Friday, 5 April 2019

Life After Oil, Nirvana And Energy Security: Volkswagen Group Secures Lithium Supplies - Ganfeng Will Supply Lithium To The Volkswagen Group For The Next Ten Years.

The world lost Kurt Cobain on this day in 1994. I do hope that he has found his Nirvana. Kurt and Lithium will be always remembered. As we are discussing here, lithium will power us for the next 50 years and after that - robots. Volkswagen has secured its lithium supply for the next 10 years for that transition to the Post Carbon Economy. Our congratulations are going out to the hard-working Ganfeng Lithium Team! Now, in addition to supply agreements with Tesla and BMW, they will supply VW Group.

Finally, the Great Germans are moving from their DIEselgate nightmares into the real EVs action. They are facing billions in stranded assets as the monuments to the ICE Age and very tough questions from their very angry shareholders.

Ganfeng Lithium continues its relentless advance into the position of global lithium power and now has agreements to supply all the top names from the electric cars headlines: Tesla, BMW and VW. This announcement is coming after a further $160M investment in Lithium Americas by Ganfeng and increasing its stake in Mt Marion operations after acquiring the stake from Neometals. Ganfeng is building a diversified supply chain geographically and by the type of raw material used for the production of lithium chemicals. Lithium Americas will produce lithium from lithium brine in Argentia and Mt Marion is producing lithium spodumene concentrate in Australia. Ganfeng has its investments in a number of other lithium developers in Australia.

Lithium will power Tesla Energy rEVolution for years to come, but if you look at the junior mining space you will hardly notice this excitement coming from electric cars and numerous developments in this space this year. We have a total disconnect between billions of dollars invested by OEMs into electric cars and lithium batteries production facilities; and total lack of capital for lithium developers and junior miners. How to cross this digital divide and finance Tesla Energy rEVolution supply lines? We have discussed it at length among our strategic initiatives at TNR Gold.

The ugly truth is that the industry needs $20B in the new capital to be raised by 2020 in order to be able just to increase production of lithium to 1M T LCE per year by 2026 to match the demand as estimated by UBS. The whole industry managed to raise only $2B plus in the new capital in 2018, including the very loud IPOs of Ganfeng and Livent - FMC lithium spin out. Even the best projects are now struggling to get any capital with huge discounts on already the extremely depressed market valuations. Nemaska and Orocobre development sagas are only showing one more time how it is difficult to put online lithium operations both with spodumene and brines.

Here where our GEM Royalty business model is coming into play at TNR Gold. We do not have to dilute our shareholders like there is no tomorrow at the most unfortunate time in the market place. We are holding NSR Royalty on Mariana Lithium JV with the giant from China Ganfeng Lithium as the operator. We do not have to contribute to any CAPEX for this project's development and we do not have to raise capital in order to do so when Mr Market is still trying to figure out the valuations for the lithium developers.

As notable experts are discussing these days, this process can take Mr Market a while: softer prices for lithium carbonate and hydroxide in China are only complicating the situation and adding additional concerns to the sector. After the bloody massacre in the lithium space in 2018, we have to see now when lithium majors will start moving first. Investors who will be lucky to make money on that move will start seeking lithium pre-production developers like Lithium Americas and only after that, some capital gains will start sipping down to the junior miners with FS and PEA stages. All this process will clean up brutally the market from "Thousand and one" lithium companies and, very sadly, not everybody will make it. Stay strong and always Do Your Own Research. Avoid at all cost flying with kamikaze pilots.

Building The Green Energy Metals Royalty Company: TNR Gold Reports On Mariana Lithium Royalty Holding - Ganfeng Lithium JV In Argentina Filed Report With PEA Results.

"The Mariana Lithium PEA study for ILC is the first preliminary economic study that provides a potential value for the total NSR Royalty from the project's life of mine cash flow. TNR does not have to contribute any capital for development of Mariana Lithium and 1.8% NSR Royalty is an important part of TNR's portfolio," stated Kirill Klip, Executive Chairman of TNR. "The essence of our business model is to have industry leaders like Ganfeng Lithium as operators on the projects that will potentially generate royalty cash flows to contribute significant value for our shareholders."

Lithium Will Power Us For The Next 50 Years And Then Robots: GEM Royalty TNR Gold Lithium Presentation January 2019.

"I am very pleased that the TNR Gold team has the full support of the Company's investment loan capital provider who is supporting our business plan and long-term strategic initiatives," commented Kirill Klip, Executive Chairman of TNR. "It is clear that the decision of our investment loan capital provider is a resounding show of confidence in TNR Gold's long-term business strategy, asset portfolio and management team. Now we can concentrate our efforts on building this green energy metals royalty company by maximizing the value of our royalty portfolio of copper and lithium projects that are instrumental in the electric vehicle and green energy sectors, investigating new strategic acquisitions, and development of the Shotgun Gold project in Alaska. The essence of our business model is to have industry leaders like McEwen Mining and Ganfeng Lithium as operators on the projects that will potentially generate royalty cash flows to contribute and develop significant long-term value for our shareholders."


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

Volkswagen Group:

The Volkswagen Group and Ganfeng Lithium Co., Ltd. registered in Jiangxi (China) have signed a memorandum of understanding on long-term lithium supplies for battery cells. Under the agreement, Ganfeng will supply lithium to the Volkswagen Group and its suppliers for the next ten years. Volkswagen is thus already securing a significant share of its lithium requirement for batteries.

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