There are times when the stock market and specific sectors work in perfect sync to expose a significant investment opportunity. And more often than not, investors are simultaneously searching for the most potentially lucrative opportunities in play. When they intersect, and if that investment targets promising companies in the right sector at the right time, the results can provide an exponential boost to a portfolio. Those eyeing the battery metals markets may catch such an opportunity. And it could come through small-cap battery metals exploration company Surge Battery Metals (OTC: NILIF (TXVX: NILI).
Why? Because Surge Battery Metals is making all the right moves to make sure they position themselves to take advantage of a booming EV metals market that should deliver decades’ worth of revenue-generating opportunities. But the most excellent news about Surge is that they have multiple shots on goal. And while lithium is its potentially most significant near-term play, they have further exposure to copper, nickel, and other essential battery-needing elements to make sure they are on point to meet surging demand across the battery manufacturing sector.
Massive Battery Metals Market Opportunity
Indeed, the EV sector has put lithium into play. So much so that prices are scoring record-setting highs. But just because prices are high doesn’t mean every company in the sector will be a winner. Most won’t because they can’t scale, can’t get the proper permits, or work from locations without historical precedent. All three put them behind the competitive curve.
However, companies like NILIF will fare much better. They can scale, operate in two of the world’s most mining-friendly jurisdictions, are ESG-mandated, and have operations near several of the most proven battery metals mining locations in Canada and Nevada. In fact, they are advancing at least 5 mining locations that do more than diversify its opportunities; it provides near-term revenue-generating opportunities that could drive its share price appreciably higher. And to monetize those promising sites, they have the cash on hand to complete their 2022 exploration plans and still have money left in the bank.
The roughly $3.8 million in working capital puts NILIF in one of its best-operating positions ever. And besides having cash in the bank, they are also positioned to raise upwards of $8 million more, if needed, through the exercise of warrant options. So, being well-positioned now with capital available enhances an already bullish investment proposition.
But it gets better. Surge isn’t spending money to “hope” for the best. Instead, they are exploring locations with a proven history. And in the mining sector, proximity matters. The NILIF interests are located in areas where well-known companies currently operate metal-producing mines. This mitigates the risks usually faced by mining companies. And with risks less of a concern, more dollars can be dedicated to developing areas of proven resources, which can expedite revenue generation.
Supply-Demand Dynamics
Those following the business headlines know that demand for lithium is surging. But that’s only half the story. The other part is that there isn’t enough to go around, and that imbalance keeps Surge Battery Metals in the right place at the right time. In addition, it ought to be noted that the current imbalances result primarily from demand in the EV sector.
In truth, several market sectors are in dire need of lithium, including consumer goods, green technology, and even the military defense sectors. And with studies revealing that the demand for lithium is likely to increase six-fold in the next eight years, the imbalances today could be a drop in the bucket to what’s coming.
While it is true that several lithium exploration projects are trying to come online in the U.S. in other states, Nevada is still the place to be. And that’s where NILIF is, with the heart of its lithium operations in that very mining-friendly jurisdiction. That keeps them well-placed to take advantage of a market in its infancy that will generate up to trillions of dollars of business over time. By the way, having the right management team to seize those opportunities also makes a difference. And NILIF does.
Potential for Multiple Vertical Business
That’s important to a sector that may have no limits. As noted, while the electric vehicle industry is expected to be a significant market for lithium, it’s also true that demand for it won’t be isolated to that single industry, keeping the need for lithium in play for quite a while. But, Surge is more than a lithium story. Surge Battery Metals is also positioned to generate revenues from copper, nickel, silver, and potentially gold, each vitally important to the EV battery industry. The point is that NILIF can’t be evaluated from opportunities from a single sector. Several are in play, and each has its own billion-dollar revenue-generating potential.
So, while feeding Tesla’s ($TSLA) need to fuel its expected 20 million cars by 2035, there’s plenty of need elsewhere to keep NILIF cash registers running. In fact, at least 20 other EV manufacturers are looking to produce their own electric vehicles. And they all need one thing- battery power. Hence, the playing field for Surge Battery is significant, and they are deserving of a more appropriate valuation to reflect their interests.
Highly Prospective Exploration Interests
Of course, companies that want to tap into the demand need the right assets, and surge Battery does. The company operates properties in Nevada in the United States and in British Columbia in Canada. Notably, each is located near already producing sights. Again, keep in mind that these locations are in friendly jurisdictions, and the risk of sudden rule or regulation changes is a relatively moot point.
That’s an important consideration when evaluating exploration companies. Those in risk-prone locations face almost daily operating uncertainty. Surge doesn’t have those worries. They are currently advancing their interest in a property in Clayton Valley, a site that is the only active location producing lithium in the United States. Hence, that property’s potential alone could accelerate a jump in NILIF’s valuation. Add in the potential from its San Emidio Desert project, and a multiple could be added to an already bullish model.
Still, as noted, a company may have the right assets and capital to leverage them, but they could miss golden opportunities without a strong leadership team. Again, Surge checks the right boxes. The company is led by Greg Reimer, who had formerly been a Vice President at BP Hydro, one of the biggest companies of its kind in Canada.
He gets support from Chip Richardson, a banker throughout his working life who has worked for some of the biggest names in finance, including Morgan Stanley and UBS. The combined expertise of the management team and what they can do with their assets can’t be understated or under-appreciated. They bring an inherent ability to Surge Battery Metals to move into new projects and expedite work on existing ones.
Recent project updates enhance the bullish thesis.
Key Project Updates
-San Emidio Desert Project
This month, Surge Battery Metals was in the news after it made a significant announcement regarding its San Emidio Desert Project in Nevada, saying it completed plans to accelerate progress toward its Phase One drilling program.
It’s a significant announcement and should provide considerable optimism for investors. The update announced plans to have a four-drill drilling program, with work to begin immediately after final approvals. If the program stays on schedule, it could be one of those milestones reached that turn into catalysts.
-British Columbia Based Nickel Project
An update in March was also encouraging, and it had to do with its N100 and HN4 nickel projects in British Columbia. Surge announced that the 2021 exploration program provided encouraging assays identifying potentially considerable nickel deposits. That’s excellent news. Like lithium, nickel prices are soaring, diversifying sales opportunities and keeping other massive revenue-generating markets in the crosshairs.
A Stock Worth Considering
Here’s the bottom line- while there is never a sure thing when it comes to investing, there are some opportunities that come close. But that only happens after finding companies in the right sectors at the right time that have the capital and management to move the operating ball forward. For all intents and purposes, Surge Battery Metals has the complete package.
Moreover, they are in a surging market that is only expected to get bigger as the EV and consumer products markets continue to drive the need for lithium and other essential battery metals. And having the finances to make sure they get to the latest phases of operations, mining, and the early investment opportunity in Surge Battery Metals has never looked better.
Therefore, with the totality of bullish parts accretive to a common goal and near-term catalysts likely imminent, Surge Battery Metals is more than ripe for investment consideration; it’s also a timely one.
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