Thursday, 17 September 2015

Tesla, Lithium Bottlenecks And Royalty.

  

  No, I will not write today about Her Majesty - I have sent her my sincere apologies for twitter induced use of Queen's English long time ago and now you have to bear with me. I am still on my beloved subject of Lithium Technology and critical materials feeding our rEVolution.
  International Lithium is making its advance and finally is getting some respect from the Mr Market. TNR Gold is our holding company and we are transitioning it into the Energy And Precious Metals Royalty Company. Royalties are often overlooked as not a lot of people really understand how they work. I will try to give you a very short intro today.
  Junior company normally starts with 100% ownership on the project. It will spend some of its own capital to advance or de-risk the project to the stage when Major in that particular industry will get interested. This is exactly what happened with International Lithium and Ganfeng Lithium. J/V is formed when in exchange for the invested into the project capital Junior will be stepping down in the ownership and Major will be increasing its stake in the project. Now Ganfeng is financing International Lithium J/Vs in Ireland and Argentina. Junior is not putting its own capital at risk any more and will be left at some stage with a smaller stake, but in a much more valuable project, hopefully. At the point of building the mine Junior has a few options in this strategy:

1. Sell its stake in the project to the Major or another financial player like Royalty or Metal Streaming company.

2. Participate in the construction proportionally to its stake.

3. Get diluted below 5% (as it is in ILC case) and receive the Royalty on the project without contributing any more capital. 





  One of the best examples of success in this business will be Royal Gold Co and you should study this company. Despite of the bear market in gold, Royal Gold has demonstrated very stable relative performance after its incredible advance during the bull gold market. I was buying first Royal Gold at $5 and still have very sweet memories about that ride! Now you are welcome to join me with International Lithium and TNR Gold. It is all in public domain, but nobody is reading any more. TNR Gold holds Royalty on Mariana Lithium project with Ganfeng Lithium now and 25.5% in International Lithium among its other assets. How Tesla has ignited Lithium Race and how this NSR Royalty works you can find on the links below.


The Future Of Oil: Electric Cars Have Reached The Point Of No Return With Tesla Gigafactory.



"Tesla Gigafactory alone will produce the same amount of lithium batteries capacity as the whole world in 2013! It will consume close to 17% of existing lithium supply. I have calculated that only Tesla Gigafactory, LG Chem, BYD, Boston Power and Foxconn will consume 42% of the existing Lithium Supply! Add here Samsung, A123 and … 17 new ventures in China rushing to accommodate the falling from the skies stimulus money. A lot will be wasted, but some will come on-line. This is The Next Fifty Years Plan in action."


Wikipedia:

Net Smelter Return.

From Wikipedia, the free encyclopaedia

Net Smelter Return (NSR) is the net revenue (total revenue minus production costs) that the owner of a mining property receives from the sale of the mine's metal/non metal products less transportation and refining costs. As a royalty it refers to the fraction of net smelter return that a mine operator is obligated to pay the owner of the royalty agreement. The royalty is paid in variable or fixed payments based on sales revenue received by a mining operator in return for mining output. It is contingent only on the sales price and quantity of product sold.[1]
The term is named so due to the fact most of the time, mining output sold requires further processing by smelters; the mining products purchased directly by smelters are sold to them for a discounted (net) price based on how much further processing is needed.[2] The mining lease specifies the selling price (prices are different in spot and forward markets) and is used to verify the exact amount of product that's produced and sold between royalty payments.
One advantage NSR royalties have over other royalties is that usually, payments are higher in the short term because capital costs and exploration costs cannot be used as deductions (some royalties don't have to be paid until after other costs such as loans / amortization are taken care of). Also, mine life and royalty expiration dates need to be taken into consideration. The royalty can be called a Net Value Royalty when deductions are based solely on the contract.[1]
Alternatively the Gross Smelter Return is a percentage of gross revenue paid by mine owner that isn't subject to any deductions.[1]"



Energy And Precious Metals Royalty Company: TNR Gold Holds 2015 Annual General Meeting.




  
  We are very fortunate to have the strong support for TNR Gold from its shareholders. We continue to realise our business plan and building Royalty Company holding Royalty and Stakes in Precious and Energy Metals. International Lithium development with Ganfeng Lithium is at the front line of our advance now.

TNR Gold main assets include:






  Sale of our assets in Los Azules copper project will provide TNR Gold with capital to advance our other projects. International Lithium is developing its J/V projects with Ganfeng Lithium - one of the top world leaders in Lithium materials production from China.

TNR Gold And Los Azules Copper: McEwen Mining - Back To The Basics.

  


  There is very little coverage on Los Azules copper project despite of being "One of the largest undeveloped copper deposits in the world" - according to McEwen Mining. I am very pleased to find out this publication about McEwen Mining, Argentina and magnitude of Los Azules copper project.
  Please read carefully my legal disclosure. All this material is provided for information only, I was not able to verify any technical information in this article, it should not be relied upon in any investment decisions.
  TNR Gold holds now 0.4% NSR on the whole Los Azules copper deposit, 1% bonus on the sale of Los Azules and McEwen Mining shares. You can find all our financial information in the official reporting on SEDAR.


  "Copper and Lithium become the strategic metals for the ongoing green revolution. Solar and Wind Energy and Electric Cars will drive the new demand for these metals. Solar Energy is growing very fast all over the world now. Energy Storage will be the next step to ignite this growth. This is the new focus of Elon Musk and his Gigafactory. He will introduce the home storage system based on the lithium batteries in the next few months. Copper will have its special place in this mass scale roll out of distributed energy generation systems with Wind and Solar Power. Integral part of this system - Energy Storage is getting popular now with Elon Musk Gigafactory and Warren Buffet with BYD making the headlines. These Trillion Dollar industries: Electric Cars and Energy Storage will drive the demand for Copper and Lithium in the future. Read more."