The Canada-listed junior lithium stocks we’ve dug up are set to benefit from a global pivot to renewable energy as the cost of production continues to decline
SmallCapPower | December 18, 2018: In January, a report by the International Renewable Energy Agency (IRENA) revealed that the cost of producing renewable energy is becoming more efficient. Since 2010, the cost of onshore wind power has fallen 23%, meanwhile, solar photovoltaic (PV) electricity has fallen a staggering 73% over the same period. According to IRENA, fossil fuel generated power can cost between $0.05-0.17 per kilowatt hour (KwH), compared to onshore wind power and solar, currently priced at $0.06/KwH, and $0.10/KwH, respectively. IRENA predicts further cost reduction in the future, eventually settling at $0.03/KwH by 2020 for both renewable sources. The increasing affordability, combined with the growing importance of environmental sustainability, should increase demand and bring positive catalysts for lithium stocks in the future. Lithium is a key metal involved in the storage of renewable energy through the lithium-ion battery. As such, lithium could see an increase in demand, as more countries move towards renewable energy and electric car manufacturing. Although this thesis has not yet held true, as the spot price of lithium has fallen over 20% YTD. However, this could provide an appealing entry point for investors looking to take advantage of this weakness. To us, the Canada-listed junior lithium stocks have strong potential for a rebound in 2019.
All metrics reflect closing prices as at December 14, 2018.
NEO Lithium Corp. (TSXV:NLC) – $0.78
Neo Lithium is an exploration-stage company, focused on advancing its Tres Quebradas 3Q Lithium Brine Project in Argentina. The 3Q property is 100% owned and comprised of 35,000 hectares in Latin America’s Lithium Triangle, one of the highest grades and lowest impurity lithium projects in the world. On November 26, 2018, the Company announced it had contracted GHD, an engineering firm with an expertise in lithium brines, to perform a pre-feasibility study in Q1/2019. The Company is also working on completing an environmental permit with the Energy Information Administration (EIA) to move towards mine construction in Q2/2019.
- Market Cap: $91.7M
- 1-Month Total Return: -22.8%
- YTD Total Return: -66.2%
- Average Daily Volume (3 Month Average): 0.13M
Advantage Lithium Corp. (TSXV:AAL) – $0.54
Advantage Lithium is a Canada-based company with a total of five assets in Argentina and the United States. The Company’s flagship asset, the Cauchari project, is 75% owned and part of a joint venture between the Company and Orocobre Limited (TSX:ORL). The project comprises 28,500 hectares and located 10 kilometers south of Orocobre’s LCE production plant in the Jujuy Province, Argentina. On December 13, 2018, the Company announced it had contracted GHD, Chile S.A. to complete a Feasibility Study at the Cauchari Project by June 2019.
- Market Cap: $85.2M
- 1-Month Total Return: -14.3%
- YTD Total Return: -58.1%
- Average Daily Volume (3 Month Average): 0.12M
Power Metals Corp. (TSXV:PWM) – $0.20
Power Metals is a hard rock lithium explorer focused on its flagship Case Lake property, comprised of 38 mining claims over 7,136 hectares and located 100 km north of Kirkland Lake, Ontario. Although limited to 83 current drilled holes, work-to-date indicates that spodumene pegmatites may occur throughout the property in dykes hosted by domes. On November 28, 2018, the Company announced assay results from the newly-discovered Jesse’s Pegmatite located at the Paterson Lake property. Results include 12 grab samples with up to 3.26% Li2O mineralization and zones containing Tantalum (Ta) mineralization. Following the results, the Company has permitted the area for a stripping and drilling campaign, which gives Power Metals a second highly prospective drilling site to pair with the Case Lake property.
- Market Cap: $20.3M
- 1-Month Total Return: -4.8%
- YTD Total Return: -72.2%
- Average Daily Volume (3 Month Average): 0.21M
Ubika Research/SmallCapPower has received compensation from Power Metals to provide analyst research coverage. For full disclosure please visit here >>
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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