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Outstanding shares below 1 billion is nothing for a blue chip miner in the making.The shares are a steal thanks to a fear of a lithium glut that isn't going to happen for a decade or more and misplaced concern about dilution by small and inexperienced investors.Smart money is buying the dips. Whales must want in.Flippers are providing good cover for a stock that seen it's lows.Lithium has likely seen it's lows.A slow and steady rise for now.But things can heat up quickly with explosive moves.When lithium starts making new highs NMKEF could move towards $10.00 quickly.
The Lithium Boom Has Only Just Begun
https://www.prnewswire.com/news-releases/the-lithium-boom-has-only-just-begun-884293957.html
NEW YORK, October 2, 2018
Despite short-term gyrations, the outlook for lithium continues to shine. Electric mobility is still only in its infancy. Revolutionizing how we commute and power our lives, the inevitable tsunami of electric vehicles and burgeoning demand for energy grid storage are driving lithium demand for the foreseeable future.
The electric revolution is still in its infancy.
Lithium demand expected to triple in next seven years.
Lithium stocks could surge with demand.
Junior miners offer big upside potential.
Anticipation of an exponential increase of electric vehicles coupled with expanding demand for lithium-ion (L-ion) batteries drove the lithium mining sector to reach all-time highs last year. Lithium shares swooned at the beginning of 2018 on a negative oversupply forecast by Morgan Stanley analysts. That forecast has since been widely debunked by a broad range of lithium industry experts and given only a 1 percent chance of happening. As the world inexorably advances into the new electric power paradigm, the lithium sector should experience an excellent decade and produce outsized returns. Demand for raw battery materials continues to grow at an unprecedented pace, and lithium miners could easily rack up further gains and reach new highs. With large upside potential, evermore attention is turning to junior miners such as QMC Quantum Minerals Corp. (OTC: QMCQF) (TSX-V:QMC) (FSE:3LQ) (QMCQF Profile). The company is intent on building shareholder value through the acquisition, exploration and development of natural resource properties that contain either high-quality lithium or silver, gold, nickel, copper and zinc opportunities. Historically validated, QMC's 100 percent-owned flagship project, the Irgon Mine Project,holds a potential motherlode of lithium. In addition, major lithium producers such as Albemarle Corporation (NYSE: ALB) and Sociedad Quimica y Minera S.A. (NYSE: SQM) plan production increases, and Nemaska Lithium, Inc. (OTC: NMKEF) (TSX: NMX) is also in the hunt to supply companies such as Tesla, Inc. (NASDAQ: TSLA) and myriad other end users seeking a secure supply chain.
Lithium Demand May Exceed Expectations
Reflecting the scale of the impending energy revolution, respected independent commodity forecaster Roskill tripled its demand forecast for lithium through 2026. Two years ago, Roskill forecast demand would increase to 328,000 metric tons of lithium carbonate equivalent by 2026; now the commodities expert has revised the outlook and expects demand to explode to more than 1 million metric tons by then. However, lithium supply expectations fall far short of forecasts. In 2018, the total lithium production will total only around 280,000 metric tons of lithium carbonate equivalent - a far cry from what's needed.
A wild card in the quest for lithium feedstocks is China, which already controls 55 percent of global lithium-ion battery production. China plans to deliver about 3.5 times more gigawatt-hours of battery cells a year than the Tesla Gigafactory and is expected to command 65 percent of all production by 2021. China also has been pushing hard for clean energy and intends to flood highways with 5 million electric vehicles by 2020. As electric autos and energy storage solutions surge, indications are that lithium may soon become the most important energy commodity in the world.
Juniors Should Shine
Many believe that the majors just won't be able to produce enough lithium to meet global demand. Select junior miners are likely to be the beneficiaries and could produce exceptional returns.
Utility Storage Solutions
Lithium demand could skyrocket even higher than anticipated. A Wall Street Journal article revealed an enormous but seldom recognized lithium demand driver. Multiple states and municipalities in conjunction with utilities across the country are revamping antiquated electric grids and utilizing high-density Li-ion energy storage batteries to make the grid more efficient. Utility companies are increasingly storing energy in neighborhood battery junction boxes during off-peak, using it during peak demand and avoiding expensive peak demand electricity.
Leading global electricity industry expert GTM Research published a report on the state of the U.S. energy storage market. The study projects that in just three years, deployments of stored energy in residential, nonresidential and utility systems will grow to more than 10 times greater than current levels. Such a drastic increase in deployment is expected to lead to an energy storage market worth $2.8 billion.
If there are any doubts about lithium demand, look at any lithium mining company - every single one is trying to rapidly expand production. The lithium boom has just begun, and it won't end any time soon. Strategically positioned portfolios in the lithium sector should excel well into the future.
Want To Buy A New Car For Free In 10 Years? Buy An Electric Car Today
https://cleantechnica.com/2018/09/30/want-to-buy-a-new-car-for-free-in-10-years-buy-an-electric-car-today/
September 30th, 2018
In Canada, buying an electric car means your next car is “free.” Or at least, that’s what a just released report from the 2 Degrees Institute (2DI) of Canada indicates.
Their methodology is transparent and good. They gathered gasoline, electricity, and vehicle maintenance costs for each province from credible sources. They selected basic family cars available in Canada in both internal combustion and electric drivetrain options, the Volkswagen Golf and the Kia Soul. No Tesla Model S100D drag racers in the group, just cars that average families might own.
They looked not at the annual distance individual cars were driving, but at household mileage to ensure that families would have information most relevant to their needs. They looked at both a 10 year and 250,000 kilometer (155,000 mile) lifespan of cars to ensure that they were not artificially picking a sweet spot.
What they found surprised even them.
We knew that EVs were less expensive to operate, but after running the numbers, we were completely surprised by how substantial the savings were.
— Prof. James Pawley, University of Wisconsin-Madison
Certainly, one of the things which surprised me was the claim that none of the top 10 repairs done on cars applied to electric cars at all. It seemed unlikely, so I reviewed the source and it not only seems credible, the statement is true as well.
Catalytic converters? Not on an EV.
Evaporative Emissions (EVAP) Purge Control Valves. Nope.
Fuel injectors? That’s just silly.
Loose fuel cap? Sure.
Ignition coils and spark plugs? Wait, do cars still have those? It turns out that they do — they are just buried in the engine and are one of the things you generally are supposed to let professionals with computerized toolkits play with. Gapping your own plugs is apparently a thing of the past.
So, how big were the savings? About $27,000 (Canadian) for fuel and maintenance over the lifespan, more than the price of many new cars in Canada.
This varied somewhat by province, with oil & gas–dominated Alberta seeing by far the highest savings of roughly $36,000, partly because people in that province drive the furthest per year. Tiny Prince Edward Island of Anne of Green Gables fame saw the lowest savings of around $22,000 over 10 years.
Of course, there are inevitable questions about the underpinning assumptions of the report, but it’s transparent about those as well. The initial cost of vehicles is well-explored with per-province subsidies. Unfortunately for the report, something which will likely be addressed, the new conservative Ontario government eliminated electric car subsidies along with a raft of other positive programs, including 758 renewables contracts, just as the report was released.
Similarly, the potential for battery replacement was explored. Their choice to not include battery replacement costs in the 10 year lifespan seems reasonable, but could be argued. For a Tesla Model 3, a battery around the size of those in the cars in the study is projected to cost around $6,500 (US) or about $8,400 (Canadian). That would eat into the economic case somewhat, but would still leave close to $19,000 (Canadian) to put toward the next car. EVs will be cheaper then and batteries likely more robust as well.
The report is another data point showing that a family’s total cost of ownership of electric cars is better than for gasoline or diesel vehicles. And with all of the other benefits — including health, much lower greenhouse gas emissions, and typically greater safety — it’s not hard to see that the shift to electric cars will only accelerate.
Positive surprises like "Tesla Is 2 Years Ahead Of Schedule On Gigafactory 1" October 1st, 2018
are to be expected.
https://cleantechnica.com/2018/10/01/tesla-is-2-years-ahead-of-schedule-on-gigafactory-1/
Tesla’s Gigafactory 1 in Nevada is solidly on track to achieve a battery production volume of 35 GWh per year (annualized run rate) by the end of 2018. This is two years ahead of the original 2020 target date for achieving these volumes.
When the Gigafactory was first announced in early 2014, the plan was to hit 35 GWh of battery production in 2020.
a couple of months ago (July 2018), news emerged that the accelerated Gigafactory production targets were indeed within reach by the Tesla–Panasonic partnership. Then, just last week, Zach covered the latest updates from Yoshio Ito, head of Panasonic’s automotive business. The news was of the further bringing forward the July plan, to even more quickly add 3 new production lines that were previously slated for “the the end of the year [2018].” This further advance means that the lines will be installed and operating well before the end of the year, thus giving real credence to the 35 GWh run rate being achievable by the end of 2018.
It’s worth pausing to celebrate this rare but strong example of Tesla being two full years ahead of schedule on the timeline it originally set out for the Gigafactory back in 2014. From an initial 2020 target, we now find the 35 GWh annualized production volume goal looks set to be achieved by the end of 2018. That’s 4 years to reach a goal that was initially planned to require 6 years.
Tesla and Elon Musk have come in for a lot of flack recently, but the progress on the ground at the Gigafactory should serve to remind us that — away from the negative press and frequent skepticism about the revolutionary company’s broader mission — Tesla is achieving remarkable goals to accelerate the move towards sustainable transportation and energy.
Norway's EV success shows the explosive future straight ahead.
https://electrek.co/2018/10/01/electric-vehicle-sales-new-record-norway-tesla/
Electric vehicle sales achieve new record in Norway with 45% of new cars being all-electric and 60% plug-in
Fred Lambert
- Oct. 1st 2018
The new car sales numbers for September from Norway are in and the country, which is already known for spearheading electrification, is reaching new levels of electric domination and low emission average.
10,620 new passenger cars were registered in Norway last month. About 45% of them were all-electric vehicles and the number goes up to 60% when including plug-in hybrids, according to official registration data.
It’s a new record for the country.
Average CO2 emissions of new cars registered are now at a record low of 55g per km, which is an impressive 16g per km lower than in September 2017.
Øyvind Solberg Thorsen, director of the Road Traffic Advisory Board, commented:
“Such a large increase in electric cars caused a record low CO2 emissions of 55g/km. Although we in Norway are accustomed to average CO2 emissions falling from month to month, this is the lowest level we have ever measured.”
Unsurprisingly, diesel car sales are down, but all-electric vehicles sales also appear to be getting market shares from plug-in hybrids.
Tesla contributed massively to all-electric vehicle deployment in the country last month with just over 2,000 new registrations.
As we previously reported, Tesla tried to stabilize its monthly deliveries in the country after some significant issues.
It appeared to be successful at doing so during the second quarter, but they went back to their old habit of pushing deliveries into the last month of the quarter for Q3.
Tesla delivered about 2,300 cars in the country during the third quarter and over 2,000 of them were delivered in the last month.
Update: This article previously didn’t represent the hybrid/PHEV split properly.
ELECTREK’S TAKE
We are kind of getting used to Norway breaking new records for electric vehicle adoption, but it is still quite impressive.
It would be overlooking a massive success to just say that it such a small market that it doesn’t matter much.
Forget countries or even states, no city has managed this kind of EV adoption. It’s truly unprecedented.
Mostly because they are doing it with limited options on the market. They get more EV options than your average market, but it is still somewhat limited.
Can you imagine what will happen when the Model 3 is available? When the Audi e-tron is available? And all those other all-electric vehicles coming to market in the next 2-3 years?
Norway aims for all new cars to be all-electric by 2025. I think they will hit that goal easily. The last few percentage points are going to be hard, but I see them getting to ~90% by 2020.
News: Project Construction Update
https://www.bakersfield.com/ap/national/nemaska-lithium-provides-project-construction-update/article_a4d0f4d2-0639-5425-b752-b37855da3aee.html
Highlights
# Project construction at both sites currently on track with timeline and budget # Concentrate production expected to start in H2 2019 with lithium salts production expected in H2 2020 # $272.4M or 31% of the total project budget has been committed
QUÉBEC CITY, Quebec, Oct. 01, 2018 (GLOBE NEWSWIRE) -- Nemaska Lithium Inc. (“Nemaska Lithium” or the “Corporation”) (TSX: NMX) (OTC: NMKEF) is pleased to provide a construction project and development timeline update for its Whabouchi mine and electrochemical plant in Shawinigan (the “project”). Guy Bourassa, President and CEO of Nemaska Lithium will be hosting an online conference call on Monday, October 1, 2018 at 11 am EDT. The webcast can be accessed at https://edge.media-server.com/m6/p/nerewhjs and the associated presentation will be available later today for download at https://www.nemaskalithium.com/en/investors/webcast-call/. Dial-in numbers are US/CANADA Participant Toll-Free Number: (866) 353-6129 or US/CANADA Participant International Number: (409) 217-8084. The participant access code is 4097457.
As regards occupational health and safety, the Corporation is pleased to report that, up to this date, there has been no lost time due to injury during the 149,367 construction and engineering hours worked at both Whabouchi and Shawinigan sites.
Following the finalization of the project financing structure on May 30, 2018, and receipt of the first tranche payment (USD $75M) from the Orion Stream on August 23, 2018, the construction is progressing as planned and within anticipated budget allowances at both Whabouchi and Shawinigan locations.
The Corporation will report, along with the dissemination of its quarterly financial results, on the evolution of the project compared to construction schedule and budget. As of September 1, 2018, a total of $272.4M or 31% of the total project budget of $874.7M, including contingency, has been committed. The total budget of $874.7M includes $73.5M already invested by Nemaska Lithium as at November 30, 2017 and identified as sunk costs in the 2018 Feasibility Study.
Guy Bourassa, President and CEO of Nemaska Lithium said “Overall, I am pleased that we are progressing according to plan and within our budget, which includes a contingency allocation of approximately $100M, that was built into the budget as capital investment during the course of the Project. Contingency expenditures are tracking approximately 30% lower than the budget forecast as at September 1, 2018. Given that a large portion of the direct costs have already been committed, this leave more contingency that can be allocated to the indirect and owners’ costs. In addition, to the contingency built in the budget, we have deposited $40M into a restricted bank account as a cost overrun facility.”
All amounts are in Canadian dollars Expenditures and commitments as of September 1, 2018 ----------------------------------------------------------------------------------------------------------- As at Sept 1, 2018 Description NI-43-101 -------------------- NI 43-101 Budget Estimate at Variance Budget Commitments Incurred remaining commitments completion (EAC) as at Sept. 1, 2018 ----------------- --------- ----------- -------- --------------------- ---------------- ------------------- Whabouchi $303.6M $146.3M $93.0M $167.3M $313.6M $10.0M Mine Site ----------------- --------- ----------- -------- --------------------- ---------------- ------------------- Shawinigan Electrochemical $470.8M $126.1M $41.9M $355.3M $481.4M $10.6M Plant ----------------- --------- ----------- -------- --------------------- ---------------- ------------------- Contingency $100.3M $79.7M $79.7M $(20.6M) ----------------- --------- ----------- -------- --------------------- ---------------- ------------------- TOTAL WHABOUCHI & $874.7M $272.4M $134.9M $602.3M $874.7M SHAWINIGAN ----------------- --------- ----------- -------- --------------------- ---------------- -------------------
As for the purchasing packages for both site, 44% of the budget has been committed for the Whabouchi mine and 23% for the Shawinigan electrochemical plant, putting Nemaska Lithium in line to complete the project construction per the timeline. The mine construction has a 12 to 15 months schedule from the date of this release, with concentrate production expected to commence in the second half of 2019. The electrochemical plant has a 24 month construction schedule from the date of this release, with production estimated to begin in the second half of 2020.
The detailed engineering for the Whabouchi mine site, excluding the electrical engineering, is 76% complete with the electrical engineering estimated to be 37% complete. Detailed engineering at Shawinigan is 20% complete and the electrical engineering has yet to start. Engineering at both sites is tracking to schedule, per the above production timeline targets.
At the Whabouchi mine site, procurement of the main equipment is completed. In addition, at Shawinigan, 10% of the equipment procurement packages have been committed representing 52% of the equipment budget. This equipment includes Flash Calciner, Acid Bake Kiln, Lithium Sulfate preparation equipment, Electrolysis, Sulfuric Acid Re-concentration equipment, Crystallization, Evaporation, Drying and Bagging equipment.
Yves Painchaud, Construction Project Manager of Nemaska Lithium, commented, “We are very satisfied with the pace of construction at Whabouchi, which is progressing rapidly in order to complete the pouring of the concrete for certain buildings and major equipment before winter. We are aiming at closing the buildings for the garage, the ore sorters and crushing in January allowing for equipment installation delivered during winter. The pouring of concrete in the concentrator building is also progressing very well and we are on schedule for the installation of the structural steel within. In Shawinigan, the site preparation is moving forward at the forecasted pace. The flash calciner area, which is located outside the main building, is being prepped and removal of the concrete slab is complete. We are preparing the area to start the piling and foundations work needed for the flash calciner. Work within the two existing buildings is also progressing at the anticipated pace and we are on schedule to have the building ready to receive equipment for the electrochemical plant. We are also making significant progress on the construction of the new administrative office in Shawinigan. The scheduled move-in date is before year-end.”
Mr. Painchaud is a senior mechanical engineer with more than 30 years of project construction experience in Québec. He has held numerous senior leadership positions throughout his career.
Whabouchi Project Construction
Photos accompanying this announcement are available at http://www.globenewswire.com/NewsRoom/AttachmentNg/02a3b2a3-00cf-49c4-9679-bce497330e2f
http://www.globenewswire.com/NewsRoom/AttachmentNg/be1edfe8-82a6-4e58-b561-45a3627ef124
http://www.globenewswire.com/NewsRoom/AttachmentNg/b4384c5c-74dc-47bd-81da-e276ef62e37f
http://www.globenewswire.com/NewsRoom/AttachmentNg/11399e00-91ca-49b1-bee2-f6400afb87aa
http://www.globenewswire.com/NewsRoom/AttachmentNg/a60cc96d-5041-4b15-8456-341013995737
Shawinigan Project Construction
Photos accompanying this announcement are available at
http://www.globenewswire.com/NewsRoom/AttachmentNg/79467658-0e59-43ea-8572-68a9be4d2bd0
http://www.globenewswire.com/NewsRoom/AttachmentNg/f2f0385e-044e-47b5-a7e3-d08f9135edfc
Yep .70's in 2 weeks is likely.EOM
.65-.95 base building Oct-Jan is likely.EOM
I haven't forgotten much and I have been participating in and learning about the markets for over 40 years.NMKEF will see $50.00 in 10 years.
I know stuff lots and lots of stuff.LOL
Cheers
The shrinking pool of stocks trend isn't going change in a heartbeat.
We have been in a bubble market for years.
NMKEF is a magnet for money looking to reduce bubble market exposure.When NMKEF hits $50.00 we can discuss the bubble potential from there.For now this very real and powerful transition has many years to go.
Have a good one!
If you understand the bullish implications of a growing world demand for high quality stocks and a declining availability it's not hope.Did you read the article?Price is driven by supply and demand.Money is looking for high quality investments and they are looking at a shrinking pool of good choices.NMKEF is beyond a good choice but is in a sector that is poorly understood.NMKEF is a blue chip in the making in a must have sector with strong future fundamentals.The team has the experience and knowledge to ride this powerful transition and build on their successes with a cash generating machine.Lithium could easily rise to 25,000 -30,000 and stay there for an extended period of time.The team will have to self destruct and shoot themselves in the foot to not see NMKEF achieve $50.00 in the next ten years.The oil age is dying and upside surprises are to be expected from here as lithium battery demand gains momentum.The fundamentals are in place and they are improving every day for NMKEF.
up 5.8% Nice!EOM
Volume: 389,405 @ 1:49:42 PM EDT ET Nice!EOM
Average Volume 172,000.....272,000 already today.EOM
NMKEF volume is looking better lately.EOM
The U.S. stock market float is shrinking not NMKEF's but the bullish effect of a shrinking pool of high quality stocks will be bullish for NMKEF and be more important than the recent and final dilution so many are focused on.We may see NMKEF volume increase and surpass the Canadian listing.This is a very exciting situation.
NMKEF is a One Hundred-Bagger from here(.50-50.00) for solid fundamental reasons including SHRINKING POOL SIZE OF U.S. PUBLIC FLOAT and a market rotation from Growth to Value.NMKEF has 2 bullish major supply factors going for it.
There is limited public stock supply and limited lithium supply.
Yes that's right the entire U.S. public float is dramatically shrinking and NMKEF's dilution solution has been discounted and will be a blessing from this point forward as demand for NMKEF is going be strong for the next 10-20 years.
Out of the 3 hot sectors of cryptocurrency,cannabis and lithium only lithium has the long term advantage of limited supply.And lithium is much more necessary for a sustainable future than crypto or pot.
There is a limited supply of lithium and a shrinking supply of quality public companies with healthy fundamental value.NMKEF is a huge WIN!
==========================================================
This is a great read about the shrinking public float of U.S. stocks and the powerful bullish trend to continue because of this key factor.
Here's a quote:
"Stock markets have in recent years been shrinking by listings (but not by market cap). According to data from the Center for Research in Security Prices at the University of Chicago Booth School of Business in 1996, there were actually 8,023 public listed US corporations. This has been reduced to 3,627 by 2016 or a 55 reduction%.
"Going back 40 years to 1976 (prior to the dotcom explosion in IPOs which occurred in the 90's) the US had 4943 public listings. This is still a 27% reduction in publicly listed firms over a 40 year period. Meanwhile the population of the United States has grown nearly 50 percent since 1976, the drop is even starker on a per-capita basis where there were 23 publicly listed companies for every million people in 1975, but only 11 in 2016,"
The reasons are multi fold and include:
Mergers & Acquisitions,
Dramatic reduction in US IPOs,
Increasing Buyouts and Control Blocks by Private Equity.
A few bankruptcies along the way (and more to come when Zombie Corporations are forced to face realities when higher interest rates come home to roost)
Also many companies are going “all the way into oblivion" by buying up all of their shares over time and "Going Private" or "Dark".
The Stealth Reason Why the Stock Market Keeps On Rising
http://www.marketoracle.co.uk/Article63166.html
VW Launches New “Electric For All” Campaign – 10 Million EVs!
SEP 18 2018
BY
DOMENICK YONEY
https://insideevs.com/vw-electric-for-all-campaign/
Yes the Lithium Hydroxide production on site is the cherry on top of this top notch investment.
New PowerPoint Presentation:
http://www.nemaskalithium.com/assets/documents/docs/NMX_CorporatePresentationSept%2004_FinalEN.pdf
Excellent!
Have we reached peak pessimism yet?EOM
"The lithium raw material in a Li-ion battery is only a fraction of one cent per watt, or less than 1 percent of the battery cost. A $10,000 battery for a plug-in hybrid contains less than $100 worth of lithium."
https://batteryuniversity.com/learn/article/availability_of_lithium
BU-308: Availability of Lithium
Discover what is hype and reality, and what counts most.
The lithium price will more than double from current levels as it is easy to find but difficult to mine and will be used in every important aspect of the post-oil age that is now gaining momentum.The EV boom is here and the move towards cleaner and sustainable energy requires lithium batteries.Lithium battery manufacturers will gladly pay 25,000-30,000 for lithium as they experience the tremendous growth just getting started in this huge transition from oil.NMKEF is likely heading to $50.00 in a decade as world realities reward the company for it's job well done.
NMKEF could see .35 before it climbs to 50.00 as it grows from pre-production to a blue chip with a market cap of $40 billion.I like the risk/reward here so I'm all in and willing to ride out the ups and downs.It's more likely to see the debt paid off rather than any more dilution as the price of lithium continues to rise reflecting the bullish supply/demand fundamentals.The talk of over supply is nonsense but it creates fear and opportunity until the facts blow away the noise.The lows might be behind us or it could take a few more weeks.We shall see.
Peter Arendas:"the sky is the limit" for Nemaska "If the lithium prices grow"
Sep. 12, 2018 1:19 PM ET
https://seekingalpha.com/article/4205800-fully-funded-lithium-mine-developer-trading-27-percent-projects-tax-npv
Nemaska Lithium
A Fully Funded Lithium Mine Developer Trading At 27% Of Its Project's After-Tax NPV
"the lithium hydroxide will be important for Nemaska Lithium. Lithium hydroxide is a premium product that commands higher prices compared to lithium carbonate. As of September 7, the carbonate cost approximately $16,500/t (cif) or $12,000/t (exw), while the hydroxide price was around $19,500/t (cif) or $17,800/t (exw). Moreover, Nemaska should become the World lowest cost and biggest lithium hydroxide producer (chart below). Nemaska should be able to produce lithium hydroxide at a cost of $2,811/t and lithium carbonate at a cost of $3,403/t."
"The initial CAPEX is estimated at C$801 million ($616 million). Using the lithium hydroxide (exw) and lithium carbonate (exw) prices of $14,000/t and $11,719/t respectively, the resulting after-tax NPV(8%) equals to $1.8 billion and the after-tax IRR equals to 30.5%. The current corporate presentation shows also NPV and IRR reflecting the structure of the C$1.1 billion ($840 million) financing package. Although the NPV has declined slightly, to $1.7 billion, the IRR has increased to 56%.
Although the mine and electrochemical plant construction should cost only $616 million, Nemaska Lithium has raised some additional money to cover the interest payments, working capital needs and also to have some reserve for unexpected events. The financing package consists of the abovementioned equity financing worth C$454 million, a $150 million lithium stream and $350 million of senior secured bonds that bear an interest rate of 11.25%. Based on the lithium stream agreement, Orion Mining Finance will receive 14.5% of all lithium hydroxide and carbonate produced at Nemaska's Shawinigan electrochemical plant. Orion will subsequently pay to Nemaska 40% of proceeds from the sale of the products. In other words, Orion will receive approximately 8.7% of Nemaska's sales. Although the volume of products deliverable under the stream agreement is capped at 5,000 tonnes, the stream is very favorable for Orion. Given the structure of the lithium stream, Orion should recover its initial investment pretty quickly (in less than 5 years if the current lithium prices prevail) and it will be collecting net profits for the remaining 3 decades of operations.
The mine and the electrochemical plant construction is well underway. The project is fully permitted and fully funded and the pilot plant has shown that the whole concept is working well. Nemaska Lithium has closed off-take agreements with several partners including Johnson Matthey (OTCPK:JMPLF), LG Chemical (OTCPK:LGCLF), FMC (FMC) or Northvolt. Moreover, as a bonus, it has closed also an off-take agreement for the spodumene concentrate. It means that the spodumene concentrate that should be produced at the Whabouchi mine from Q3 2019 will generate some cash-flows before the Shawinigan electrochemical plant is fully ramped-up, probably in late 2020 or early 2021. The revenues from the spodumene concentrate sales will further de-risk the project as they will create a buffer to cover some unexpected cost overruns or construction delays. In other words, the main risks are related to the lithium market itself right now.
The lithium market
The lithium prices have experienced a steep growth in 2017 (chart below), mainly due to the growing demand of battery producers. However, a steep growth of demand for lithium has been expected for some time and as a result, several projects should start lithium production in the coming years. As a result, especially the spodumene concentrate prices should decline in the near future. On the other hand, the hydroxide and carbonate prices should do relatively well, continually rising during the whole 2020's. This is probably a more optimistic view.
There are also some opinions stating that the fear of lithium oversupply that helped to push the lithium prices down may actually help to avoid the oversupply. As the new projects need to be financed, the current lithium market weakness may limit the amount of money flowing into the lithium mining sector notably. If some of the projects are postponed or suspended, the projected lithium oversupply may turn into a deficit quite easily.
Of course, the higher lithium prices, the better for Nemaska Lithium. However, as shown in the abovementioned charts, Nemaska is expected to become the lowest-cost lithium hydroxide producer by far. And it should be relatively comfortably positioned right in the middle of the lithium carbonate cost curve. It means that even if the lithium prices experience a dramatic decline, Nemaska Lithium should be profitable also in a situation when its competitors are bleeding heavily. Nemaska's debt of $350 million shouldn't be a problem. Even at notably lower lithium prices, Nemaska should be able to repay or refinance it relatively easily.
Conclusion
Nemaska Lithium presents a big opportunity, at its current share price of $0.54 and market capitalization of $457 million. Its assets are located in Canada, the project is fully permitted and fully funded, the off-take agreements are already signed and the construction is well underway. The main risk is related to the lithium price development right now, however, given that at the current lithium prices the after-tax NPV(8%) of the project is approximately $1.7 billion, there is a huge margin of safety for the new investors. The downside risk is pretty limited, given the huge gap between the market capitalization and the NPV of the project. If the current lithium prices prevail, Nemaska Lithium's share price should grow at least by 300% over the next 2-3 years. If the lithium prices grow, the sky is the limit.
Disclosure: I am/we are long NMKEF.
VW is planning a capacity of 100,000 electric cars per year for first plant to go electric
Fred Lambert
- Sep. 10th 2018
https://electrek.co/2018/09/10/vw-electric-cars-production-capacity-first-plant-go-electric/
Volkswagen E-mobility board member Thomas Ulbrich confirmed the news last week.
He said that pre-production of VW’s I.D. electric vehicle will start at its Zwickau plant and they aim to have a production capacity fo 100,000 electric cars by 2020.
Over the next few years, they want the plant to go all-electric.
He emphasized that Zwickau is only the beginning:
“Zwickau is, if you like, only the tip of the iceberg. Our mission is nothing less than the transformation of the Group-wide production network towards e-mobility. We speak about 16 locations worldwide – and that’s within just three years, “
(In 2017, Volkswagen produced around 11 million passenger and commercial vehicles globally. The world's second largest motor vehicle manufacturer operates 52 locations for components and 68 passenger car production locations.)
We often joke about VW being the king of EV press releases, but I see this as a significant positive move for electrifying the fleet.
With that and Volkswagen’s important battery contracts, which they recently doubled to a $48 billion value, it would be stupid not to take the German automaker’s electrification effort seriously.
Nemaska Lithium signs 5-year supply agreement with Northvolt
September 11, 2018
Canadian Nemaska Lithium announces that it has signed an agreement regarding the supply of battery grade lithium hydroxide to Swedish battery manufacturer Northvolt.
Back in late April 2018, the Canadian company announced an agreement in principle with Northvolt. This agreement is now superseded by a definitive 5-year supply agreement.
Under this agreement, Nemaska Lithium agrees to supply, through its wholly-owned subsidiary Nemaska Lithium Shawinigan Transformation Inc., and Northvolt agrees to purchase, on a take-or-pay basis, up to 5’000 but not less than 3’500 metric tonnes per year of lithium hydroxide produced at the corporation's commercial plant in Shawinigan, for a 5-year supply period commencing upon the start of commercial production at both the Shawinigan Plant and Northvolt's projected Skellefteå factory in Sweden.
https://evertiq.com/news/44771
Energy Storage Grows By 200% In US
https://cleantechnica.com/2018/09/10/coal-killing-energy-storage-grows-by-200-in-us-ct-exclusive-interview/
September 10th, 2018 by Tina Casey
File this one under O for Oops, Never Saw That One Coming. President* Trump campaigned on a promise to save coal jobs in the US, but he missed that thing about the potential for explosive growth in the energy storage market. Now the chickens are coming home to roost, and that spells bad news for fossil fuels.
In the latest development, the energy research firm Wood Mackenzie Power & Renewables (formerly GTM Research) reports a respectable — ok, so super impressive — year over year growth for Q2 energy storage deployments of 200% in the US.
the US Department of Energy has been vigorously promoting wind and solar grid integration. To accelerate the trend, the agency is pursuing energy storage along with smart grid technology. That includes small-scale, distributed storage as well as utility-scale, long duration storage.
That utility-scale angle is somewhere off in the future (currently, pumped hydro is the primary option), but the business sector is already leaning on small-scale batteries to ensure resiliency and reliability at individual sites. So, for that matter, is the Department of Defense.
Small-scale batteries are also streaming into the individual home market. Aside from the convenience of being able to keep the lights on whenever the grid goes down, there’s the necessity factor. More people are working from home and receiving health care at home, and can’t afford an outage of any duration.
200% Growth For Energy Storage
So, how to quantify this trend? Wood Mackenzie partners with the Energy Storage Association to produce a quarterly report called the U.S. Energy Storage Monitor. The latest report is just out and it’s a doozy. Here’s the rundown from Wood Mackenzie:
…156.5 megawatt-hours of energy storage were deployed in the second quarter of 2018, triple what was deployed in the second quarter of 2017. The residential segment led the way, growing tenfold year-over-year.
Not surprisingly, California and Hawaii powered the growth in residential energy storage. Hawaii established a 100% clean power goal back in 2015, and California lawmakers are also on track to establish a 100% goal for renewables.
I love a beautiful bottom.EOM
Gail Tverberg is looking at conflict and war:
https://ourfiniteworld.com/2018/08/27/how-energy-shortages-really-affect-the-economy/
"Most of us have never been taught about resource wars. The wide availability of fossil fuels eliminated the need to even think about a possible lack of energy resources, or other limited resources such as fresh water. Unfortunately, resource conflict may be back in some new 21st century version in the not too distant future."
$8 by Q4 2021 is my target.EOM
$50.00 by 2018 is not based on current information but is based on current track,lithium price double the current level and realistic opportunities for expansion in lithium sector and other sectors.This management team has talent,experience and vision to build a mining giant.Think BIG!
The vol of the Canadian listing is more important https://ih.advfn.com/stock-market/TSX/NMX/stock-price
and things are looking good across the board.Lithium's low could be behind us,NMKEF might of seen it's low,the major indexes are ready to climb and lithium miners are likely to out perform most sectors.The next years will be fantastic for NMKEF starting now and lasting 15-20 years.NMKEF could see 50.00 by 2018.Surprises will be to the upside as the EV transition gains momentum from here.Enjoy the profits.
Update:Guy Bourassa Visits Uptick Newswire’s ‘Stock Day’
https://www.nasdaq.com/press-release/nemaska-lithium-inc-ceo-guy-bourassa-visits-uptick-newswires-stock-day-podcast-with-everett-jolly-20180829-00815
PHOENIX, Aug. 29, 2018 (GLOBE NEWSWIRE) -- Nemaska Lithium, Inc., (OTCQB:NMKEF) (the "Company") CEO Guy Bourassa is making another stop on Uptick Newswire's "Stock Day" podcast with Everett Jolly.
The interview is now available for streaming. To listen to the interview in its entirety, please go to:
https://upticknewswire.com/featured-interview-guy-bourassa-of-nemaska-lithium-inc-otcqx-nmkef/ 10 min
Guy Bourassa of Nemaska Lithium, Inc. (OTCQX: NMKEF)(TSX: NMX), returns to the show to give an update on the demand for lithium, project financing package, and building the largest lithium hydroxide production facility in the world.
140 employees working at mine site
94 percent production sold
first revenues Q4 2019
work is on track
lithium hydroxide price is stable and not a worry and lithium hydroxide is the future and we are going to be the largest supplier
News:Nemaska Lithium Inc. (“Nemaska Lithium” or the “Corporation”) (TSX:NMX) (OTCQX:NMKEF) (FRANCFORT:N0T) is pleased to confirm that it has satisfied the conditions required before the the Long Stop Date (as defined in the terms of the Bonds) pursuant to its offering of senior secured callable bonds in the aggregate principal amount of USD 350M (the "Bonds"), the completion of which was announced on May 30, 2018 (the "Bond Offering").
As indicated at the time of the pricing and closing of the books for the Bond Offering (see May 10, 2018 press release), the Corporation had until August 30, 2018, to satisfy a series of conditions precedent to the transfer of proceeds to the trustee in charge of holding same for the benefit of the bondholders, before the Corporation may draw on such proceeds. The main conditions met are:
(a) having raised minimum net equity proceeds of USD 299M (see May 30, 2018 press release);
(b) having received the first instalment of USD 75M of the streaming facility (see August 23, 2018 press release);
(c) having executed and/or obtained, as applicable, material project documents, agreements and governmental, regulatory and environmental permits and authorizations related to the project;
(d) having obtained the intercreditor agreement in respect of the streaming facility; and
(e) having put in place the security package over all of the assets determined in connection with the Bond Offering.
“Meeting the conditions precedent required to make the proceeds from the Bonds offering available proves an important Project financing milestone,” said Guy Bourassa, President and CEO of Nemaska Lithium. “As per our schedule relating to the various components of the $1.1B financing completed on last May 30, our first drawdown from the Bonds will occur once we have invested the proceeds from the equity offerings raised in respect of the project (USD 299M) as well as the USD 150M ensuing from the streaming agreement. The Project execution progresses well, namely as regards engineering, purchasing of long lead items and construction.”
As previously announced (see May 10 and 30, 2018 press releases), the Bonds are USD-denominated with a five-year term and bear interest at 11.25% per annum, payable quarterly and in arrears on the relevant interest payment day in February, May, August and November of each year, commencing on August 30, 2018. The first interest payment was made.
The Corporation will have to satisfy various customary conditions precedent prior to each disbursement of funds from the Bonds. The Corporation will be entitled to make a minimum of three drawdowns until June 2021. The main conditions are the following: (i) drawdown amounts will be limited to the aggregate amount of Project costs outstanding at the time plus Project costs falling due for payment over the 60 following days, (ii) each drawdown must be accompanied by a notice which, among other things, must be countersigned by an independent engineer confirming that that the “cost-to-complete test” (i.e. the Corporation has sufficient funds available to achieve completion of the Project) has been satisfied.
The full text of the terms of the Bonds was filed and is available on the Corporation’s corporate profile on SEDAR at www.sedar.com; readers are urged to refer to this full text.
https://ih.advfn.com/p.php?pid=nmona&article=78158778&symbol=TSX:NMX
Nemaska Lithium Confirms Fulfillment of Conditions Precedent to the Long Stop Date Under Its USD 350M Bond Offering
News:Nemaska Lithium Inc. (“Nemaska Lithium” or the “Corporation”) (TSX:NMX) (OTCQX:NMKEF) (FRANCFORT:N0T) is pleased to confirm that it has satisfied the conditions required before the the Long Stop Date (as defined in the terms of the Bonds) pursuant to its offering of senior secured callable bonds in the aggregate principal amount of USD 350M (the "Bonds"), the completion of which was announced on May 30, 2018 (the "Bond Offering").
As indicated at the time of the pricing and closing of the books for the Bond Offering (see May 10, 2018 press release), the Corporation had until August 30, 2018, to satisfy a series of conditions precedent to the transfer of proceeds to the trustee in charge of holding same for the benefit of the bondholders, before the Corporation may draw on such proceeds. The main conditions met are:
(a) having raised minimum net equity proceeds of USD 299M (see May 30, 2018 press release);
(b) having received the first instalment of USD 75M of the streaming facility (see August 23, 2018 press release);
(c) having executed and/or obtained, as applicable, material project documents, agreements and governmental, regulatory and environmental permits and authorizations related to the project;
(d) having obtained the intercreditor agreement in respect of the streaming facility; and
(e) having put in place the security package over all of the assets determined in connection with the Bond Offering.
“Meeting the conditions precedent required to make the proceeds from the Bonds offering available proves an important Project financing milestone,” said Guy Bourassa, President and CEO of Nemaska Lithium. “As per our schedule relating to the various components of the $1.1B financing completed on last May 30, our first drawdown from the Bonds will occur once we have invested the proceeds from the equity offerings raised in respect of the project (USD 299M) as well as the USD 150M ensuing from the streaming agreement. The Project execution progresses well, namely as regards engineering, purchasing of long lead items and construction.”
As previously announced (see May 10 and 30, 2018 press releases), the Bonds are USD-denominated with a five-year term and bear interest at 11.25% per annum, payable quarterly and in arrears on the relevant interest payment day in February, May, August and November of each year, commencing on August 30, 2018. The first interest payment was made.
The Corporation will have to satisfy various customary conditions precedent prior to each disbursement of funds from the Bonds. The Corporation will be entitled to make a minimum of three drawdowns until June 2021. The main conditions are the following: (i) drawdown amounts will be limited to the aggregate amount of Project costs outstanding at the time plus Project costs falling due for payment over the 60 following days, (ii) each drawdown must be accompanied by a notice which, among other things, must be countersigned by an independent engineer confirming that that the “cost-to-complete test” (i.e. the Corporation has sufficient funds available to achieve completion of the Project) has been satisfied.
The full text of the terms of the Bonds was filed and is available on the Corporation’s corporate profile on SEDAR at www.sedar.com; readers are urged to refer to this full text.
https://ih.advfn.com/p.php?pid=nmona&article=78158778&symbol=TSX:NMX
Nemaska Lithium Confirms Fulfillment of Conditions Precedent to the Long Stop Date Under Its USD 350M Bond Offering
Bargains created by the unwinnable war on Tesla and EVs. Good read:
Tesla & Musk Hit By Trifecta Of Fossil Money, Short Money, & Media Weakness
https://cleantechnica.com/2018/08/26/tesla-musk-hit-by-trifecta-of-fossil-money-short-money-media-weakness/
Media outlets of all types are disproportionately covering every negative story, distorting the narrative around neutral stories and reporting any rumor about Elon Musk they can find. News sentiment is often negative despite the positive news. It doesn’t take much reading of Musk’s actual tweets or Tesla’s actual results to see the massive disparity between how Tesla and Musk are increasingly portrayed and what they are actually doing.
Why is the media getting Tesla and Musk so wrong right now? There are three major problems which have led to this situation:
anti-electric car PR campaigns by elements of the fossil fuel industry
anti-Tesla PR campaigns by firms which are shorting TSLA stock
the ongoing challenge legacy and new media has in terms of reduced revenue and increased costs
Read it all!
NMKEF is a bargain born out of irrational fear.EOM
There is no mess.They are way ahead of the competition and well positioned to ride the powerful bull market for 20 years and more.NMKEF is on track to hit $8 in 3 years and $20 in 10 years.These targets are achievable based on the current track and there is much more possible with future deals and lithium prices making new highs as demand heats up and supply gets tighter.This lithium bull market will surprise to the upside for many years and well placed producers are going to be cash generating machines.
Dare we hope the lows are behind us?EOM