AGORACOM Small-cap Investor Relations Blog

Lomiko Metals Inc. – Interview with Paul Gill, CEO By Dr. Allen Alper, PhD Economic Geology  and Petrology, Columbia University, NYC, USA on 11/6/2019

Lomiko Metals Inc. (TSX-V: LMR, LMRMF, FSE: DH8B) is a Canadian-based, exploration-stage company, that discovered high-grade graphite at its La Loutre Property in Quebec and is working toward a Pre-Economic Assessment (PEA) that will increase its current indicated resource of 4.1 Mt of 6.5% Cg to over 10 Mt of 10%+ Cg. We learned from Paul Gill, CEO of Lomiko Metals, that the exploration has been completed and it is showing two different areas of deposits: the graphene battery zone and the refractory zone. The consolidated 43-101 resource estimate is expected soon. According to Mr. Gill, the material at Lomiko’s discovery is of similar or better quality than the material at the Imerys Carbon Graphite Mine, 53 km to the Northwest and 100 kilometers from the Imerys processing facility at the Port of Montreal. The Imerys mine has a mine closure plan for 2022 and needs replacement. Located near a producing mine, with an experienced workforce, with excellent infrastructure and year around working capability, La Loutre property has great potential to become the next graphite mine.

Lomiko Metals Inc.

Dr. Allen Alper: Could you give our readers/investors an overview of your Company, Paul, and tell them what differentiates your company from others?

Paul Gill: Right. Lomiko Metals has been working in the battery materials space for about six years now. We’ve focused on graphite because that is the material that makes up the anode of a lithium-ion battery, which is the main power source for most electric vehicles. We have discovered a very good deposit of material in Quebec and now with 170 drill holes, is showing two different areas of near surface mineralization. One is called the graphene battery zone and the other is the refractory zone. We just finished the refractory zone drilling in 2019 and we will be going to a consolidated 43-101 resource estimate shortly.

What makes us different from other companies in this particular sector is that we are located only 53 kilometers from the only operating graphite mine in North America, the Imerys Carbon and Graphite Mine. The discovery we’ve just made at the refractory zone is similar or of better quality than the material or the grades that are being mined at Imerys. This is very significant because everyone has an understanding that the Imerys Carbon Graphite Mine is shortly going to run out of mineable ore and needs replacement. So, we’re in a very good situation.

There are other very relevant companies in the space, Nouveau Monde, which is TSXV:NOU, Mason Graphite, which is TSXV:LLG, Graphite One, which is TSXV:GPH and Northern Graphite, TSXV:NGH. But all of those that are post pre-economic assessment and have major flaws. Mason needs to build infrastructure. Nouveau Monde has sulfur in their particular deposit, which adds cost. Graphite One is located in the Aleutians Islands in Alaska, which is a very difficult mining jurisdiction because of the weather and Northern Graphite has low grade which may hamper the economics

But Lomiko is in a Goldilocks zone, located just north of the Port of Montreal and just south of the Imerys Carbon Graphite Mines. We think we have a very distinct advantage because there is now a North American strategy being put in place for battery materials, which includes lithium, graphite and cobalt.

Dr. Allen Alper: Sounds excellent. Could you tell our readers/investors the highlights of 2019 and your plans for 2020?

Paul Gill: The highlight for Lomiko was finding one strike length was 110 meters, with grades of 14.5%, which are double what they are mining at the Imerys Carbon Graphite Mine. Imagine mineralization taller than the Statue of Liberty and obviously there’s not just one drill hole that’s only six inches wide there. It is probably indicative of a larger area of mineralization.

Of course, we have done many other drill holes and have confirmed a mineralization zone that extends for 900 meters, from the Northwest to the Southeast at the refractory zone and also a width of about 400 meters. So, we have a definite area of a high grade and of mining potential. We’re ready to do a 43-101 resource estimate and the preliminary economic assessment, which will put a dollar value on that particular deposit.

Dr. Allen Alper: Sounds excellent! Great results in 2019!

Paul Gill: It certainly is.

Dr. Allen Alper: Sounds very good! And where you’re located is fantastic. Excellent! It’s great to have high grade and high quality and also to be in a great location.

Paul Gill: Absolutely. It helps to have that infrastructure in place. There’s power all the way through, there’s road access all the way to the property. The only portion of it that’s gravel is about eight kilometers, which is really not that bad. We can surface that pretty easily and that’ll get us right to the site.

It has year-around working capability. Very important! Proximity to the Imerys Mine means that there are workers that are experienced in that particular area for the last little while. That workforce will be available to us. They don’t want to move to another location. We’ll be able to hire some of those people or in fact there may be a potential for a buyout of our company.

Dr. Allen Alper: Sounds excellent! Could you tell our readers/investors a little bit about graphite market and why it’s so important?

Paul Gill: Yes, absolutely. It’s a fascinating market. It is one of the few markets that does not have a many large multinational companies involved. Lithium has a secure niche with Albemarle, down in the States and a couple of large Chinese companies. There is Rio Tinto and BHP and Glencore all involved in the zinc, nickel and copper markets, which are all other relevant battery materials.

But in graphite, there is no one big producer except for the country of China. Now, the country of China has 50 of the world’s 91 lithium-ion mega factories. If you can wrap your head around that, 91 mega factories. The amount of factories, ready to produce li-ion batteries and being built, means that the demand for battery materials is really going to spike as electric vehicles get on the road and there’s more demand for them.

We want to be in place to supply that demand when it comes. We’re in a perfect spot now because even Bloomberg has predicted that in the next decade there’s going to be a five times increase, in demand for battery materials and specifically graphite.

Dr. Allen Alper: Oh, that sounds excellent. Could you tell our readers/investors about your background and your Team?

Paul Gill: Certainly. I have been involved in mining for 20 years. Our first company was Norsemont Mining in 2003, which started at 1 million market cap and subsequently built that to a point at which new directors became involved. We eventually sold that project for $512 million in 2011 to Hudbay Minerals. So, that was a great experience and we want to duplicate that. What I did was look for other materials that are going to be in high demand and have that exponential return potential.

That’s when I looked at graphite. Our CFO, Jacqueline Michael has been with The Company for many years and was part of a buyout of the previous iteration, which was Conac Software. Then she stayed on to be CFO. We have two very good independent Directors, Gabriel Erdelyi and Julius Galik, who help us with running the Company and a vast array of advisors that have come on in the last little while, Dean Nawata, Sandio Pereira, Jason Gregg, who have great connections in the mining market and Mike Patrina, who’s a professional engineer.



So, we’re really building up a team that can be put in place to develop this project once we get the preliminary economic assessment. I think by any estimate, the fact that we were at only 2 million market cap presently and the base concept of the project going to preliminary economic assessment, indicates a jump in value. It’s an opportunity that is very, very relevant right now in the markets with Lomiko trading on the TSX Venture with the symbol LMR and the OTCQB under the symbol LMRMF.

Dr. Allen Alper: Paul, could you summarize the reasons our readers, investors should consider investing in Lomiko.

Paul Gill: Number one, we’ve just finished drilling and are going to update a resource, which will increase our valuation and will go right to a preliminary economic assessment, which will provide a value for the project that will go right onto our audited financial statements. Number two, we are currently doing a financing in Canada at five cents per share Canadian, but the market is trading under that. So, there is an opportunity for buyers in the United States to play a bit of arbitrage and because the financing is not available in the United States.

Three, we think the battery materials market is going to be a great place to have a return on investment that is exponential, and four, we want to get involved in these markets as they’re moving. It’s nothing different from getting involved in computers in 1980 before they became universally used, getting involved in the internet in 1990 before it became universally used, or smartphone in the year 2000 before they became universally used.

It’s the same general trend and it’s a big trend that we need to recognize and realize that there’s a great opportunity for investors. We want to make a strong argument that now is the time for Lomiko.

Dr. Allen Alper: Sounds like extremely strong reasons for our readers/investors to consider investing in Lomiko. Paul, was there anything else you’d like to add?

Paul Gill: Just to thank you for interviewing me at Lomiko Metals Inc. for Metals News. I appreciate it.

Dr. Allen Alper: Thank you. I enjoyed hearing about everything you have been doing. I’m very impressed. We’ll publish your press releases as they come out so our readers/investors can follow your progress.

https://www.lomiko.com/

A. Paul Gill, President & CEO
604-729-5312
Email: [email protected]

SPONSOR: Lomiko Metals LMR:TSX-V – A Canadian exploration-stage company discovered high-grade graphite at its La Loutre Property in Quebec and is working toward a Pre-Economic Assessment (PEA) that will increase its current indicated resource of 4.1 Mt of 6.5% Cg to over 10 Mt of 10%+ Cg through a 21 hole program at the Refractory Zone. Click Here For More Information

• “An opportunity exists to develop a North American market.  
• The new Electric Vehicle market supply of critical materials cannot be dictated by Chinese market conditions.  
• Lomiko is in an excellent location and the timing is right to move forward.”, stated A. Paul Gill, CEO of Lomiko Metals

As the dust settles following Syrah Resources’ decision to slash production levels in September 20‌19, the industry looks for a new path to meet demand growth from the EV sector. Mozambican production recedes After increasing production levels at its Mozambican Balama project to 92kt in the first half of 20‌19, Syrah Resources made the decision to significantly lower production from more than 15ktpm (kilotonnes per month), to around 5ktpm. Could other graphite projects fill the supply gap? The removal of large tonnages of Mozambican material looks initially promising for other potential producers and there are many waiting in the wings across Africa as well as North America and Europe, at varying stages of development.

“An opportunity exists to develop a North American market.  This is imperative for the new Electric Vehicle market supply of critical materials cannot be dictated by the Chinese market conditions.  Lomiko is in an excellent location and the timing is right to move forward.”, stated A. Paul Gill, CEO of Lomiko Metals

However, there is now much concern in the industry that Syrah’s problems will inhibit future investment in graphite projects.  At the start of 20‌19, the average price of Chinese flake graphite (fob, 94% C across all flake sizes, as reported by FastMarkets) had fallen to US$787/t and had reached US$680/t in September where it has stayed through to late October 20‌19. Meanwhile, the Chinese supply chain will soon be affected by a new round of plant inspections and temporary closures, as confirmed by an official at the 70th anniversary of the founding of the People’s Republic of China. The pending nationwide probe into environmental compliance is expected to hit in late 20‌19/early 20‌20 and will have the performance of state-owned firms as one of its main priorities. In addition to pollution controls, the efficiency of state-owned plants has also improved during previous rounds of closures.

Prices are expected to remain steady in the short term with temporary closures eating into Chinese overcapacity. This situation could change, however, once EV growth begins to recover in China, especially if a weak appetite for investment has yet to encourage any additional new capacity outside of China by the time significant demand builds in the coming years. Longer-term pricing could, therefore, be more positive.

SPONSOR: Lomiko Metals LMR:TSX-V – A Canadian exploration-stage company discovered high-grade graphite at its La Loutre Property in Quebec and is working toward a Pre-Economic Assessment (PEA) that will increase its current indicated resource of 4.1 Mt of 6.5% Cg to over 10 Mt of 10%+ Cg through a 21 hole program at the Refractory Zone. Click Here For More Information

In 2010 the US Department of Energy’s Critical Materials Strategy included lithium as one of 14 elements expected to play a vital role in America’s clean energy economy. 

Lithium is also among 23 critical metals President Trump has deemed critical to national security; in 2017 Trump signed a bill that would encourage the exploration and development of new US sources of these metals.

According to the US Geological Survey, the United States last year imported around half of 48 minerals and 100% of 18 minerals.

According to Benchmark Mineral Intelligence the US only produces 1% of global lithium supply and 7% of refined lithium chemicals, versus China’s 51%.

A Tesla executive earlier in the year said the company is worried about a shortage of lithium. The number of EVs are expected to multiply in coming years, but they can only progress as fast as the lithium-ion batteries can get built that go into them. Tesla CEO Elon Musk said, in June of 2019, that in order to ensure Tesla has enough batteries to expand its product line Tesla might get into mining lithium for itself.

The world’s leading lithium battery companies in 2016 produced 29 gigawatt-hours (GWh) of batteries. By 2028 forecasted production is expected to hit 1,049 GWh, an increase of 3,516%! 

Consider that in 2018, China sold 1.182 million NEVs (new energy vehicles including electrics and hybrids), 520,000 or 78% more than in 2017.

As China’s mark on the lithium market becomes more pronounced, growth in the sale of lithium end products is taking off.

According to Adamas Intelligence, in February 2019, 75% more lithium carbonate was deployed for batteries in electric and hybrid passenger vehicles compared to February, 2018.

At Ahead of the Herd we know that the lithium market, in a few short years, is going to be in deficit as troubles ramping up production meet a mounting wall of demand. It’s obvious Tesla’s CEO understands that in order to grow his company he has to have a secure supply of lithium.

Lithium price explainer

Before we go any further let’s take a look at the different prices of lithium; with 11 lithium products currently being assessed, it can get confusing. While the mineral used to be priced in long-term contracts like uranium, recently there has been a push by end-users, particularly automotive manufacturers, for more price transparency. 

As we can see in the price chart below, short-term the lithium bears have the upper hand, with lithium prices falling in China and South America, along with the price of spodumene concentrate in Australia. 

How are prices determined? There are three factors Benchmark Mineral Intelligence uses to set the industry standard reference prices: quality/ grade of lithium, shipping costs/ volumes, and the reliability of information given. 

The grade and level of impurities affect the price a miner receives, for the lithium to be processed into spodumene concentrate, lithium carbonate or lithium hydroxide. Often the product is refined into the exact specifications required by the end-user.  

Currently there are six prices of lithium carbonate, four for lithium hydroxide and one spodumene concentrate price: 

• Benchmark Minerals, Lithium Carbonate, 99%, FOB South America, USD/tonne
• Benchmark Minerals, Lithium Carbonate, 99%, CIF North America, USD/tonne
• Benchmark Minerals, Lithium Carbonate, 99.2%, CIF Europe, USD/tonne
• Benchmark Minerals, Lithium Carbonate, 99.2%, CIF Asia, USD/tonne
• Benchmark Minerals, Lithium Carbonate, Battery Grade, 99.5%, EXW China, RMB/tonne
• Benchmark Minerals, Lithium Carbonate, Technical Grade, 99%, EXW China, RMD/tonne
• Benchmark Minerals, Lithium Hydroxide, 55%, FOB North America, USD/tonne
• Benchmark Minerals, Lithium Hydroxide, 56.5%, CIF Asia, USD/tonne
• Benchmark Minerals, Lithium Hydroxide, 55%, CIF Europe, USD/tonne
• Benchmark Minerals, Lithium Hydroxide, 56.5%, EXW China, RMB/tonne
• Benchmark Minerals, Spodumene Concentrate, 6%, FOB Australia

In July Benchmark Intelligence published an update on lithium prices titled ‘Lithium’s price paradox’. Current prices are a paradox because lithium investors are making decisions based on short-term supply versus long-term market fundamentals. 

Indeed there has been an influx of new supply entering the market. Last year four hard-rock (spodumene) operations in Australia started production. The number of active lithium mines in Australia grew from one in 2016 to nine by year-end 2018. 

A total of five new lithium conversion plants (plants that convert lithium carbonate to lithium hydroxide) have come into production and another three have expanded their output to meet market demand.

What is promised in not always delivered

Past success however is not necessarily indicative of the future. We know that between 2012 and 2016, major lithium miners planned to produce an extra 200,000 tonnes of new supply. But when 2016 rolled around, under 50,000 new tonnes came online, due to technical problems.

According to Benchmark’s research, only three plants in China have reached production and full capacity. Beyond the Tier 1 producers shown in green in the table below, just two – General Lithium (16,000t) and Jiangte Motor (25,000t) – managed to meet production targets of 41,500t. That means only 87,000t of new Chinese capacity has hit the market since 2016, of a planned 481,500t:

The false narrative which emerged from these expansions and spilled over into 2019 was that the industry was awash with battery-grade lithium chemicals, sufficient to support rapid electrification over coming years.

Benchmark notes more major expansions outside China are planned this year but the timelines for completion are vague and delays are expected; thus the myth of over-supply in the face of exponentially high future demand for lithium. The research firm predicts supply would have to increase at a compound annual growth rate (CAGR) of 19% over the next six years to meet 2025 demand. From 2015 to 2018 it grew at just 11%: 

While the supply response has addressed the relatively minor growth of today, it is still far from meeting the needs of tomorrow’s EV expansions.

Spectators that flocked to the market in 2016 on the promise of an EV super-cycle have left before the warm up, let alone the main event.

While a downturn in prices has reflected a necessary correction towards near-term market fundamentals, it fails to represent the increasing possibility of another major deficit in the market by the early-2020s, creating a deceptive narrative in both share prices and surrounding markets. 

Another important point is that, despite the hundreds of thousands of tonnes more lithium chemical production capacity, only a small percentage will make it into lithium-ion batteries. Why?

Lithium carbonate contained in brines must have contaminants removed before it can be considered battery-grade quality; the process of removing impurities can be expensive. 

Technical-grade lithium used in applications other than for EV batteries such as glass and ceramics, is cheaper than battery-grade material, but it has to have low concentrations of iron to be upgraded. There may also be teething problems at new operations. Says Benchmark: 

As with any new lithium chemical production, only a proportion of this material will likely be sold into the battery sector from the outset. Even leading producers have problems meeting specs in the initial stages of production.

Both lithium carbonate and hydroxide can be used in the EV battery cathode. Lithium for the cathode and electrolyte materials is produced from lithium carbonate. In brine deposits, the lithium chloride is concentrated by evaporating lithium-rich brines in shallow pools from 12 to 18 months. It is then treated with sodium carbonate (soda ash) to precipitate out the lithium carbonate. 

Lithium carbonate can also be produced from clay deposits and spodumene, a silicate of lithium and aluminum.

All lithium batteries contain some form of lithium in the cathode and electrolyte materials. The battery anode is generally graphite-based, containing no lithium. 

Lithium carbonate derived from brine operations can be used directly to make lithium-ion batteries, but a hard-rock, spodumene concentrate needs to be further refined before it can be used in batteries, adding costs and complexity.

Despite being more expensive lithium hydroxide is becoming more popular as a battery feedstock because it is said to produce cathode material more efficiently and is necessary in certain cathode combinations such as nickel-cobalt-aluminum (NCA) oxide batteries and nickel-manganese-cobalt (NMC) oxide batteries. 

About 75% of the 65,000 tonnes of lithium chemical production expected to come online this year is targeting lithium hydroxide. 

While brine operations that suck up the lithium in a salt-water solution and then evaporate it in large ponds have historically been cheaper than hard-rock spodumene operations like Greenbushes in Australia, that is beginning to change. A higher royalty structure in Chile and a plant’s ability to make lithium hydroxide directly from spodumene are two factors challenging this assumption. 

But according to Benchmark, the case for lithium hydroxide being the more competitive lithium-ion battery feedstock is predicated on the battery market adopting high-nickel, hydroxide-dependent cathode chemistries” (a proposition that looks increasingly unlikely in the near-term) and secondly, that all spodumene producers are integrated lithium chemical suppliers. So far none of the new lithium assets are owned by chemical converter companies: 

The question in the lithium market is no longer whether spodumene or brine resources will be developed – both are needed to take us anywhere near the growth estimates of the next 2-3 years. The new questions is what other channels of supply will be developed to take us close to the demand forecasts for 2025 and beyond.

Indeed if these new spodumene mines fail to meet production costs, they will either cut output or close, which would tighten the lithium market even further than expected. Already we are seeing some spodumene producers in Australia balk at the prices they are currently receiving, preferring to stockpile material instead.

Reuters reports, Converters of hard rock lithium into battery chemicals in China were holding around four months’ worth of stocks, or double usual levels… This has slowed sales from overseas suppliers. Galaxy sold 44,630 tonnes in the first half of 2019, against more than 90,000 tonnes a year earlier, at an average price of $584, down from $940 a year ago.

If Australia’s spodumene producers are priced out of the market, where would the lithium come from to meet surging market demand? 

The way things are going, it’s not likely to be the United States. Despite having several properties at the development stage, no new lithium mine has entered production on US soil for over 50 years. The only producing mine is Albemarle’s Silver Peak in Nevada – which has been going since the 1960s and is rumored to have falling lithium brine concentrations.  

China resource lock-up 

We know from previous articles that China has been extremely active in acquiring ownership or part-ownership of foreign lithium mines and inking offtake agreements. 

By 2025, the Chinese government wants EVs to represent 20% of all cars sold.

By comparison, the US sold 361,307 EVs in 2018, just under a third of China’s volume.

China of course, has also locked up the rare earths market and is the primary player in a number of critical mineral markets including cobalt, graphite, manganese and vanadium. 

For years the United States and Canada didn’t bother to explore for these minerals and build mines. Globalization brought with it the mentality that all countries are free traders, and friends. Dirty mining and processing? NIMBY. Let China do it, let the DRC do it, let whoever do it.

China recognized opportunity knocking and answered the door, seizing control of almost all REE processing and magnet manufacturing, in the space of about 10 years.

Earlier this year, as part of its trade war strategy, China raised the prospect of restricting exports of these commodities, that are critical to America’s defense, energy electronics and auto sectors.

Over half of the world’s cobalt – a key ingredient of electric vehicle batteries – is mined as a by-product of copper production in the Democratic Republic of Congo (DRC). In a $9 billion joint venture with the DRC government, China got the rights to the vast copper and cobalt resources of the North Kivu in exchange for providing $6 billion worth of infrastructure including roads, dams, hospitals, schools and railway links.

China controls about 85% of global cobalt supply, including an offtake agreement with Glencore, the largest producer of the mineral, to sell cobalt hydroxide to Chinese chemicals firm GEM. China Molybdenum is the largest shareholder in the major DRC copper-cobalt mine Tenke Fungurume, which supplies cobalt to the Kokkola refinery in Finland. China imports 98% of its cobalt from the DRC and produces around half of the world’s refined cobalt.

In 2018 the United States produced just 500 tons of cobalt compared to 90,000t mined in the DRC. The US did not produce any vanadium either; the top three producers of the steel additive are, in order, China, Russia and South Africa.

As Quartz notes, in order to maintain its dominance in the EV market, Chinese manufacturers need a lot of cheap lithium. That explains why its largest lithium miner, Tianqi Lithium, owns 51% of Australia’s Greenbushes spodumene mine – the world’s dominant hard-rock lithium mine. And why China bid for, and got, a 23.7% stake in Chilean state lithium miner SQM, the second largest in the world, for $4.1 billion.

China produces roughly two-thirds of the world’s lithium-ion batteries and controls most of its processing facilities. 

Russia goes after lithium

This week the Uranium One Group, a subsidiary of Rosatom, Russia’s state-owned nuclear company, signed a deal with Wealth Minerals (TSX-V:WML) which has a lithium property in northern Chile. The Vancouver-based junior sold 51% of its Atacama lithium project to U1G. 

It’s unclear what Uranium One – the same company at the center of a scandal involving the Clintons – plans to do with the 42,600-hectare property. WML would only say it’s interested in partnering with U1G to “accelerate the development of lithium projects by using modern technology and moving away from outdated solar evaporation to a more efficient and environmentally friendly sorption technology,” the company’s president, Tim McCutcheon, remarked in Monday’s news release.

We do know that Russia is paying more attention to electric vehicles, despite petroleum being its number one export by far. According to the Russian Ministry of Industry and Trade, EV sales in the largest cities particularly Moscow and St. Petersburg, grew 150% between 2017 and 2018, despite a 40% price increase. 

The most popular model is the Nissan Leaf, accounting for some 40% of all sales in 2018, followed by the Mitsubishi i-MiEV and the Tesla Model S. Minister of Energy Alexander Novak reportedly said that EVs should represent 8-10% of Russia’s total car fleet by 2025- which would be a huge increase from the 10,000-11,000 EVs estimated to be on Russian roads at the end of 2018, Automotive Fleet reported earlier this year. 

It’s certainly curious, if not alarming, that Russia is already locking up lithium supplies, even though its EV penetration rate is paltry compared to the top electric vehicle use countries. Canada for example has about eight times more. 

We can’t help but notice Uranium One is doing the same thing with lithium, that it has done with uranium – be the Russian government’s Trojan horse in dominating the world’s uranium supply. 

Is it possible that Russia wants to be a price-setter of lithium too, which even in oil and gas-soaked Russia is likely to be a major new growth industry? It’s easy to see offtakes developing between Russia and South American lithium brines, or maybe Russia partnering with Chinese companies as they have done in the energy sphere, as the country ramps up production of lithium batteries and electric vehicles. 

A run through the latest uranium mine closures reveals the strong likelihood that Russia, through its Kazakhstan proxy, aims to seek and destroy any threats to its dominance. Besides Cameco’s mine shutdowns and US uranium production controlled by Americans reduced to almost nil, other casualties of low U prices and high-cost mining include French state-owned nuclear juggernaut Areva. West Africa-focused Areva went bankrupt and had to be restructured into a new company, Orano.

Australia’s Paladin Energy placed its Langer Heinrich mine in Namibia on care and maintenance in May 2018, following the mothballing of its Kayelekera mine in Malawi.

Rio Tinto’s Rossing uranium mine in Namibia is an example of a high-cost mine that was carved up by the Russians and handed over to the Chinese. The world’s longest-running open-pit uranium mine, opened in 1976, produced the most uranium of any mine. However, with production costs over $70 per pound, and the uranium price still limping along at around $20/lb, it was only a matter of time before too much red ink had spilled; in November 2018, Rio agreed to sell its stake in Rossing to China National Uranium Corp. 

With their low-cost production and state-owned enterprises doing the mining and enriching, Russia, Kazakhstan, and upcoming China can easily out-compete the private uranium industry. 

For example Uranium One, the Canadian company that was swallowed up in 2013 by ARMZ, a subsidiary of Rosatom, currently mines uranium in Kazakhstan, the world’s leading uranium-producing country, at an average cash cost of $8 a pound. In-situ mines operated by Uranium One and Kazatomprom dominated the first two quartiles of uranium-mining costs in 2018.  

In contrast Cameco, the third-biggest uranium miner behind Kazakh state-owned Kazatomprom and Orano (formerly Areva), reports its only mine left after four closures, Cigar Lake, will be mined at $15-16/lb over the remainder of its life. 

Uranium One is vitally important not only to Kazakhstan’s uranium production, but Russia’s. 

As a wholly-owned subsidiary of Rosatom, the company is responsible for Rosatom’s entire uranium production outside of Russia. That makes it the world’s fourth largest uranium producer. Uranium One has part-ownership of six producing uranium mines in Kazakhstan, the Willow Creek mine in Wyoming, and a 13.9% interest in a uranium development project in Tanzania.  

Russia and Kazakhstan have signed several nuclear cooperation agreements over the past decade or so. 

The former Soviet satellite nation and Russia currently account for over a third of US imported uranium, effectively setting the price of the nuclear fuel.  

US mine to battery to EV supply chain

The International Energy Agency is predicting 24% growth in EVs every year until 2030. The global fleet is expected to triple by 2020, from 3.7 million in 2017 to 13 million in 2020, according to the IEA.

Bloomberg forecasts there will be a 54-fold increase in EVs between 2017 and 2040, when global light-duty EV sales are expected to hit 60 million; there are currently about 4 million EVs in the world.

Globally, battery makers and automobile manufacturers are scrambling to ensure they have enough supply of the silvery-white metal.

A Reuters analysis shows that automakers are planning on spending a combined $300 billion on electrification in the next decade.

Volkswagen has said it will invest $800 million to construct a new electric vehicle – likely an SUV – at its plant in Chattanooga plant, starting in 2022. For more read Volkswagen to drag Tesla, making EVs in Tennessee.

Opened in 2016, Tesla’s Gigafactory in Nevada is a going concern. Every day 1,000 cars sets are trucked from the Gigafactory to an assembly plant in Fremont, California. The three-storey structure, the size of a dozen football fields, has 13,000 people working for Tesla and its Japanese battery partner, Panasonic. 

The company’s Model 3 was the best-selling electric vehicle in the US during the first half of 2019. InsideEVs claims Tesla sold 67,650 Model 3s through June, seven times the next best-selling electric vehicle, Tesla’s Model X SUV. The Chevy Bolt and Nissan Leaf were also among the top five best sellers. 

GM is planning to sell its first EV this year, a 2020 Cadillac SUV, built in Spring Hill, Tennessee, in a move designed to challenge Tesla.

In 2017, coinciding with its 20th anniversary, Mercedez-Benz announced plans to set up an electric car production facility and battery plant at its existing Tuscaloosa, Alabama plant. The $1-billion expansion will include a new battery factory near the production site, with the goal of providing batteries for a future electric SUV under the brand EQ. Six sites are planned to produce Mercedes’ EQ electric-vehicle family models, along with a network of eight battery plants. 

Meanwhile more battery factories are being built, driven by the demand for lithium ion batteries which is forecast to grow at a CAGR of over 13% by 2023.

There are 68 lithium-ion battery mega-factories already in the planning or construction stage. The first phase of Tesla’s Chinese Gigafactory is reportedly almost complete; plans are also in the works for a Gigafactory in Europe. 

Korean company SK Innovation has said it will invest US$1.6 billion in the first electric vehicle battery plant in the United States, and is considering plowing an additional $5 billion into the project, planned for Jackson County, Georgia.

All of this explosive growth in battery plants and EVs will mean an unprecedented demand for the metals that go into them. This includes lithium, cobalt, rare earths, graphite, nickel and copper. Lithium for example is expected to see a 29X increase in demand according to Bloomberg.

How will the United States obtain enough lithium for the electric-vehicle storm of demand that is brewing?

The US only produces 1% of global lithium supply and 7% of refined lithium chemicals, versus China’s 51%. The country is about 70% dependent on imported lithium. 

To lessen US lithium dependency will require the building of a mine to battery to EV supply chain in North America.

The first step is to develop new North American lithium mines.

Lithium products from Albemarle’s Silver Peak brine operation in Nevada are sent to its processing plant in North Carolina. This material is then loaded on ships and sent to Chinese battery manufacturers, which sell the batteries to automakers.

We don’t know how much lithium hydroxide Albemarle exports from Kings Mountain (the company does not disclose the amount to the USGS in tabulating global production statistics), but we do not think it is significant in global terms. According to Visual Capitalist, Silver Peak only produces 1,000 tonnes per year of lithium hydroxide, within a current lithium market of roughly 280,000 tonnes per annum of lithium carbonate equivalent (LCE), a term that encompasses both lithium hydroxide and carbonate used in EV batteries.

Recently, oil-field services giant Schlumberger inked an earn-in agreement with Pure Energy Minerals that could see Schlumberger – normally associated with oil and gas operations – own a lithium brine project in Nevada. The company and its subsidiaries have three years to acquire 100% ownership in return for constructing a pilot plant for processing lithium brine. 

Lithium Americas (TSX-V:LAC) is advancing its Thacker Pass lithium project in Humboldt County, Nevada, about 100 km northwest of Winnemucca. In 2018 LAC completed a PFS that envisions an open-pit mine that would produce 60,000 tonnes per annum of lithium carbonate, for 46 years. The two-phase project, targeted for 2022, would start with 30,000 tonnes per annum (tpa) then ramp up to 60,000 tpa. The company recently said it has completed a Plan of Operation for submission to the Bureau of Land Management (BLM), secured two partners for mining engineering, and started a definitive feasibility study (DFS). 

Juniors: the next wave  

Junior miners that have projects anywhere close to production between now and 2040 are bound to do well in the current lithium market, which as mentioned, is facing long-term supply shortages, despite what you read about a glut. 

Remember, supply would have to increase at a CAGR of 19% over the next six years to meet 2025 demand. 

Albemarle’s Silver Peak mine is the only producing lithium mine in the US, but there are other properties that could become the next big producer. The old adage, “To find a mine look around a mine” applies here. Below are five companies with US-focused lithium projects under development. All are in Tesla’s home state Nevada.

Ioneer (ASX:INR). Ioneer’s Rhyolite Ridge project is a shallow lithium-boron deposit located 25 kilometers from Albemarle’s Silver Peak mine. The company plans to leach lithium and boron from the host rock using dilute sulfuric acid. The project currently has a mineral resource of 4.1 million tonnes lithium carbonate and 10.9Mt of boric acid. With the resource compiled from an estimated 20% of two prospective basins, Ioneer believes it can expand the resource through further drilling. A prefeasibility study (PFS) was completed in October 2018. 

Cypress Development Corp (TSX-V:CYP). Cypress’ Clayton Valley Lithium Project, next to Albemarle’s Silver Peak lithium mine, hosts a non-hectorite claystone indicated resource of 3.835 million tonnes LCE and an inferred resource of 5.126 million tonnes LCE. A 2018 PEA showed a net present value of $1.45 billion at an 8% discount rate, yielding an internal rate of return (after tax) of 32.7%. Payback is just under three years. Cypress has successfully produced lithium carbonate and lithium hydroxide that can be marketed to end users, like electric vehicle battery manufacturers. Metallurgical testing shows 83% lithium recovery. A Pre-feasibility Study (PFS) is expected in October 2019.

Noram Ventures (TSX-V:NRM). The perimeter of Noram’s claims are located within two kilometers of Albemarle lithium brine operations. A technical report on the Zeus claim block was updated earlier this year, the result of three phases of drilling encompassing 60 drill holes. The new report identified an inferred mineral resource of 1.5 million tonnes of lithium carbonate equivalent (LCE).

Nevada Energy Metals (TSX-V:BFF). Nevada Energy Metals acquired its BFF-1 lithium project based on descriptions of geological modeling and historical drill results. The 2008 report concluded that shallow thermal-gradient drilling and exploration by previous operators demonstrated that this particular part of the Clayton Valley contained the valley’s highest subsurface temperatures. The company has two other lithium properties in Nevada, Teels Marsh West located 77 km northwest of the Silver Peak mine, and Black Rock Desert, which it optioned to LiCo Energy Metals in 2016. 

LiCo Energy Metals (TSX-V:LIC). LiCo Energy Metals is advancing the Black Rock Desert project it acquired from Nevada Energy Metals. Under the option agreement, LIC can earn a 70% interest in the project, and a 3% net smelter return royalty, by spending $1,250,000 in exploration within three years. A soil sampling program of 88 samples returned 73 samples containing over 100 ppm lithium, with maximum values up to 520 ppm Li.

Conclusion

This brief survey of lithium juniors operating in the United States shows there is tons of potential for building the foundation of a true mine to battery supply chain right here in North America. Doing so would put an end to US import dependence on foreign suppliers of lithium, needed to serve the burgeoning electric vehicle industry; the shift that occurred in the US oil industry, from net importer to net exporter, is analogous to what could, and should, happen with lithium.

The only way to break this dependence is to develop lithium mines in the US. And that spells opportunity for ahead of the herd investors.

Consider – Bacanora Minerals Sonora clay lithium project in Mexico attracted a buy-in from China’s Ganfeng Lithium. A payment of £21,963,740 from Ganfeng in exchange for a 29.99% equity interest and a 22.5% joint venture (JV) investment, helped boost Bacanora’s share price by over 50% this year. 

Battery and EV manufacturers in the United States need to get out in front of the looming lithium supply shortage. Buy secure mine supply now or pay the pipers, Russia and China, later.

Richard (Rick) Mills https://aheadoftheherd.com/Newsletter/2019/Building-Americas-mine-to-battery-to-EV-supply-chain

SPONSOR: Lomiko Metals LMR:TSX-V – A Canadian exploration-stage company discovered high-grade graphite at its La Loutre Property in Quebec and is working toward a Pre-Economic Assessment (PEA) that will increase its current indicated resource of 4.1 Mt of 6.5% Cg to over 10 Mt of 10%+ Cg through a 21 hole program at the Refractory Zone. Click Here For More Information

Contrary to what is believed, monolayer graphene (a sheet of carbon just one atomic layer thick) has 3D mechanical properties and they can now be properly measured and meaningfully described thanks to high-pressure Raman spectra measurements on the material. This result, from researchers at Queen Mary University of London, might have implications for when graphene – and indeed other 2D materials – are employed in applications such as mechanical sensors. It also highlights the fact that Raman spectroscopy can be used as diagnostic tool to measure the mechanical properties of graphene when it is employed as a reinforcement for other materials.

“Graphene is called a 2D material because its carbon atoms lie in a two-dimensional plane,” explains team member Yiwei Sun. “However, monolayer graphene has electrons in π-orbitals above and below this plane. If we compress a sheet of graphene in a direction normal to the sheet, graphene is strained because the π-electrons become compressed and strained. If the sheet is compressed in all three directions, it undergoes 3D strain, however. This means that 3D elastic parameters can and must be defined for this material.

“So, graphene should really be thought of as a 3D material, not 2D, as far as certain mechanical properties are concerned.”

Complementing previous experiments

Sun and colleagues also found that the stiffness of monolayer graphene is the same as that of graphite (which is a stack of graphene layers).

These results complement those from previous experiments in which researchers studied the effect of pressure in graphene supported on a substrate such as copper. The substrate strongly affects the contraction of graphene and thus skews the result, says Sun.

Such experiments are performed in a diamond anvil cell (DAC). Here, the samples are loaded into a pressure-transmitting medium, such as water, in a hole of a 50-micron-thick metal gasket sandwiched between two diamond culets 150 microns in size. Pressures of several gigapascals are then applied to the cell.

“What is new in our work is that we studied unsupported monolayer graphene in solution”, explains Sun.

The researchers started out in the usual way – with a monolayer of graphene on a copper substrate. They then got rid of the substrate by etching it away in a solvent after protecting the graphene by a polymer film (PMMA) so that it floated on the etchant and could be located. They took the graphene with the polymer out of the etchant, placed it on a glass slide and rinsed it with de-ionized water. Next, they loaded the graphene with the PMMA in DMF, which dissolved the PMMA leaving the monolayer graphene free-standing in it. “We loaded the monolayer graphene several times so that it was concentrated enough for a decent Raman signal,” says Sun.

The DMF prevents the graphene from crumpling and/or bonding together to form graphite for long enough to perform the high-pressure experiments. These involved compressing the graphene-containing liquid in a diamond anvil cell to pressures of 12 GPa and measuring its in-plane and out-of-plane (normal to the plane) stiffness using optical Raman spectroscopy.

In-plane and out-of-plane stiffnesses are the same for both graphene and graphite

The researchers compared their findings to those obtained on 3D graphite and found that both the in-plane and out-of-plane stiffnesses are the same for both materials, within the experimental errors of their experiment.

“Stiffness is usually defined in terms of the stress and strain (the change of thickness) a material can endure,” explains Sun. “We find that under pressure the thickness of graphene decreases at the same rate as that of graphite. Hence our claim that ‘graphene is graphite’ as regards some key mechanical properties.”

The team, led by Colin Humphreys and David Dunstan, also reports on a shift to higher energy frequencies of in-plane vibrations (phonons) of the unsupported monolayer graphene to 5.4/cm/GPa, which is very close to that of graphite (4.7/cm/GPa).

The in-plane force on graphene under pressure is significantly reduced since graphene, like graphite, is very soft out-of-plane (this is why we can write with the “lead” in pencils, which is graphite),” Sun tells Physics World. “This reduction is what causes the sublinear shift of its in-plane phonon frequency with pressure. This physically meaningful experimental observable allows us to define the thickness and strain of graphene in terms of the thickness of its π-orbitals.”

The technique employed in this study, which is reported in Physical Review Letters, might be used on other unsupported 2D materials in solution, he adds.

“Fiddly handiwork”

“High-pressure experiments like these are easy to describe, but they are notoriously difficult to perform,” writes John Procter of the University of Salford in a related Viewpoint article. Procter’s group was the first to study the effect of strain using Raman measurements of graphene in Si/SiO₂ substrates under high pressure. “Fiddly handiwork is required to align the DAC and sample with micrometre-precision. Because of these demands, such experiments also have a high failure rate. Sun and colleagues’ ability to study graphene under a known high stress – a first – is therefore a major achievement.”

He adds that the research could help in the development of strain sensors based on graphene. “It may also affect how Raman spectroscopy is used as a diagnostic tool for new types of graphene composites that serve to reinforce other materials. Here, the spectroscopy helps determine the extent to which stress or strain is transferred from the host material to the graphene reinforcement. Knowing graphene’s 3D characteristics will help researchers optimize this reinforcing behaviour.”

Sun and co-workers say they are now looking at how the atmosphere affects the mechanical properties of graphene and graphite. Such studies will be important for when it comes to real-world applications of these materials. “For example, a graphene-based device may perform very differently in a humid Manchester in the UK to a dry Arizona in the US,” says Sun.

Source: https://physicsworld.com/a/high-pressure-experiments-reveal-graphenes-3d-nature/

SPONSOR: Lomiko Metals LMR:TSX-V – A Canadian exploration-stage company discovered high-grade graphite at its La Loutre Property in Quebec and is working toward a Pre-Economic Assessment (PEA) that will increase its current indicated resource of 4.1 Mt of 6.5% Cg to over 10 Mt of 10%+ Cg through a 21 hole program at the Refractory Zone. Click Here For More Information

Last April, Elon Musk promised that Tesla would soon be able to power its electric cars for more than 1 million miles over the course of its lifespan. At the time, the claim seemed a bit much. That’s more than double the mileage current Tesla owners can expect to get out of their car’s battery packs, which are already well beyond the operational range of most other EV batteries. It just didn’t seem real—except now it appears that it is. 
A. Paul Gill, CEO of Lomiko Metals (TSXV: LMR, OTCQB: LMRMF) stated “If we’re going to continue to expand the electric vehicle industry in Europe and  North America, we need a secure supply of raw materials.”,stated Gill. “The shortage of graphite is going to be a real concern in the coming years.”,he added.   
Earlier this month, a group of battery researchers at Dalhousie University, which has an exclusive agreement with Tesla, published a paper in The Journal of the Electrochemical Society describing a lithium-ion battery that “should be able to power an electric vehicle for over 1 million miles” while losing less than 10 percent of its energy capacity during its lifetime.
Led by physicist Jeff Dahn, one of the world’s foremost lithium-ion researchers, the Dalhousie group showed that its battery significantly outperforms any similar lithium-ion battery previously reported. They noted their battery could be especially useful for self-driving robotaxis and long-haul electric trucks, two products Tesla is developing.
What’s interesting, though, is that the authors don’t herald the results as a breakthrough. Rather, they present it as a benchmark for other battery researchers. And they don’t skimp on the specifics.
“Full details of these cells including electrode compositions, electrode loadings, electrolyte compositions, additives used, etc. have been provided,” Dahn and his colleagues wrote in the paper. “This has been done so that others can recreate these cells and use them as benchmarks for their own R+D efforts.”
Within the EV industry, battery chemistries are a closely guarded secret. So why would Dahn’s research group, which signed its exclusive partnership with Tesla in 2016, give away the recipe for such a seemingly singular battery? According to a former member of Dahn’s team, the likely answer is that Tesla already has at least one proprietary battery chemistry that outperforms what’s described in the benchmark paper. Indeed, shortly after the paper came out, Tesla received a patent for a lithium-ion battery that is remarkably similar to the one described in the benchmarking paper. Dahn, who declined to comment for this article, is listed as one of its inventors.
The lithium-ion batteries described in the benchmark paper use lithium nickel manganese cobalt oxide, or NMC, for the battery’s positive electrode (cathode) and artificial graphite for its negative electrode (anode). The electrolyte, which ferries lithium ions between the electrode terminals, consists of a lithium salt blended with other compounds.
NMC/graphite chemistries have long been known to increase the energy density and lifespan of lithium-ion batteries. (Almost all electric car batteries, including the Nissan Leaf and Chevy Bolt, use NMC chemistries, but notably not Tesla.) The blend of electrolyte and additives is what ends up being the subject of trade secrets. But even those materials, as described in the paper, were well known in the industry. In other words, says Matt Lacey, a lithium-ion battery expert at the Scania Group who was not involved in the research, “there is nothing in the secret sauce that was secret!”
Instead, Dahn’s team achieved its huge performance boosts through lots and lots of optimizing of those familiar ingredients, and tweaking the nanostructure of the battery’s cathode. Instead of using many smaller NMC crystals as the cathode, this battery relies on larger crystals. Lin Ma, a former PhD student in Dahn’s lab who was instrumental in developing the cathode design, says this “single-crystal” nanostructure is less likely to develop cracks when a battery is charging. Cracks in the cathode material cause a decrease in the lifetime and performance of the battery.
Through its partnership with Tesla, Dahn’s team was tasked with creating lithium-ion batteries that can store more energy and have a longer lifetime than commercially available batteries. In electric cars, these metrics translate to how far you can drive your car on a single charge and how many charges you can get out of the battery before it stops working. Generally speaking, there’s a trade-off between energy density and battery lifetime—if you want more of one, you get less of the other. Dahn’s group was responsible for the seemingly impossible task of overcoming this tradeoff. The energy density of a lithium ion battery is one of the most important qualities in consumer electric cars like Tesla’s Model 3. Customers want to be able to drive long distances in a single charge. Tesla’s newer cars can get up to 370 miles per charge, which is well beyond the range of electric vehicles from other companies. In fact, based on the average American commute, Dahn estimates that most EV owners only use about a quarter of a charge per day. But to make a fleet of robotaxis or an empire of long haul electric trucks, Tesla will need a battery that can handle full discharge cycles every day. The problem is that fully discharging and recharging everyday puts greater stress on the battery and degrades its components more rapidly. But simply maintaining the current lifespan of a Tesla battery pack— about 300,000 to 500,000 miles—isn’t enough either. Long haul electric trucks and robotaxis will be packing in way more daily miles than your average commuter, which is why Musk wants a battery that can last for one million miles. Musk asked and Dahn delivered. As Dahn and his team detailed in their benchmarking paper, “one does not need to make a tradeoff between energy density and lifetime anymore.” The team’s results show that their batteries could be charged and depleted over 4,000 times and only lose about 10 percent of their energy capacity. For the sake of comparison, a paper from 2014 showed that similar lithium-ion batteries lost half their capacity after only 1,000 cycles
“4,000 cycles is really impressive,” says Greg Less, the technical director at the University of Michigan’s Energy Institute battery lab. “A million mile range is easily doable with 4,000 cycles.” Just days after the publication of the benchmarking paper, Tesla and Dahn were awarded a patent that described a single-crystal lithium-ion battery almost identical to the batteries described in the benchmarking paper. The patented battery includes an electrolyte additive called ODTO that the patent claims can “enhance performance and lifetime of Li-ion batteries, while reducing costs.”
It’s not certain that the battery described in the patent is the million-mile battery that Musk said would enter production next year, and neither Tesla nor Dahn are talking. But it’s a safe bet that Tesla’s proprietary battery performs even better.
Shirley Meng, who runs the Laboratory for Energy Storage and Conversion at the University of California, San Diego, says many electric vehicle companies are pursuing batteries with higher nickel content than what Dahn’s paper and patent describe. That approach can boost the energy density of a battery. Meng says the next step is to merge those higher-density designs with some high-performing mix of electrolytes and additives. Whether it’s the formula Dahn’s group perfected is an open question.
“I believe the ultimate goal of Jeff’s team is to demonstrate ultralong life in a high-nickel-content cathode, but perhaps they need a completely different mixture of the electrolyte additive cocktail,” Meng says. “I don’t think the same formula will work, and that’s why they released all the formulations.”
Whatever design ends up making it into production at Tesla’s massive Gigafactory, the signs are clear: A million-mile battery will be here soon.

Source: Daniel Oberhaus is a staff writer at WIRED, where he covers space exploration and the future of energy.

Lomiko Metals Inc. (“Lomiko”) (TSX-V: LMR, OTC: LMRMF, FSE: DH8C) and Quebec Precious Metals (“QPM”) (TSX.V: CJC) announces that further to the Company’s press release dated December 31, 2018, the Company wishes to update shareholders regarding its option to earn a 100% of the La Loutre Flake and Lac des Îles Flake Graphite Properties, Quebec (the “Properties”). The Company has completed its initial option and has earned its 80% interest in the Properties.

Pursuant to an agreement dated December 22, 2018, the Company and Quebec Precious Metals Inc. (“QPM”) (previously known as Canada Strategic Metals Inc.) agreed to extend two options agreements relating to the Properties which allow the Company to earn a 100% ownership. Pursuant to an amendment dated May 13, 2016, in order to earn a further 20% interest for a total of 100%, the Company was to issue an aggregate of 5,000,000 shares (pre-consolidation) (2,500,000 on or before July 31, 2017 and 2,500,000 on or before December 31, 2018) and fund exploration expenditures of an aggregate of $1,125,000 ($250,000 by December 31, 2016; $375,000 by December 31, 2017 and $500,000 by December 31, 2018). The parties agreed to extend the deadline date for the Company to fund exploration work of $1,125,000 to December 31, 2019 and the Company shall forthwith, upon regulatory approval, issue 500,000 common shares (5,000,000 pre-consolidation) shares. In order to close the transaction, the Company must have adequate funds available and the transaction is subject to the approval of the TSX Venture Exchange. The transaction is arm’s length.

Further to the press release dated August 20, 2019, announcing the engagement of Leede Jones Gable Inc. (the “Agent”) as lead agent on a commercially reasonable agency basis to undertake a brokered private placement (the “Offering”) of a combination of Units (as hereinafter defined) and FT Shares (as hereinafter defined) for gross proceeds of up to $2,750,000, the Company discloses that it will be relying on certain prospectus exemptions including but not limited to, the Existing Security Holder Exemption and BC Instrument 45-536 Exemption from prospectus requirement for certain distributions through an investment dealer. An exemption where the purchaser has obtained advice regarding suitability from a person registered as an investment dealer.

Subject to applicable securities laws, the Company will permit each person or company who, as of September 13, 2019 (being the record date set by the Company pursuant to Multilateral CSA Notice 45-313 – Prospectus Exemption for Distributions to Existing Security Holders) (“CSA 45-313”), who hold common shares as of that date (a “Current Shareholder”) to subscribe for the Units and FS Shares that will be distributed pursuant to the Offering, provided that the Existing Security Holder Exemption is available to such person or company.

Pursuant to CSA 45-313, each subscriber relying on the Existing Security Holder Exemption may subscribe for a maximum of 300,000 Units or 300,000 FS Shares, being such amount of Units and FS Shares that results in an acquisition cost of less than or equal to $15,000 for such subscribers, unless a subscriber is resident in a jurisdiction of Canada and has obtained advice regarding the suitability of the investment from a registered investment dealer (in which case such maximum subscription amount will not apply). In the event that aggregate subscriptions for Units or FT Shares under the Offering exceed the maximum number of securities to be distributed, then Units will be sold to qualifying subscribers on a pro rata basis based on the number of Units or FT Shares subscribed for. In addition to conducting the Offering pursuant to the Existing Security Holder Exemption, the Company will also accept subscriptions for Units or FT Shares where other prospectus exemptions are available. Any Current Shareholder subscribing for Units or FT Shares pursuant to a prospectus exemption other than the Existing Security Holder Exemption will not be limited to a maximum of 300,000 Units or 300,000 FT Shares.

The Company also advises that the insiders of the Company may also participate in the financing, which will be completed pursuant to available related party exemptions under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions.

Up to 20,000,000 units (the “Units”) of the Company will be offered at $0.05 per Unit to raise gross proceeds of up to $1,000,000. Each Unit will consist of one (1) common share and one half of one (1/2) common share purchase warrant (“Warrant”). Each full Warrant shall entitle the holder to acquire one (1) common share at $0.07 per share for a period of 24 months following closing. Up to 35,000,000 flow through shares (the “FT Shares”) will be offered at $0.05 per FT Share for gross proceeds of up to $1,750,000.

The gross proceeds from the issuance of the FT Shares will be used for Canadian exploration expenses and will qualify as flow-through mining expenditures, as defined in Subsection 127(9) of the Income Tax Act (Canada), which will be renounced to the subscribers with an effective date no later than Dec. 31, 2019, to the initial purchasers of the offered securities in an aggregate amount not less than the gross proceeds raised from the issue of the flow-through shares, as applicable, and, if the qualifying expenditures are reduced by the Canada Revenue Agency, the company will indemnify each FT subscriber for any additional taxes payable by such subscriber as a result of the company’s failure to renounce the qualifying expenditures as agreed.

The net proceeds from the Offering of the Units and the gross proceeds from the Offering of FT Shares will be primarily used for: (1) approximately $50,000 for a new Resource Estimate prepared in accordance NI #43-101 regulations which will include recent drill results from the Refractory Zone; (2) approximately $700,000 for completion of work required for a Preliminary Economic Assessment (PEA), including but not limited to, metallurgical/engineering testing and drilling, community relations, testing for conversion to spherical graphite for use in graphite anodes, environmental assessment and extraction and processing cost studies; (3) fund exploration work of $1,125,000 to December 31, 2019, $425,000 on exploration in 2020; and (4) approximately $150,000 to pursue potential off-take partners, fees and for general working capital. While the Company intends to spend the net proceeds from the Offering as stated above, there may be circumstances where, for sound business reasons, funds may be reallocated at the discretion of the Board.

The closing of the Offering is expected to occur on or about October 30, 2019. Closing is subject to a number of prescribed conditions, including, without limitations, approval of the TSX Venture Exchange. All the securities issued under the Offering are subject to resale restrictions under applicable securities legislation.

Offering Jurisdictions

The Offering will take place by way of a brokered private placement to qualified investors in such provinces of Canada as the Agent may designate, and otherwise in those jurisdictions where the Offering can lawfully be made under applicable exemptions.

Agent’s Compensation

On the Closing of the Offering, the Company has agreed to pay to the Agent, subject to certain exclusions, a commission equal to 8% of the gross proceeds arising from the Offering. At the closing of the Offering, the Company will also issue to the Agent non-transferable warrants exercisable at any time up to 24 months from closing, to acquire common shares from treasury in an amount equal to 8% of the aggregate number of units and FT shares issued pursuant to the Offering.

The Company discloses that there are no material facts or material changes about the Company that has not been generally disclosed.

The Corporation does not expect to provide any offering materials to subscribers in connection with the Offering.

For more information on the Company, review the website at www.lomiko.com, contact A. Paul Gill at 604-729-5312 or email: [email protected].

On Behalf of the Board,
LOMIKO METALS INC.

A. Paul Gill,
Chief Executive Officer

SPONSOR: Lomiko Metals LMR:TSX-V – A Canadian exploration-stage company discovered high-grade graphite at its La Loutre Property in Quebec and is working toward a Pre-Economic Assessment (PEA) that will increase its current indicated resource of 4.1 Mt of 6.5% Cg to over 10 Mt of 10%+ Cg through a 21 hole program at the Refractory Zone. Click Here For More Information

The world’s biggest carmaker announced Friday that it had struck a deal with Sweden’s Northvolt to build a giant battery factory in Germany. It also confirmed production dates for two new models key to the group’s success.
A. Paul Gill, CEO of Lomiko Metals (TSXV: LMR, OTCQB: LMRMF) noted that the graphite supply from China to Europe and North America has dropped tremendously over the past few years. This market change may be an opportunity for the Company as European and North American battery manufacturers are now looking for stable suppliers. “If we’re going to continue to expand the electric vehicle industry in Europe and  North America, we’re need a secure supply of raw materials.”,stated Gill. “The shortage of graphite is going to be a real concern in the coming years.”,he added.
The German company said production of lithium-ion batteries would begin in late 2023 or early 2024, a move that will be vital to Volkswagen’s (VLKAF) ability to mount what it calls “the largest electric offensive in the automotive industry worldwide.”
The group plans to launch almost 70 new electric models in the next decade, and hopes to build 22 million electric cars over this period. It is investing more than €30 billion ($33 billion) into electrifying its fleet over the next four years, prompted in part by pressure from regulators and the fallout from its diesel emissions scandal.
If successful, Volkswagen could overtake rivals such as Tesla (TSLA) and Warren-Buffet-backed BYD in China.

Battery factory big win for Europe

Lithium-ion batteries, the majority of which are currently produced in China, are a critical part of Volkswagen’s electrification strategy. Batteries account for about a third of the cost of electric cars, according to consulting firm Wood Mackenzie.
China is home to 70% of global lithium cell manufacturing capacity, with the United States in second place at 12%, said Simone Tagliapietra, a climate and energy fellow at Bruegel, the European economic think tank. Europe lags behind and hosts only about 3% of global production capacity, according to the European Commission.
The Volkswagen-Northvolt deal represents a “very significant investment for the future of European battery production,” Tagliapietra told CNN Business.
Volkswagen is investing €900 million ($993 million) into the Northvolt joint venture. Some of the money will go into the German factory, the rest will secure Volkswagen a 20% stake in Northvolt and a seat on its supervisory board.
Volkswagen also confirmed that production of the new ID.3 electric car series would begin this November, with the first models delivered to customers next year. It has already sold out a limited edition of the ID.3, which is due to make its world debut on September 9 at the Frankfurt Motor Show.
Also premiering at the show will be an electric version of the vintage Volkswagen Beetle. The conversion of the Beetle is being done by a specialist partner company, eClassics, and will use of components from the new VW e-up! city car. Porsche, one of Volkswagen’s premium brands, confirmed on Friday that it would start producing its first all-electric sports car — the Taycan — on September 9.

A New Production Plant

Alongside investing in battery production, Volkswagen is pouring €1.2 billion into overhauling its Zwickau vehicle plant, which formerly produced internal combustion engines, so that it can make electric cars. This process began in 2018 and is expected to be completed by 2020. By 2021, the plant is expected to produce 330,000 vehicles per year, making it Europe’s “largest and most efficient electric vehicle plant,” according to Volkswagen.
The ID.3 will be the first vehicle to be built on this new modular electric car production platform, or MEB. In the next three years, production of 33 models across the group’s brands is due to start on the MEB. 

SPONSOR: Lomiko Metals LMR:TSX-V – A Canadian exploration-stage company discovered high-grade graphite at its La Loutre Property in Quebec and is working toward a Pre-Economic Assessment (PEA) that will increase its current indicated resource of 4.1 Mt of 6.5% Cg to over 10 Mt of 10%+ Cg through a 21 hole program at the Refractory Zone. Click Here For More Information

• Porsche will be investing over US$6 billion in battery power over the next few years
• Markedly superior to the Tesla Model S it competes with.

It just debuted two days ago, but Porsche has already taken some 30,000 deposits for its new Taycan. Not exactly Tesla numbers, but impressive nonetheless. Closer to home, more than 1,000 Canadians have plunked down $2,500 hoping to secure one of the first electrified Porsche four-doors to hit the street. Again, neither number rivals the multitudes that offered up deposits on Tesla’s Model 3, but Taycan does play in an entirely different snack bracket.

A more appropriate context, then, might be to note that said deposits are roughly equal to the number of 911s that Porsche Canada sells in its best of years. In other words, September 4’s worldwide launch of the Taycan was a very good day at the office for Porsche Canada’s president and CEO, Marc Ouayoun.

Now, never mind that a few of those chomping at the bit may well be put off by the Taycan’s price — the base Turbo starts at $173,900 and the Turbo S is a wallet-stretching $213,900. If that means Porsche has finally brought profitability to the electric vehicle segment, so much the better.

More important is that the company is depending on the Taycan to be successful, Detlev von Platen, Porsche’s executive board member for sales and marketing, telling the launch event attendees the company will be investing over US$6 billion in battery power over the next few years and expects more than 50 per cent of the company’s cars to be electrified within the next decade. In other words, Porsche needs the Taycan to be successful.

And more important than that is that the automotive industry needs the Taycan to be successful. So far, the electric vehicle segment has been all Tesla, the Silicon Valley upstart the only truly successful purveyor of battery power. Yes, I know Nissan’s Leaf remains the best-selling EV of all time, but, while semi-plentiful, it’s actually selling well below – barely 10 percent of initial projections – what was predicted when it was introduced ten years ago.

Tesla, meanwhile, has become the poster child for planet-friendly motoring, Elon Musk’s decision – whether it was brilliant insight or bulls%^t luck really doesn’t matter – to focus on the luxury segment proving to be providential. Whither goes Tesla, it now seems, goes the entire electric vehicle industry.

The problem is that Mr. Musk’s influence – and the cult-like devotion it has engendered – is not good for anyone except Tesla shareholders.

Whether you’re a fan of long-range plug-ins or prefer fuel cells, it is not so much that Tesla is winning, but that Mr. Musk so dominates the conversation surrounding EVs that it stifles discussion into what a truly multi-platform zero-emissions future might look like.

Now, to be certain, the company and man – for they are one and the same – deserve all the accolades they have received for a) creating the luxury EV segment where none existed and b) legitimizing the concept of the battery-powered car in the eyes of a formerly skeptical audience. For that, Mr. Musk will undoubtedly be lauded in history books as the founder of a movement.

The problem is that said worship has gone too far, creating disciples for whom any dissent, any mention of competitive brands is seen as traitorous. In my 35 years in this biz, I have see nothing – not the Ford-versus-Chevy wars, not Jeep Wrangler aficionados, not even “one-per-centers” devoted to their Hogs – to match the cult-like allegiance Tesla enjoys amongst its minions.

Unfortunately, that deference is stifling competition. Despite the deception that traditional automakers are dragging their heels on electrification, nothing could be further from the truth. The problem they all face is that, any time they introduce a (costly-to-develop) EV, they are met with the mildest of “mehs.”

Initially, they were decried as too ugly (Chevy’s Bolt), too slow (the Kia Soul) or lacking in panache (pretty much everyone). But, then Jaguar came out with the I-Pace, offering both pedigree and panache. Yet they too were greeted with another giant yawn. Too slow, said the disciples, ignoring the fact there’s more to a sporty automobile than Ludicrous acceleration. So I-Pace sales have crashed. Audi’s e-tron? Better, but hardly all-conquering, especially considering that the Model X with which it competes is the weakest model in Tesla’s lineup.

And that’s why the Taycan is so important. It meets every single objection even the most devoted of Teslarati could dream up. Brand image? None is stronger than Porsche’s. Build quality? Ditto. Beauty? The Taycan is the four-door 911 that Porsche always promised the Panamera would be. Ludicrously fast? My Lord, yes. Toss in handling that is all but a match for the best of supercars and you have a car that is markedly superior to the Tesla Model S it ostensibly competes with.

Oh, the haters will no doubt point to its price as an objection, but the fact remains that, if the Taycan fails to become a genuine Tesla rival – if not in sales then at least in influence – then we really may have to come to grips with the possibility that what we have been projecting as an electrified future is really just cult worship writ especially large.