Monday, 16 September 2019

Oil Is Still Big, Actually, It's Very Big. But Thanks To rEVolution Energy Security Is Not Only About Oil Anymore.

Attack on oil facilities of Aramco in Saudi Arabia reminded us about the importance of oil for the global economy this weekend. All markets are totally hooked up on these events today with oil spiking as high as 20% in futures trading last night and now trading up 10%. Gold is back above $1,500 and any discussions about further potential tensions in the region are followed by the scenarios with oil hitting $100 and gold going to $2,000 very fast.

POTUS is "locked and loaded". It looks like now he will get his rates cuts from FED for the "plan A" with some kind of deal with China coming next. I do hope that "plan B" - "regional war" will be avoided. After all these events are traded by all sides involved, the very important questions will come to the boardrooms all around the globe. Energy supply is still very highly concentrated in literally most flammable regions of the world. What can be done about it to really address the energy security in the long term? The solution will be the tide of billions of dollars coming from funds who will be divesting from oil and increasing allocations to the Energy rEVolution.

Thanks to Energy rEVolution, we all do not have to be hostages of this bloody side of oil business any more. The technology is here. Collapsing costs of solar and wind provide the solution for real energy security with distributed power generation. Cheap lithium batteries change everything. Elon Musk and Tesla made electric cars possible. Now we are entering into the mass market stage of The Switch - when literally millions of people will be buying electric cars.

As we have discussed, the lithium market and juniors involved are so much hated now that it deserves a second look for all contrarians at heart. As always, do your own research and you will have to pick up the winners. You can find my posts on the links which can help you.

Lithium technology will power electric cars for years to come, but who can cross the desert now, when juniors are starving for capital and even majors are struggling with direction during the short term "glut of lithium" in China? Who will deliver 1M tonnes of lithium LCE per year starting in 2025? Who can afford to raise the needed capital and make this jump in the expansion of production facilities from 320,000 tonnes of LCE in 2018? I think that it will be safe to say that top lithium names will be the answer. Companies like a giant from China Ganfeng Lithium already have supply agreements with Tesla, BMW and Volkswagen. They have the staying power not only to survive lower lithium prices but further consolidate the market, as we have been discussing before.

Ganfeng Lithium continues its commitment to Argentina and has celebrated the closing of its $160M additional investment into Lithium Americas JV in September. TNR Gold holds NSR Royalty on Mariana Lithium project which is being developed by JV with Ganfeng Lithium as the operator and does not have to contribute any capital for the development. Ganfeng is expecting pre-feasibility and feasibility studies to be completed this year. Below you can find more information for your research.

Building The Green Energy Metals Royalty Company: TNR Gold Investor Presentation April 2019.

"Kirill Klip, Executive Chairman of the Company commented, "We are very pleased to see that Ganfeng Lithium is advancing the Mariana Lithium project in Argentina towards further pre-feasibility studies. The Mariana Lithium preliminary economic assessment ("PEA"), as announced in our news release of January 28, 2019, was the first PEA on the project that provided a potential value for the total NSR Royalty from Mariana's life of mine cashflow. TNR Gold does not have to contribute any capital for development of Mariana Lithium and our NSR Royalty does not depend on the size of ILC's share in Mariana Lithium. The 1.8% Mariana NSR Royalty is an important part of TNR Gold's portfolio. The essence of our business model is to have industry leaders like Ganfeng Lithium as operators on the projects that will potentially generate royalty cashflows to contribute significant value for our shareholders."

Building The Green Energy Metals Royalty Company: TNR Gold Reports On Mariana Lithium Royalty Holding - Giant From China Ganfeng Lithium Advances The Project In Argentina.

(From the published in March 2019, Ganfeng Lithium's 2018 Audited Annual Report.)

As always, all readers must read carefully all disclaimers, do their own due diligence and study audited reports of all companies involved in Mariana Lithium project in their entirety. Now we can discuss what we know from the published Ganfeng Lithium's 2018 Audited Annual Report in March 2019, that Ganfeng is expecting pre-feasibility and feasibility study of Mariana Lithium project to be completed in 2019. And ILC has announced in its Audited 2018 FS which was published on April 30, 2019, that Ganfeng decided to propose a budget for Mariana Lithium Project of $10 million dollars for the first 6 months of 2019. Earlier this year Ganfeng has invested an additional $160 million dollars in the Lithium Americas in order to advance their Cauchari-Olaroz lithium brine projects in Argentina. The development of Mariana Lithium Project in Salta can benefit from all R&D and learning curve of Ganfeng's development with Lithium Americas in Argentina and, hopefully, avoid the costly mistakes of other lithium brine operators.

(From the published on April 30, 2019, ILC's Audited 2018 FS.)


Please read legal disclaimer. There is no investment advice on this blog. Always consult a qualified financial adviser before any investment decisions. DYOR.

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