative than the "subdued inflation" meme being trotted out by Jerome Powell and his central bank inflation collaborators. To be sure, the weak U.S. dollar is the culprit behind it, but if you listen to the copper bulls, electric vehicle production is adding significant demand-pull pressures on pricing, and as I mentioned earlier regarding this new wave of investors dominating the blogosphere and twitterverse, if they believe that copper is an eco-friendly commodity, they will gravitate toward it and any junior developers and explorers with a good story and social media presence.

I draw your attention to Dr. Copper (called so because it is said to be the one commodity with a PhD in economics) because my two premier holdings (Getchell Gold Corp. and Norseman Silver) are both exploring properties that have significant potential for copper deposits. Now, before the precious metals devotees go running from the room, it should be remembered that in Rouyn, Quebec, the Horne Mine was a copper mining operation that had gold as a byproduct. Over its life, in addition to recovering 1.13 million tonnes of copper, the mine produced 260 tonnes (11.6 million ounces) of gold, making it one of the biggest gold producers in Canadian history.

Copper-gold porphyry deposits are not uncommon in Nevada nor British Columbia, and due to their scale, they are prized possessions. For this reason, it is important to keep a close watch over copper prices and the upcoming exploration programs for our two top juniors.

Senior Gold Miners ETF (GDX:US) (US$36.58): Due to the boring nature of this chart, I am standing aside but prefer Barrick Gold Corp. (ABX:TSX; GOLD:NYSE) as a stand-alone play.

Junior Miner ETF (GDXJ:US) (US$54.42): The junior gold miners have just experienced a complete capitulation blow-off in November, which I identified as a bottom on Nov. 30 and initiated purchases of Barrick Gold and Eldorado Gold Corp. (ELD:TSX; EGO:NYSE). Although the GDXJ has a better set-up than GDX, November's wretched performance was classically the newbie late-comers to the precious metals party dumping positions that they bought in July-August purely on momentum, and whether or not they have been switching to crypto, it is going to take a while for them to place their charred fingers back in the space.

Around mid-July, I began to reduce exposure to the senior and intermediate gold miners, and since the GDXJ no longer owns the micro-cap developer/explorers, I determined that these "little guys" were going to be very safe harbors in the event of a precious metals hurricane in the second half of the year (which there was). After eliminating both GDX and GDXJ from the GGMA 2020 Portfolio, I moved to overweight positions in gold and silver micro-cap developer/ explorers, where I hid from November's gold and silver exchange-traded fund (ETF) bloodbath. I am able to head into 2021 with the two largest holdings closing out the year up 183% and 400% year-to-date (YTD) and which comprise over 62% of the portfolio. Comparing those returns to GDX (up 24.93% YTD) and GDXJ (up 28.77% YTD), the performance numbers certainly validated my move to the developer/explorer group and explain the 200%-plus return on investment (ROI) for the GGMA 2020 Portfolio.

A Stellar Year

Two recent additions to the portfolio were Barrick and Eldorado, both purchased on the exact day they bottomed (Nov. 30), which now represent laser-beam substitutes for the Senior and Junior Gold ETFs. I elected to avoid the risk of tax-loss selling and portfolio rebalancing, which would be more pronounced in the ETFs than in the two names I selected, but once December is over, the ETFs will undoubtedly rally.

Looking back to the year 2020, I had some good calls, and I had some not-so-good calls. Calling the arrival of the bear market in late February turned out to be spot-on, but for the wrong reason—I did not believe that the pandemic would throw the politicians into panic mode, which threw investors into panic mode, resulting in every central bank on the planet going into panic mode.

I called the bottom in gold and silver to the exact day (March 16) and in oil (April 22), but I missed the technology rally and I missed Bitcoin, two misses that I will continue to make as long as I am breathing. I should have avoided the volatility trade (UVXY:US) and the SPY short (SDS:US), but who would have thought back in July that the Dow Jones, the S&P 500, and the NASDAQ would see all-time highs with a U.S. and global economy in lockdown?

The upcoming year will be dominated by the impact of the vaccines upon the global population, but more importantly how these central planner politicians react. Despite an immune system that has worked pretty much without fail for several thousand years, past pandemics came and went without legislated lockdowns and economic madness.

However, the dominant theme in 2021 will continue to be debt, with the addition of another term for consideration—insolvency. Most markets around the world have been fanned and fueled by liquidity injections from both central banks (monetary) and government treasuries (fiscal), so markets have fully discounted a positive outcome for the vaccine and political responses. With stocks sporting valuations higher then 1929, I believe that they are priced for totalperfection, leaving them extremely vulnerable to disappointment.

The offset to that is the obsession carried by central banks toward stock prices; in the minds of the spigot-controllers, there can be no more corrections, and that is why shorting markets when the liquidity valves are set at "open" is a flawed strategy. You want to stay with the "short cash; long everything it can buy" strategy until there is rioting in the streets over food or gas prices. It is then, and only then, that monetary policy will turn hostile, and if the Fed is in the mood to tighten after twelve years of outrageously easy money, then you have to run for the hills, because cash will once again be king. For the near term though, the Fed has said they are not going to do anything hostile until 2023, and until the evidence proves otherwise, the status quo remains in place.

Specific to the performance of our junior developers and explorers will be execution. Management has to execute all of the steps required to add value, and if 2020 is any barometer for 2021 expectations, we should be in great shape.

Subscribers are now in possession of the GGM Advisory 2021 Forecast Issue, which includes another seventeen pages of commentary on the companies I own. If you wish to become a subscriber, direct message me on Twitter @MiningJunkie or email me at miningjunkie216@outlook.com.

Follow Michael Ballanger on Twitter @MiningJunkie.

Originally trained during the inflationary 1970s, Michael Ballanger is a graduate of Saint Louis University where he earned a Bachelor of Science in finance and a Bachelor of Art in marketing before completing post-graduate work at the Wharton School of Finance. With more than 30 years of experience as a junior mining and exploration specialist, as well as a solid background in corporate finance, Ballanger's adherence to the concept of "Hard Assets" allows him to focus the practice on selecting opportunities in the global resource sector with emphasis on the precious metals exploration and development sector. Ballanger takes great pleasure in visiting mineral properties around the globe in the never-ending hunt for early-stage opportunities.

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Disclosure:
1) Michael J. Ballanger: I, or members of my immediate household or family, own securities of the following companies mentioned in this article: Getchell Gold, Barrick Gold, Eldorado Gold and Norseman Silver. My company has a financial relationship with the following companies referred to in this article: Getchell Gold and Norseman Silver. I determined which companies would be included in this article based on my research and understanding of the sector. Additional disclosures are below.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Getchell Gold. Please click here for more information.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Getchell Gold and Norseman Silver, companies mentioned in this article.

Michael Ballanger Disclaimer: This letter makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This letter represents my views and replicates trades that I am making but nothing more than that. Always consult your registered advisor to assist you with your investments. I accept no liability for any loss arising from the use of the data contained on this letter. Options and junior mining stocks contain a high level of risk that may result in the loss of part or all invested capital and therefore are suitable for experienced and professional investors and traders only. One should be familiar with the risks involved in junior mining and options trading and we recommend consulting a financial adviser if you feel you do not understand the risks involved.

( Companies Mentioned: ABX:TSX; GOLD:NYSE, ELD:TSX; EGO:NYSE, GTCH:CSE, NOC:TSX.V, )

This Tiny Tech Stock Is Quietly Building a Huge Business in Air Quality

Source: Matt Badiali for Streetwise Reports   01/05/2021

Independent financial analyst Matt Badiali discusses how mCloud’s technology is making it possible for office buildings to reopen during the pandemic.

If you aren’t paying attention, you probably missed it.

Tiny C$55 million market cap technology company mCloud Corp.’s (MCLD:TSX) asset management solutions combine internet-of-things (IoT), cloud computing and artificial intelligence (“AI”). It manages all that through its service called AssetCare.

This is an AI-enabled service that connects to any IoT enabled device. The company uses AssetCare to improve energy efficiency for giant companies like Starbucks and Bank of America. It provides intelligent maintenance services to everything from wind turbines to natural gas systems. However, the application of AssetCare is nearly unlimited.

The applications of AssetCare continue to grow. mCloud closed $5 million in contracts for its services in the first week of December 2020. Those deals are in wind, communications and oil and gas. But the next big use for AssetCare is in a new area: building air quality.

Air quality in buildings is under new and intense scrutiny, thanks to the Covid-19 pandemic. A group of 239 international scientists published a letter in support of reducing aerosol particulates in the work place. The report prioritizes air quality and ventilation monitoring.

William Bahnfleth, chairman of the American Society of Heating, Refrigeration and Air Conditioning Engineers (ASHRAE) Epidemic Task Force, put out a statement regarding the need to change and monitor air quality in buildings:

Key elements of a strategy to limit the spread of the COVID-19 virus are to perform needed HVAC system maintenance, including filter changes, and to run HVAC equipment, prior to re-occupancy.

Air control and quality is critical for reopening buildings. That’s a huge opportunity for mCloud’s AssetCare. AssetCare’s AI can manage connected HVAC systems for air quality. It can provide a high standard of quality and assurance, which customers in New York and California recognize already.

Dr. Patrick O’Neill, mCloud’s President for North America had this to say:

This set of ten AssetCare subscription contracts is expected to be the first of many for mCloud in 2021. Businesses across New York and California are struggling to find an easy-to-implement solution to help them be compliant with new health regulations and reassure their customers and employees their buildings are safe—both are now required to get these thousands of businesses back to work.

mCloud’s AI-enabled Connected Buildings offering is the easiest solution for these operators, period. The unique and compelling economics offered by AssetCare and our partnership with local providers allow us to offer an unbeatable solution to these businesses who now have no choice but to adapt.

The list of new air quality customers includes high-profile restaurants, car dealers, gyms and other multi-location businesses in New York and California. There is no question that the list of new clients will grow. AssetCare can provide a major improvement in reducing the spread of Covid-19 and other airborne contaminants through improved maintenance and air quality monitoring.

On December 22, 2020, mCloud announced ten commercial buildings in New York signed subscription contracts with AssetCare.

AssetCare for Connected Buildings combines comprehensive air quality solution with IoT- and AI-powered building management. That results in both operational and energy efficiency improvements. The resulting cost savings help offset the cost of the service.

A huge benefit for clients is that AssetCare delivers direct, measurable business results. And the market for this service is already growing rapidly as state governments look for ways to reopen businesses in a safe manner.

In addition, the company just raised $4.7 million to pursue new opportunities for its AssetCare platform. That’s why mCloud is a technology stock you should review for your portfolio. Its AssetCare platform is changing the way many companies do business.

–Matt Badiali

Matt Badiali is a geologist and independent financial analyst. He spent fifteen years researching and writing about great investments inside the natural resources sectors. He can be reached at www.mattbadiali.net.

Sign up for our FREE newsletter at: www.streetwisereports.com/get-news

Streetwise Reports Disclosure:
1) Matt Badiali: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: mCloud. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: I am a consultant to mCloud. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned in the article are sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.

4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

( Companies Mentioned: MCLD:TSX,
)

Source: Matt Badiali for Streetwise Reports   01/05/2021

Independent financial analyst Matt Badiali discusses how mCloud's technology is making it possible for office buildings to reopen during the pandemic.

If you aren't paying attention, you probably missed it.

Tiny C$55 million market cap technology company mCloud Corp.'s (MCLD:TSX) asset management solutions combine internet-of-things (IoT), cloud computing and artificial intelligence ("AI"). It manages all that through its service called AssetCare.

This is an AI-enabled service that connects to any IoT enabled device. The company uses AssetCare to improve energy efficiency for giant companies like Starbucks and Bank of America. It provides intelligent maintenance services to everything from wind turbines to natural gas systems. However, the application of AssetCare is nearly unlimited.

The applications of AssetCare continue to grow. mCloud closed $5 million in contracts for its services in the first week of December 2020. Those deals are in wind, communications and oil and gas. But the next big use for AssetCare is in a new area: building air quality.

Air quality in buildings is under new and intense scrutiny, thanks to the Covid-19 pandemic. A group of 239 international scientists published a letter in support of reducing aerosol particulates in the work place. The report prioritizes air quality and ventilation monitoring.

William Bahnfleth, chairman of the American Society of Heating, Refrigeration and Air Conditioning Engineers (ASHRAE) Epidemic Task Force, put out a statement regarding the need to change and monitor air quality in buildings:

Key elements of a strategy to limit the spread of the COVID-19 virus are to perform needed HVAC system maintenance, including filter changes, and to run HVAC equipment, prior to re-occupancy.

Air control and quality is critical for reopening buildings. That's a huge opportunity for mCloud's AssetCare. AssetCare's AI can manage connected HVAC systems for air quality. It can provide a high standard of quality and assurance, which customers in New York and California recognize already.

Dr. Patrick O'Neill, mCloud's President for North America had this to say:

This set of ten AssetCare subscription contracts is expected to be the first of many for mCloud in 2021. Businesses across New York and California are struggling to find an easy-to-implement solution to help them be compliant with new health regulations and reassure their customers and employees their buildings are safe—both are now required to get these thousands of businesses back to work.

mCloud's AI-enabled Connected Buildings offering is the easiest solution for these operators, period. The unique and compelling economics offered by AssetCare and our partnership with local providers allow us to offer an unbeatable solution to these businesses who now have no choice but to adapt.

The list of new air quality customers includes high-profile restaurants, car dealers, gyms and other multi-location businesses in New York and California. There is no question that the list of new clients will grow. AssetCare can provide a major improvement in reducing the spread of Covid-19 and other airborne contaminants through improved maintenance and air quality monitoring.

On December 22, 2020, mCloud announced ten commercial buildings in New York signed subscription contracts with AssetCare.

AssetCare for Connected Buildings combines comprehensive air quality solution with IoT- and AI-powered building management. That results in both operational and energy efficiency improvements. The resulting cost savings help offset the cost of the service.

A huge benefit for clients is that AssetCare delivers direct, measurable business results. And the market for this service is already growing rapidly as state governments look for ways to reopen businesses in a safe manner.

In addition, the company just raised $4.7 million to pursue new opportunities for its AssetCare platform. That's why mCloud is a technology stock you should review for your portfolio. Its AssetCare platform is changing the way many companies do business.

--Matt Badiali

Matt Badiali is a geologist and independent financial analyst. He spent fifteen years researching and writing about great investments inside the natural resources sectors. He can be reached at www.mattbadiali.net.

Sign up for our FREE newsletter at: www.streetwisereports.com/get-news

Streetwise Reports Disclosure:
1) Matt Badiali: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: mCloud. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: I am a consultant to mCloud. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned in the article are sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

( Companies Mentioned: MCLD:TSX, )

Intrepid Shares Grow 40% on Positive Upward Trend for 2021 Trio and Potash Prices

Source: Streetwise Reports   12/31/2020

Shares of Intrepid Potash Inc. sprouted to a new 52-week high after the company reported that it anticipates greater demand and higher prices for its Trio and potash products in 2021.

Diversified mineral company Intrepid Potash Inc. (IPI:NYSE) yesterday announced its business and market outlook for 2021 along with updates regarding pricing for its potash and Trio® products.

The company reported on several recent developments in the commodity markets for its products. The firm indicated that potash targeted to agricultural markets has recently increased by $90 per ton, or 31%, above 2020 summer-fill pricing after a $40 per ton increase was just announced this month. Intrepid noted additionally that the present potash price into agricultural markets is now $65 per ton higher than the January 2020 winter-fill price.

The firm highlighted that the price for its Trio product supplied to agricultural markets increased by $60 per ton, or 27% above the 2020 summer-fill pricing after the latest $20 per ton increase in December of this year. The company pointed out that the price of Trio for agricultural customers at present is $50 per ton above the January 2020 winter-fill price.

In addition to the rise in prices in the agricultural markets, the firm stated that “the oilfield outlook continues to improve in the Northern Delaware Basin driven by an increase in drilling and fracking activity.” The company advised that Q1/21 and FY/21 forecasts for water volumes exceed those of the same time last year in its energy related business with NGL Energy Partners in the three-ranch area of mutual interest. Water demand seems to be growing in excess of the available supply and Intrepid hopes to benefit by exploiting the optionality in its water portfolio.

Intrepid Potash’s Executive Chairman, President and CEO Bob Jornayvaz remarked, “Good weather and compelling fertilizer economics have spurred strong early season demand for potash and Trio® in our domestic markets…A strong agricultural commodity environment across a wide range of crops that includes corn, soybeans, wheat, cotton, coffee and sugar, combined with a reduced potash supply has driven the improvements in the fertilizer market in recent weeks. After announcing the price increases in December, we quickly filled the rest of our Q1/21 order book before the higher price took effect and expect the benefits of higher pricing will be seen in the second quarter of next year. We continue to see good value across the fertilizer supply chain and have already sold select spot tons at the higher price levels.”

“We see strong growth in our oilfield business as operators on the Intrepid South Ranch and AMI have aggressively increased development plans, resulting in significant water requirements for 2021. Due to the amount of water needed for multi-stage fracs, we expect to exploit the inherent optionality in our water book, narrowing our focus to the best margin opportunities as the year progresses. We are also opportunistically evaluating the purchase of additional water to meet the demand of large-scale fracs and to serve customers beyond our currently available water rights. Infrastructure improvements have lowered our per barrel cost of water transfers compared to last year and position us well for the coming year,” Jornayvaz added.

Intrepid is a diversified mineral company headquartered in Denver, Colo. The firm is a supplier of potassium, magnesium, sulfur, salt, and water products essential for commercial enterprise in agriculture, animal feed and the oil and gas industry. The company noted that it is the only U.S. producer of muriate of potash, which is a critical nutrient for use in both fertilizer and as an additive to animal feed products. Intrepid’s branded specialty fertilizer is called Trio®, which is a 100% natural langbeinite that is certified and approved for organic farming. Trio contains three key nutrients, potassium, magnesium, and sulfate, that are formulated and delivered in a single granule. For the energy industry, the firm provides brine, magnesium chloride, water and various oilfield products and services. Intrepid employs solar evaporation processes in its production of potash, which it states lowers cost and reduces environmental impact. The company noted that it operates three solar solution potash facilities and one conventional underground Trio mine.

Intrepid Potash started the day with a market cap of around $235.8 million with approximately 13.29 million shares outstanding and a short interest of about 1.8%. IPI shares opened about 5% higher today at $18.61 (+$0.87, +4.90%) over yesterday’s $17.74 closing price and reached a new 52-week high price this morning of $28.23. The stock has traded today between $18.61 and $28.23 per share and is currently trading at $24.81 (+$7.07, +39.85%).

Sign up for our FREE newsletter at: www.streetwisereports.com/get-news

Disclosure:
1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

( Companies Mentioned: IPI:NYSE,
)

Source: Streetwise Reports   12/31/2020

Shares of Intrepid Potash Inc. sprouted to a new 52-week high after the company reported that it anticipates greater demand and higher prices for its Trio and potash products in 2021.

Diversified mineral company Intrepid Potash Inc. (IPI:NYSE) yesterday announced its business and market outlook for 2021 along with updates regarding pricing for its potash and Trio® products.

The company reported on several recent developments in the commodity markets for its products. The firm indicated that potash targeted to agricultural markets has recently increased by $90 per ton, or 31%, above 2020 summer-fill pricing after a $40 per ton increase was just announced this month. Intrepid noted additionally that the present potash price into agricultural markets is now $65 per ton higher than the January 2020 winter-fill price.

The firm highlighted that the price for its Trio product supplied to agricultural markets increased by $60 per ton, or 27% above the 2020 summer-fill pricing after the latest $20 per ton increase in December of this year. The company pointed out that the price of Trio for agricultural customers at present is $50 per ton above the January 2020 winter-fill price.

In addition to the rise in prices in the agricultural markets, the firm stated that "the oilfield outlook continues to improve in the Northern Delaware Basin driven by an increase in drilling and fracking activity." The company advised that Q1/21 and FY/21 forecasts for water volumes exceed those of the same time last year in its energy related business with NGL Energy Partners in the three-ranch area of mutual interest. Water demand seems to be growing in excess of the available supply and Intrepid hopes to benefit by exploiting the optionality in its water portfolio.

Intrepid Potash's Executive Chairman, President and CEO Bob Jornayvaz remarked, "Good weather and compelling fertilizer economics have spurred strong early season demand for potash and Trio® in our domestic markets...A strong agricultural commodity environment across a wide range of crops that includes corn, soybeans, wheat, cotton, coffee and sugar, combined with a reduced potash supply has driven the improvements in the fertilizer market in recent weeks. After announcing the price increases in December, we quickly filled the rest of our Q1/21 order book before the higher price took effect and expect the benefits of higher pricing will be seen in the second quarter of next year. We continue to see good value across the fertilizer supply chain and have already sold select spot tons at the higher price levels."

"We see strong growth in our oilfield business as operators on the Intrepid South Ranch and AMI have aggressively increased development plans, resulting in significant water requirements for 2021. Due to the amount of water needed for multi-stage fracs, we expect to exploit the inherent optionality in our water book, narrowing our focus to the best margin opportunities as the year progresses. We are also opportunistically evaluating the purchase of additional water to meet the demand of large-scale fracs and to serve customers beyond our currently available water rights. Infrastructure improvements have lowered our per barrel cost of water transfers compared to last year and position us well for the coming year," Jornayvaz added.

Intrepid is a diversified mineral company headquartered in Denver, Colo. The firm is a supplier of potassium, magnesium, sulfur, salt, and water products essential for commercial enterprise in agriculture, animal feed and the oil and gas industry. The company noted that it is the only U.S. producer of muriate of potash, which is a critical nutrient for use in both fertilizer and as an additive to animal feed products. Intrepid's branded specialty fertilizer is called Trio®, which is a 100% natural langbeinite that is certified and approved for organic farming. Trio contains three key nutrients, potassium, magnesium, and sulfate, that are formulated and delivered in a single granule. For the energy industry, the firm provides brine, magnesium chloride, water and various oilfield products and services. Intrepid employs solar evaporation processes in its production of potash, which it states lowers cost and reduces environmental impact. The company noted that it operates three solar solution potash facilities and one conventional underground Trio mine.

Intrepid Potash started the day with a market cap of around $235.8 million with approximately 13.29 million shares outstanding and a short interest of about 1.8%. IPI shares opened about 5% higher today at $18.61 (+$0.87, +4.90%) over yesterday's $17.74 closing price and reached a new 52-week high price this morning of $28.23. The stock has traded today between $18.61 and $28.23 per share and is currently trading at $24.81 (+$7.07, +39.85%).

Sign up for our FREE newsletter at: www.streetwisereports.com/get-news

Disclosure:
1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

( Companies Mentioned: IPI:NYSE, )

Reliance, BP begin production from deepwater gas field off India’s east coast

The beginning of production at what is now Asia’s deepest offshore natural gas field will increase the share of natural gas India’s energy basket. Become part of the MetalMiner LinkedIn group and stay connected to trends we’re watching and interesting metal facts. India set to strengthen natural gas production A few days ago, Reliance Industries…

The post Reliance, BP begin production from deepwater gas field off India’s east coast appeared first on Steel, Aluminum, Copper, Stainless, Rare Earth, Metal Prices, Forecasting | MetalMiner.

The beginning of production at what is now Asia’s deepest offshore natural gas field will increase the share of natural gas India’s energy basket. Become part of the MetalMiner LinkedIn group and stay connected to trends we’re watching and interesting metal facts. India set to strengthen natural gas production A few days ago, Reliance Industries...

The post Reliance, BP begin production from deepwater gas field off India’s east coast appeared first on Steel, Aluminum, Copper, Stainless, Rare Earth, Metal Prices, Forecasting | MetalMiner.