We have discussed a lot with you here our Green Energy Metals Royalty Co. vision and the world-class assets in TNR Gold Royalty Portfolio. The new presentation by Rob McEwen has properly introduced you to "the sleeping giant" Los Azules Copper with McEwen Mining as the operator. TNR Gold holds NSR Royalty on the entire project. This is the essence of our business model when industry leaders are operators on the world-class projects providing us in the future with the potential cash flow royalty streams. Today our Lithium Story comes back to life.
TNR Gold has founded International Lithium Corp in 2009 and now we hold NSR Royalty on Mariana Lithium project in Argentina where Ganfeng Lithium is the operator. Our strategic priority is to protect this holding. News about Ganfeng and Tesla lithium supply deal confirms our long discussions on this blog about the security of supply for critical metals for Tesla Green Energy rEVolution.
Finally, Tesla is coming to secure the lithium supply from the real source. There is some information that this deal is not new news and part of the Ganfeng IPO PR promotion, but it is not so important here. The logic was quite straightforward: Ganfeng supplies lithium to Panasonic, Panasonic supplies Tesla with lithium cells. Now Tesla will receive lithium supply directly from Ganfeng.
Ganfeng's IPO in Hong Kong will start another chapter for this company, hopefully, Mariana Lithium will have its important place in that book as well. TNR Gold Royalty model secures the exposure to Green Energy Metals like Copper and Lithium without any additional allocation of capital and industry leaders like McEwen Mining and Ganfeng Lithium provide necessary de-risking profiles to our holdings. Our congratulations go to the hard-working teams at Ganfeng Lithium and Tesla today!
InvestorIntel: TNR Gold Fine Tuning Royalty Model For Green Energy Metals.
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Please read legal disclaimer. There is no investment advice on this blog. Always consult a qualified financial adviser before any investment decisions. DYOR.
Tesla Energy rEVolution: TNR Gold CEO On The Beginning Of A Megatrend Led By Electric Cars.
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Introducing GEM Royalty Co. - The Green Energy Metals Royalty Company TNR Gold Corp.
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InvestorIntel:
TNR Gold Fine Tuning Royalty Model For Green Energy Metals.
| MAY 08, 2018 |
Renowned mining investor Frank Holmes has spoken out about his fondness of mining royalty companies.
In terms of value proposition, they outperform mining equities and serve the important role of connecting exploration plays with financiers during lean bear markets, he says.
Kirill Klip, CEO and President of TNR Gold Corp. (TSXV: TNR), fell into this business model when he bought shares in gold mining royalty company Royal Gold for about $5 each, back when gold traded at $300 an ounce (it hasn’t traded in the $300s since 2003). He cashed out of that investment at over $70 a share and has been hooked on the royalty model ever since, where royalty proceeds funnel into new opportunities, he told InvestorIntel.
Klip says his version of a royalty company is slanted towards metals with high exposure to usage in electrical vehicles – lithium, copper, and even gold. His most mature investment to date is a position in International Lithium Corp. (TSXV: ILC), in which TNR holds a 14.1% equity interest after convertible debentures and warrants are exercised and a 1.8% net smelter royalty (NSR) on the Mariana brine project in Argentina. The key to this project is the involvement of joint venture partner Ganfeng Lithium Co., one of China’s largest processors of the material.
But the investment that could return really big bucks is another NSR that TNR holds in the Los Azules copper project in Argentina, currently being developed by former Goldcorp founder Rob McEwen. TNR holds a 0.36% NSR royalty on the project, which could return $35 billion over a 35-year mine life. A looming copper crunch as the market could move into structural deficit by 2020 means that major mining companies are hungry to pounce on attractive projects being developed by juniors. A preliminary economic assessment shows that Los Azules could deliver 415 million pounds (188,241 metric tons) of copper production a year for the first ten years of mine life with cash costs of $1.11 a pound, according to TNR.
“Investors are putting a larger discount on our cash flow because people do not expect that McEwen Mining will put this project into production,” Klip said. “All majors are looking for a good copper project and there is more and more interest.”
Despite higher prices, other externalities have evolved in favor Los Azules. Investors have returned to Argentina thanks to the reformist policies of Mauricio Macri, who was elected president in 2015 following a decade of rule by protectionist policies by Cristina Fernandez and her predecessor and husband, Nestor Kirchner. Macri’s government fared well during key mid-term elections last October, providing investors with greater optimism that he will be elected to a second term next year. The Argentine government recently signed a bilateral agreement with Chile, a key milestone for Los Azules which straddles the border of both countries.
The third major component in TNR’s portfolio is the Shotgun gold project, located close to NovaGold and Barrick Gold’s Donlin project in Alaska. Early resource numbers suggest the project holds 20.7 million tons of ore with an average gold grade of 1.06 grams a ton, with a 0.5 g/t cut-off grade. Barrick and NovaGold’s project obtained a key environmental approval from the U.S. Army Corps of Engineers in April, indicating the government of Donald Trump is more amenable to mining in Alaska. Once again, external factors are moving in TNR Gold’s favor.
Klip’s next step with Shotgun is to find an exploration partner of the same caliber as McEwen. One of TNR’s board members, Greg Johnson, founded NovaGold and was instrumental in the discovery of Donlin. He is entrusted with the task of finding that partner, Klip said. Don’t bet against TNR repeating the success it has had so far in ILC and Los Azules."
Please Note that TNR Gold Qualified Person - as it is defined by NI 43-101, was NOT able to Verify and Confirm Any Provided Information by The Third Parties in the Articles, News Releases or on the Links embedded in this post; you must NOT rely in any sense on any of this information in order to make any Resource or Value Calculation, or attribute any particular Value or Price Target to any Discussed Securities.
Bloomberg:
"China’s top producer of lithium, a metal used in electric-vehicle batteries, said it’s agreed a deal with Tesla Inc. to supply a fifth of its production to the vehicle maker, highlighting the push for supply pacts.
Tesla will designate its battery suppliers to buy lithium-hydroxide products from Ganfeng Lithium Co. and its unit, the Jiangxi-based company said in a filing to the Shenzhen exchange on Friday. The agreement runs from 2018 to 2020 and could be extended by three years, Ganfeng said. Its shares jumped.
Electric-vehicle producers including Elon Musk’s Tesla are pushing to secure supplies of lithium for batteries as investors and mining companies gauge the potential for growth in the industry. Still, the burgeoning market has been roiled in 2018 by price declines, and forecasts from some banks that a wave of new mining projects will outpace demand growth."
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