A look at a mineralized outcrop containing Platinum Group Metals (PGMs) on the River Valley project site. Metals such as PGMs and lithium will continue to experience sustained increases in demand as the global push for sustainability becomes mainstream.

• The future of transportation is poised for sustainability through the global adoption of hybrid electric vehicles (HEVs) and fully battery electric vehicles (BEVs)
• Industry experts are forecasting a consistent increase in demand for lithium, used to develop the batteries in HEVs and BEVs
• Industry experts are also forecasting an increase in demand for the Platinum Group Metals (PGMs) used by autocatalyst manufacturers, to ensure compliance with tightening emissions regulations
• New Age Metals’ flagship River Valley primary PGM project in Ontario, and lithium division with assets in Manitoba positions the company as a key player in the growth of HEVs and lowering CO2 emissions

By: Jason Smith

Harmful carbon dioxide emission levels are rising globally, largely due to the use of fossil fuels as the primary source of energy used by the transportation industry. Examples of this use include the powering of jumbo jets, container ships and semi-trucks. Passenger vehicles also rely on fossil fuels and have a bad reputation for the amount of pollutants they release into the atmosphere on a daily basis.

However, passenger vehicles produce more than four times the greenhouse gas (GHG) emissions of all domestic aviation, according to the Globe and Mail. The focus over the last few years has been on making these passenger vehicles more environmentally-friendly, which is a large reason why automakers have started producing electric or hybrid electric vehicles (HEVs).

While automakers are being forced by emissions regulation to reduce their carbon footprint, the majority of consumers are not ready to go fully electric and are increasingly choosing hybrid vehicles to bridge the gap with cars that solely use batteries. With more vehicles being sold worldwide each year, especially those that are less pollutive, automakers will need more of the critical raw materials used to create the hybrid and electric vehicles.

This need for less pollutive methods of transportation is where lithium and palladium enter the picture. Lithium is used to produce batteries, but the size of car batteries used in HEVs and the increase in HEV sales that is anticipated by the industry will require substantially more lithium than what is available in the market today. Palladium, which is a member of the PGM family, is largely used to reduce pollution that originates from vehicles operating with internal combustion engines (ICE) through its use as the primary ‘catalyst’ in catalytic converters (commonly known as auto-catalysts).

While palladium is often overlooked when it comes to the push for sustainability, it has played a huge role in reducing the amount of toxic emissions being released into the atmosphere. This positive impact is most noticeable in urban areas where automobiles are concentrated. The value of an ounce of palladium has increased exponentially in the past year, rising 60 per cent year-over-year in Sept. 2019 from under USD$950 to over USD$1500. The reason for the dramatic price movement is due to supply concerns and the metals value as the premier option for use in auto-catalysts.

With ICE-powered vehicles not going away any time soon, the global demand for palladium will endure as a pollution-control device, and investors are taking notice. Anton Berlin is the head of strategic marketing at the world’s largest producer of Palladium, Norilsk Nickel. He recently stated, “Hybrids — cars with both an electric battery and a combustion engine — will dominate the electric vehicle market in the long-run, which suggests a long-term advantage for the PGM market.”

The extensive infrastructure required to support a universal transition to EVs still needs time to be completely fleshed out but is gaining speed. According to a new report entitled, “2019 Investor’s Business Daily/TIPP Electric Vehicle Outlook Study,” range and available charging stations are what make potential EV buyers the most apprehensive, although these are issues that are currently being addressed.

Regardless, the desire to limit pollution is leading to the growing demand for middle-ground HEVs, which is causing car manufacturers to focus on their abilities to design and assemble automobiles that emit less noxious fumes primarily through the use of palladium and lithium.

Research has shown that hybrid electric vehicles actually require more palladium and lithium than traditional gasoline-powered vehicles, so increased adoption of hybrid vehicles will subsequently increase demand for these metals.Harry Barr, CEO, New Age Metals.

A flagship project in a historic mining district

Anticipating the continued strength in demand for palladium and the general forecast for lithium demand is New Age Metals (TSX.V: NAM, OTCQB: NMTLF, FSE: P7J), bolstered by the company’s flagship River Valley project in the Sudbury region of Ontario. The Sudbury region, known as the mining capital of Canada, is largely dominated by major mining and processing operations run by Vale and Glencore.

However, these companies’ operations are facing depleted ores to feed processing facilities and may need to acquire additional sources to operate closer to their intended capacity. This is where River Valley comes in as an integral player, which lies just 100 km from Sudbury and hosts 2.9 million ounces in the (NI-43 101 compliant) measured and indicated category of palladium-equivalent (PdEq) resources and 1.1 million ounces in the inferred category.

Diagram of New Age Metals’ current project locations. Supplied

Harry Barr, CEO of New Age Metals, is well aware of the role his company is poised to play as demand for hybrids continually increases. “Research has shown that hybrid electric vehicles actually require more palladium and lithium than traditional gasoline-powered vehicles, so increased adoption of hybrid vehicles will subsequently increase demand for these metals,” he notes.
New Age Metals recently had a preliminary economic assessment completed on River Valley, projecting a mine with a 14-year lifespan, 6 million tonnes annually of potential process plant feed at an average grade of 0.88 g/t PdEq and a process recovery rate of 80 per cent, resulting in an annual average payable PdEq production of 119,000 ounces.

Barr elaborates, “It’s unique to have a deposit of mineable platinum group metals in North America, and very unique to have a deposit near so much processing infrastructure that’s also close to car manufacturers,” emphasizing the advantageous position the company finds itself in with River Valley. 

With this in mind, Barr and his team are focused on maximizing this opportunity to expand the resources at River Valley and develop it to a point where the project achieves feasibility and is producing. In the meantime, the project also has tremendous exploration upside and management plans to continue with an aggressive exploration program.
A credible investment alternative to the big PGM players

A key advantage for the River Valley project is its location in a safe, reliable mining jurisdiction. The majority of the world’s palladium currently comes from South Africa and Russia, both of which could be problematic in terms of long-term supply security, political issues and concerns regarding human rights and sustainability.

Worth noting is the fact that Norilsk Nickel is not only the worlds’ largest producer of palladium and nickel, but also the largest emitter of sulfur oxides which is a pollutant considered immediately dangerous to life and health.

Fortunately, New Age Metals’ Ontario-based project offers the benefit of being located in a safe jurisdiction that has excess processing infrastructure and is known for moderating the environmental impacts from mining and smelting. Barr explains, “Sudbury’s been a mining center for 120 years, so every type of mining service is nearby.” Given this unique situation, the company represents a credible investment opportunity.

Sid Rajeev, vice-president of Fundamental Research Corp., conducted a thorough analysis of the River Valley PEA. He notes, “Our biggest takeaway from the PEA was that, at a reasonable palladium price estimate of USD$1,200 per oz, the study showed an after-tax net present value at 5 per cent of $138 million. New Age Metals’ current enterprise value is just USD$3 million, implying that shares are trading at just 2 per cent of net asset value.”

This level of potential upside is rarely available to the investment community and as New Age Metals brings River Valley towards pre-feasibility, it’s unlikely that the company will remain undervalued for long.

Our biggest takeaway from the PEA was that, at a reasonable palladium price estimate of USD$1,200 per oz, the study showed an after-tax net present value at 5 per cent of $138 million. New Age Metals’ current enterprise value is just USD$3 million, implying that shares are trading at just 2 per cent of net asset value.Sid Rajeev, vice-president, Fundamental Research Corp.

Having a substantial deposit of PGMs in North America positions New Age Metals to benefit from the future of sustainability, however there is a general lack of knowledge about PGMs in North America due to the low number of primary PGM producers in the arena. The company is in the process of moving River Valley along the development curve but is also seeking a qualified partner to assist in further exploration and development of the project.

New Age Metals’ lithium angle

Adding to the company’s green energy story is its suite of lithium projects in Manitoba. The demand for this metal is forecasted to increase by 20 per cent per year through to 2028. With lithium in high demand due to the ever-increasing growth in the popularity of battery-powered vehicles, these projects give the company optionality on lithium discovery; two of its eight projects are currently drill-ready. Plans to drill on the ‘Lithium One’ and ‘Lithium Two’ are in place and company management is anticipating the initiation of these drill programs in the near future.

The company’s lithium projects are situated along strike of the Tanco Pegmatite and the claims encompass several pegmatite groups. The projects are also located 140 km northeast of Winnipeg, Manitoba. The Tanco mine was owned by the Cabot Corporation who announced in Jan. 2019, that it would be selling the mine to Sinomine Rare Metals Co. Ltd for USD$130 million. This sale demonstrates a high interest in the project and potentially the surrounding area, which lends credibility to New Age Metals’ projects, based on shared geology and proximity.

Exploration on Lithium One is ongoing with concentration of the northern section, with focus on the Annie and Silverleaf Pegmatites. Silverleaf Pegmatite has zones of spodumene and lepidolite exposed on surface with samples up to 4.1 per cent lithium oxide (Li2O). The Annie Pegmatite returned values up to 0.6 per cent Li2O and 0.37 per cent Ta2O5.

On Lithium Two, the Eagle Pegmatite is exposed on surface and was last drilled in 1948, and at the time it was indicated that it remains open to depth and along strike. A historic tonnage of 544,460 tonnes of 1.4 per cent Li2O was reported during this year, however the actual amount has not been confirmed by a qualified person at this time.

An ownership map showing Tanco Mine location proximity to New Age Metals projects. Supplied

With drilling set to begin in Manitoba and River Valley continuing to move along the development curve, New Age Metals expects to consistently generate valuable news for investors in the coming months, keeping the company top-of-mind. Its position in palladium and lithium provide the company with incredible potential as a high-performing source for investment as the need for sustainable transportation continues to be a significant social issue.

To learn more about New Age’s operations and project portfolio, visit them online: newagemetals.com

The following video is a short overview of New Age Metals, and outlines some of the reasons why the company is an avenue for investment in the future of sustainability associated with the electrification of transport

WATCH VIDEO

Source: https://business.financialpost.com/business-trends/increasing-popularity-of-hybrid-vehicles-aiding-global-push-for-sustainability

SPONSOR:

• The company hosts North America’s largest primary PGM deposit
• Updated NI 43-101 Mineral Resource Estimate of 2,867,000 PdEq Measured and Indicated Ounces, with an additional 1,059,000 PdEq Ounces Inferred

Read More

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By MyraP. Saefong Markets/commodities reporter

• Palladium futures topped $1,600 an ounce on Thursday to finish at the highest level on record, shaking off recent data showing a decline in Chinese auto sales, as emissions standards fueled bets surrounding strong demand for the metal used in pollution-control devices.

“Palladium has witnessed a resurgence in price over the past two months, much in line with other hard assets such as gold, platinum and silver,” said Ryan Giannotto, director of research at exchange-traded fund issuer GraniteShares. “What distinguishes palladium is its unique position spanning precious and specialty industrial metals, and this latter characteristic has benefited the metal in the momentary detente in the U.S.-China trade conflict.”

President Donald Trump on Wednesday announced he would delay a tariff hike —from 25% to 30%—that was scheduled to take effect Oct. 1, until Oct. 15., “as a gesture of goodwill.”

The rally in palladium, which used in vehicle pollution-control devices, comes despite data this week from the China Association of Automobile Manufacturers which showed that China’s total auto sales fell 6.9% from the same month a year earlier to 1.96 million, according to Reuters.

Palladium for December delivery PAZ19, +3.65%  climbed $48, or 3.1%, to settle at $1,604.80 an ounce on Comex after tapping a high of $1,616.50. Prices for the most-active contract have never settled above the $1,600 mark, based on records going back to January 1977, according to Dow Jones Market Data.

The metal previously settled at a record $1,588.10 on July 10 of this year and has gained 50% in the year to date.

“Auto sales have slowed, but this is more than completely offset” by increased loadings per car for transport on China 6 emission standards and “real-world driving (as opposed to fixed-in-a-lab testing) in Europe, R. Michael Jones, president and chief executive officer of Platinum Group Metals Ltd. PLG, -1.16% told MarketWatch. “In the USA, strong SUV and truck sales are also creating continued demand.”

Annualized August auto sales in the U.S. were “better than expected” and up 2% year-over-year at 17 million vehicles, equal to a three-month average, analysts at Evercore ISI wrote in a note last week.

Looking ahead, aggressive interest-rate cuts “should be supportive to auto sales and palladium, as long as the risk-on mood continues…,” analysts at Zaner Metals said in a daily report Thursday.

Source: https://www.marketwatch.com/story/palladium-prices-top-1600-to-tally-highest-settlement-ever-2019-09-12

SPONSOR: New Age Metals Inc. The company’s Lithium Division has already made significant acquisitions in Canada and the USA. The company also owns one of North America’s largest primary platinum group metals deposit in Sudbury, Canada. Updated NI 43-101 Mineral Resource Estimate 2,867,000 PdEq Measured and Indicated Ounces, with an additional 1,059,000 PdEq Ounces in the Inferred. Learn More.

China’s breaking up the EV battery monopoly it carefully created

By Echo Huang

As China phases out subsidies for electric vehicles next year, it’s also ending a related policy that effectively shut out foreign battery makers, creating the domestic monopoly we see today.

China’s Ministry of Industry and Information Technology (MIIT) announced yesterday (June 25, link in Chinese) it is dropping its practice of publishing lists of battery makers that met technical standards. The policy, put in place in 2015, was meant to help develop the industry. Supplying the information to get on the list was supposedly voluntary (link in Chinese), but in reality, using the batteries on the ministry’s lists made it more likely car makers would qualify for government subsidies. As of 2016, the last time the list was updated, it included a total of 57 companies—none of them foreign firms.

As a result, the top 10 battery makers powering the world’s largest EV market are all Chinese (link in Chinese), according to 2018 data from the China Battery Industry Association. That means China dominates the value-added chain for domestically made electric vehicles, since batteries contribute 40% of the cost of an EV—quite a contrast to the value added when China assembles an iPhone.

Financial newspaper Economic Observer noted (link in Chinese) in April last year that Chinese car makers made their component decisions from the lists, while local governments and investment firms also consulted them. “Associated with subsidies, these became known as the ‘white lists,’” the newspaper said.

The lists included CATL, the world’s largest EV battery maker (Quartz membership), which supplies Chinese and foreign carmakers that include state-owned BJEV, one of the country’s biggest manufacturers, Volkswagen, Daimler, BMW, Honda, and Shanghai-based startu NIO. The world’s biggest EV manufacturer, BYD, is also the country’s second-biggest battery supplier, since it makes the batteries for its own electric cars—last year it sold some 100,000 of them. Both BYD and CATL could supply batteries to Toyota cars soon. In third place is Guoxuan High Tech, a major supplier to state-owned carmaker BAIC Motor, the parent company of BJEV.

This situation isn’t the case everywhere. Tesla, the biggest US EV firm, gets its batteries from Japanese electronic firm Panasonic, France’s Renault sources the batteries for its ZOE electric vehicle from South Korea’s LG Chem.

Taking away the lists could benefit established foreign battery makers. “It’s a gesture of China opening up, along with pressure from G20 and trade,” says Qiu Kaijun, who runs an EV news blog (Quartz membership). Chinese president Xi Jinping is set to discuss US-China trade tensions with US president Donald Trump on the sidelines of the G20 meeting of leaders of top economies, which begins in Japan Friday.

Before the policy was put in place, when China’s EV market was starting to take off, foreign firms like LG and fellow South Korean major Samsung were about to expand (link in Chinese) in China. In 2015, LG had opened a battery factory in China’s eastern city Nanjing that could supply to more than 100,000 EVs (link in Chinese), yet it never got on the white list and the factory ended up being sold to Zhejiang-based carmaker Geely in 2017 (link in Chinese).

“Earlier, all the subsidies went to those using Chinese EV batteries—if you use LG and Samsung, you won’t get subsidies,” said Angus Chan, a Shanghai-based auto analyst at Bocom International, “When 2020 comes, it will be free-market competition. It’s straightforward for carmakers—energy density, safety, and price… Everybody is on the same racing starting point in the post-subsidy era.”

China began reducing its massive subsidies two years ago, and will move to a credit system next year.

The scrapping of the battery lists comes at a time when China has rolled out the welcome mat for foreign EV firms in other ways. China last year said it would phase out foreign investment limits for car manufacturing, a rule that earlier made it impossible for foreign car makers to set up shop in China without a local partner. That reform began with manufacturers of electric vehicles, allowing Tesla to become the first foreign car maker with a wholly-owned plant in China. Located in Shanghai, it is taking orders for the first made-in-China Teslas, which are expected to roll out in the next six months.

Other new rules limiting the number of new factories in a province mean Tesla’s factory has put a spanner in the works for local manufacturers who were also hoping to set up near one of the country’s most important cities for EV sales. It’s clear China’s EV industry is going to put under greater pressure as a result of these moves—which could improve their technologies, or kill off some of the weaker firms.

Already, CATL is looking beyond China, setting up offices in France, Canada, Japan, and Germany (Quartz membership).

“What happens after the typhoon passes?” asked Zeng Yuqun, CATL’s founder, in an internal email (link in Chinese) in 2017. “Can a pig really fly?”

He was referring to a Chinese allegory—“When the typhoon comes, the pig will fly”—comparing the government subsidies to strong winds lifting the company’s fortunes, and warning of a possible heavy landing once those winds die down.

Looking for more in-depth coverage? Sign up to become a member and read more in-depth coverage of China’s electric-car boom in our field guide.

Source: https://qz.com/1651944/china-ends-policy-steering-ev-makers-to-local-battery-firms/

SPONSOR: New Age Metals Inc. The company’s new Lithium Division has already made significant acquisitions in Canada and the USA. The company also owns one of North America’s largest primary platinum group metals deposit in Sudbury, Canada. Updated NI 43-101 Mineral Resource Estimate 2,867,000 PdEq Measured and Indicated Ounces, with an additional 1,059,000 PdEq Ounces in the Inferred. Learn More.

The lithium industry needs a $17b injection to meet 2025 demand – here come the deals

• One expert says at least US$12 billion ($17.3 billion) needs to be invested in new lithium projects by 2025 if the industry is to have any realistic hope of matching supply with demand

Angela East

Corporate deals in the lithium industry are heating up at a time when there is a predicted multi-billion-dollar cash injection needed to ramp up supply to meet rapidly growing demand.

One expert says at least US$12 billion ($17.3 billion) needs to be invested in new lithium projects by 2025 if the industry is to have any realistic hope of matching supply with demand.

US lithium expert Joe Lowry told delegates at the Latin America Downunder mining conference in Perth that the ‘Big Four’ global lithium producers – SQM, Albemarle, Jiangxi Ganfeng Lithium and Tianqi – could not alone meet 2025 lithium demand.

“Overall, the industry faces a lack of financing and needs to inject more than US$12 billion within five years to have a chance of meeting demand,” he said.

“This requirement is exacerbated further by known and emerging failures in lithium start-ups which have demonstrated a lack of necessary skillsets – high profile failures that have discouraged sector investment.

“There will not be any significant lithium chemical oversupply anytime soon. While there have been many optimistic supply forecasts, recent results speak for themselves.”

Pfft. What lithium glut?

Lowry took aim at Morgan Stanley and other analysts that previously predicted a flood of new lithium supply would hit the market this year causing an oversupply and pushing down the price.

He dismissed the forecasts of oversupply as a myth.

“The ‘myth’ is driven by reports from ‘big bank’ analysts and supported by statements by Chilean regulator, CORFO, after its revised agreements allowing Albemarle and SQM to produce more material from the Atacama brine resource,” Lowry said.

“The reality is increasing production quickly is not so easy.”

Last year there was about 270,000 tonnes of lithium demand and Lowry estimates that will rise to about 1 million tonnes in 2025.

“It’s pretty much not argued anymore that e-mobility is happening — whether it’s EVs or scooters or ferries in Scandinavia, the transition to e-mobility is on,” Lowry said.

“My numbers are actually some of the lower numbers out there.”

Battery-related lithium demand in 2018 accounted for 60 per cent, up from 25 per cent five years earlier.

“So this market is becoming a battery-related market. There’s really no question about that,” Lowry said.

But new lithium supply is hard to bring online and SQM, Albemarle, Jiangxi Ganfeng Lithium and Tianqi are likely only be able to maintain their 68 per cent market share, according to Lowry.

“Almost every lithium project that has ever started with optimism has taken three or four years longer to reach full capacity and that’s what we’re seeing,” he said.

“That means there’s a lot of juniors or smaller companies around the world that need to get financed and need to get moving.”

Deal-making steps up a gear

Close on the heels of Wesfarmers’ seminal $776m bid for Kidman Resources (ASX:KDR), Galaxy Resources (ASX:GXY) has tipped $22.5m into more junior producer Alliance Mineral Assets (ASX:A40) to become its largest shareholder.

The cash injection gives Galaxy a roughly 11.5 per cent interest, and a blocking stake, in Alliance, managing director Mark Calderwood told Stockhead.

Galaxy’s investment was part of a larger $32.5m placement at 20c per share, which also included $10m from a subsidiary of Jiangxi Special Electric Motor Co.

Jiangxi has about a 9.9 per cent stake in Alliance.

“I guess from [Galaxy’s] point of view it’s stopping us from being a target for someone else to come and grab, and we were the cheapest lithium miner in the market,” Calderwood said.

“Both Jiangxi and Galaxy are a lot bigger than we are, they’re both experts in their sectors so that’s good for us and it enables us to be cooperative in the future.

“Both parties have either a blocking stake or almost a blocking stake.”

Australia’s downstream gaining momentum

Right now, Australia has absolutely zero per cent share of the global lithium chemical market, but the Galaxy-Alliance deal is another step towards building the country’s downstream industry.

“I think [Galaxy] has desires to go further downstream as well, and Jiangxi [Ganfeng Lithium] already has that joint venture with Jiangxi Special Electric Motors, which is downstream, but there’s other things we can do as well,” Calderwood said.

The battery supply chain is a $2 trillion market opportunity, and a report released at the start of 2018 gave Australia about 18 months to two years to get cracking on building its downstream industry.

Over a year into that deadline, the federal government has established a new Future Batteries Industries Cooperative Research Centre (FBI CRC) in Western Australia.

The research partnership of 58 industry, academic and government partners will address industry-identified gaps in the battery industries value chain.

The goal is to expand battery minerals and chemicals production and develop opportunities for manufacturing batteries in Australia.

Good time to invest

Lowry says rapidly rising demand and the difficulty in bringing new lithium supply online supports his “thesis” that the market is going to outgrow supply.

“Anyone who is interested in investing in the lithium market has a great opportunity now because share prices are very, very depressed,” he said.

“If you look at the market caps of some of the Australian companies, even the ‘Big Four’ companies, their market caps are very much down from where they were a couple of years ago.

“So if you’re interested in lithium, I would tell you now’s a good time to get in.”

Source: https://stockhead.com.au/resources/the-lithium-industry-needs-a-17b-injection-to-meet-2025-demand-here-come-the-deals/