The key to long-term North American security has become inextricably tied to critical minerals such as lithium, graphite, nickel, cobalt, copper and rare earths elements.
Without them, there will be no energy transition.
And China dominates the entire playing field.
That dire situation has prompted a host of new legislation in both the United States and Canada—all designed to position North America to shift market share from China.
That situation means that the junior explorers and producers sitting on critical mineral deposits are now forming the backbone of North America’s national security rethink.
Every policy going forward is designed to bolster their operations and non-Chinese investment in those operations.
In November 2022, the Canadian government ordered three Chinese firms to divest from their Canadian mining investments. Then, late last year, the government implemented the Investment Canada Act (ICA) and the Critical Minerals Strategy to reduce Chinese economic influence and reboot investment in critical miners as a measure of national security.
That move left Canadian miner Power Metals Corp (TSXV:PWM,OTC: PWRMF) in control of two key assets: a potentially high-quality lithium mine and what could end up being the only functioning cesium mine in the world that China doesn’t own.
Canada wants new critical minerals, and it wants their development fast-tracked.
In February, Canadian Energy Minister Jonathan Wilkinson told Reuters that Ottawa was focusing on six critical minerals for electric vehicles and wind turbines—lithium, graphite, nickel, cobalt, copper and rare earths elements, and that it planned to boost energy security by significantly reducing the time it takes to develop them.
In fact, Canada is hoping to slash development time by nearly a decade.
And an essential element of the new critical minerals security strategy is to combat China, which has been using its soft power to scoop up strategic critical mineral assets in North America.
The first step was forcing Chinese companies to divest their ownership in Canadian critical minerals.
Power Metals spent the second half of 2023 developing an understanding of the large property and mineral discoveries made at their strategic Case Lake play with airborne geophysical surveys, field-based prospecting and mapping programs.
They’ve also made several additional land acquisitions in 2023 and 2024, with a continued focus in lithium, cesium and tantalum, taking on Winsome Resources as a 19.59% partner.
Power Metals has drilled over 15,000 meters to date and its most recent drilling campaign just launched in late February this year, eyeing Canada’s most critically strategic minerals against the backdrop of the most attractive new investment scenario the sector has ever seen in North America.
Case Lake: China’s Loss, North America’s Gain
Power Metals’ flagship exploration project has been described by the company’s Chairman as a “geologist’s dream” and the equivalent of “prime real estate on Park Avenue”.
Almost every mineral discovery in Canada has been undertaken in the remotest of areas. But unlike most mining venues, Case Lake is accessible year-round, with all infrastructure in place—right down to elusive cell phone signals.
Case Lake is one of the most inexpensive properties to drill in Canada, according to Power Metals.
While the access makes it significantly easier and cheaper, that is only half of the story.
The cesium, lithium, and tantalum intersections here are in pegmatite that is exposed on the surface and running so shallow that it is less than 50 meters deep in various areas.
And the high-grade cesium it holds in its folds is said to be similar to Australia’s famous Sinclair Mine.
That’s why Australian money stepped in when the Canadian government forced the Chinese out.
Australia's first commercial cesium mine, Sinclair, extracted its last cesium in 2019. And it’s one of only three in the world. The other two are the Tanco mine in Manitoba, Canada, and the Bikita mine in Zimbabwe. Tanco shut down after the mine collapsed in 2015, and Bitika was depleted in 2018.
That renders Case Lake a highly strategic property on a national security level.
It also makes Case Lake highly attractive to Western buyers.
Australia’s Winsome Resources (ASX:WR1) which jumped at the chance in November 2022, when they moved to scoop up Chinese mining giant Sinomine Resource Group’s 5.7% stake in Power Metals. Since then, they’ve raised that stake twice—first to 10.7% and more recently to 19.59%.
What the Chinese Were Eyeing
Now everyone knows what the Chinese knew from the beginning: Power Metals’ (TSXV:PWM,OTC: PWRMF) Case Lake property is of significant strategic importance.
The Case Lake Property, in northeastern Ontario, close to the border with Quebec, consists of 585 cell claims in Steele, Case, Scapa, Pliny, Abbotsford and Challies townships, Larder Lake Mining Division.
Covering some 95 square kilometers with 14 granitic domes, the Case Lake pegmatite swarm consists of six spodumene dikes known as the North, Main, South, East and Northeast dikes on the Henry Dome, and the West Joe dike on a new dome. Together, these dikes form mineralization trend that extends for some 10 kilometers.
Between 2017 and 2022, Power Metals drilled a total of 15,700 meters of core at Case Lake.
They were primarily targeting lithium, with new lithium and tantalum discoveries. Its world-class, high-grade lithium discovery of over 4% at shallow, open depth was already making waves and earning Chinese attention prior to 2022.
This is some of the highest-grade cesium found in decades, with grades as high as 24% over good intervals.
– 24.07% Cesium over 1 meter
– 20.36% Cesium over 1 meter
– 22.22% Cesium over 2 meters
– 7.65% Cesium over 7.09 meters
Those were the results that prompted the Chinese to pounce on Power Metals.
In September last year, Power Metals further boosted is findings with the discovery of new pegmatite dikes in close proximity to Dome Nine, confirming the presence of a 10-15-meter wide spodumene bearing pegmatite strike with Lithium content as high as 1.12%, along with a new pegmatitic tonalite identified just southwest of the West Joe Zone.
Cesium is central to the United States’ goal of winning the 5G race, it plays a key role in aircraft guidance systems, oil and gas drilling, and global positioning satellites.
And despite its importance, all the known cesium deposits around the world have either been depleted, or the mines have been rendered inoperable.
All of this could leave Power Metals and its Case Lake project as one of the most unique and exciting natural resource plays in the world today.
But what the Chinese were eyeing before they were evicted is now an even better story as the 2024 drilling campaign gets underway.
The 2024 Drilling Campaign That Could Boost Canada’s Critical Minerals Power
Power Metals launched its new drill campaign on February 29, deploying a diamond drill rig at its 100% owned Case Lake Property.
The campaign will drill a total of 4,000 meters to delineate and extend Lithium-Cesium-Tantalum (LCT) mineralization along the geological strike and down-dip of Case Lake’s known mineralization.
“We are very excited to be back at Case Lake and look forward to a successful launch of our winter 2024 exploration program. We believe in the exploration upside at Case Lake, one of the few projects in the world that contain Cesium mineralization in Pollucite and look forward to drill test the high priority exploration targets our team have been able to identify,” Power Metals Chairman Johnathan More, said in a press release.
“The current drilling has identified coarse spodumene mineralization between 2cm – 10cm grain size, these zones displayed between 6% – 15 % spodumene mineralization that occur in a series of stacked pegmatites at Main Zone,” the company said.
Last week, drilling moved to West Joe at Case Lake to test mineralization extensions to the high-grade cesium mineralization found during the 2017-2022 drilling.
Results are expected in late April from the first round of assays from the new drilling campaign.
And it’s also acquiring new ground elsewhere, building on its success so far at Case Lake.
On March 19, Power Metals (TSXV:PWM,OTC: PWRMF) staked the Pelletier Project, with 337 mineral claims over a total surface area of 7,000 hectares in northeast Ontario, approximately 50 km south of Hearst.
This is another project characterized by lithium – cesium – tantalum, and previous work on this play completed by geologists from Ontario Geological Survey in 2003 reported evolved granitic pegmatites with anomalous rubidium, cesium, and the potassium to rubidium ratio, indicating the potential for LCT pegmatites.
The new project is also just 30 kilometers south of the Lowther pegmatite field, where Brunswick Exploration conducted exploration drilling at the Decoy and Moskito pegmatites.
China knew the significance of Case Lake, and Australia was quick to step in when the Chinese were evicted.
Australia’s Winsome Resources, which now owns a nearly 20% stake in Power Metals, is a lithium juggernaut, and it’s hedging its bets on Power Metals. Not only did Winsome scoop up the Chinese stake in this Canadian critical metals miner, but it also grabbed the off-take rights to future production.
Global eyes are on this critical project—and not just because of the lithium, tantalum and cesium prospectivity …
The China-Australia scramble for these assets have as much to do with the easy accessibility and treasure trove so close to the surface. That means cheap drilling for lithium and one of the world’s rarest and most critical elements—cesium, which is not mined anywhere else in the world right now.
With a key Australian lithium player now behind Power Metals, and with Winsome now occupying a seat on the Power Metals board, an additional layer of critical minerals expertise is further shoring up the discovery and exploration prowess at one of North America’s most important new discoveries. Late April is poised to bring us the results of the current drilling campaign, and many eyes will be on Power Metals between now and then.
Other companies to keep an eye on:
Compass Minerals International (NYSE: CMP), headquartered in Overland Park, Kansas, remains a leading provider of essential minerals, solidifying its position with consistent performance and strategic growth initiatives. Since the previously mentioned reference, the company has made significant advancements in its operations, product offerings, and sustainability efforts.
One notable development is Compass Minerals' continued focus on innovation in the lithium extraction sector. Recognizing the burgeoning demand for lithium in electric vehicle batteries, the company has accelerated its efforts to extract lithium from its existing operations in Utah. By leveraging its existing infrastructure and expertise in brine extraction, Compass Minerals aims to become a major player in the sustainable lithium market, catering to the needs of the rapidly expanding clean energy industry.
Furthermore, Compass Minerals has expanded its product portfolio by introducing new and innovative solutions. Notably, the company has developed a range of specialty salts for various industrial applications, including pharmaceuticals, food additives, and water treatment. These value-added products have not only strengthened the company's revenue streams but also enhanced its competitive advantage in specialized markets.
Freeport-McMoRan Inc. (NYSE:FCX), a leading mining company based in Phoenix, Arizona, has a global presence with significant reserves of copper, gold, and molybdenum. The company's operations span several countries, including Indonesia, the United States, and South America. With the growing demand for copper in renewable energy and electric vehicle technologies, Freeport-McMoRan is well-positioned to capitalize on the transition towards greener economies.
In addition to its core mining business, Freeport-McMoRan is actively involved in community engagement and environmental stewardship. The company has implemented various initiatives aimed at reducing its environmental footprint and promoting sustainable mining practices. These efforts include water management, biodiversity conservation, and emission reduction strategies. Freeport-McMoRan's commitment to responsible mining ensures compliance with environmental standards while contributing to the broader goal of sustainable development in the regions it operates.
One of Freeport-McMoRan's recent developments is the construction of the Lone Star copper mine in Arizona. The Lone Star mine represents a significant investment and is expected to be a major copper producer for the company. This project underscores Freeport-McMoRan's commitment to meeting the growing demand for copper in various industries, including renewable energy and electric vehicles.
Rio Tinto (NYSE:RIO), a global mining and metals powerhouse, continues to be a formidable player in the industry. Headquartered in the United Kingdom and Australia, the company has a far-reaching global presence spanning approximately 35 countries. Its diverse portfolio encompasses a wide range of commodities, including aluminum, copper, diamonds, coal, iron ore, and uranium. Rio Tinto's impressive asset base is complemented by solid market fundamentals, particularly in the copper and iron ore markets, making it an attractive investment opportunity.
In recent years, Rio Tinto has made significant strides in integrating innovative technologies and sustainable practices into its operations. The company recognizes the urgent need to reduce its carbon footprint and mitigate environmental impacts. To that end, Rio Tinto has invested heavily in renewable energy sources, such as solar and wind power, and has also implemented various measures to rehabilitate mining sites after extraction. This proactive approach to corporate responsibility and sustainability has not only set a benchmark for the mining industry but has also resonated with investors seeking companies aligned with ethical and environmentally conscious practices.
In addition to its ongoing commitment to sustainability, Rio Tinto has also been actively involved in mergers and acquisitions to strengthen its market position. In 2023, the company completed the divestment of its coal assets in Australia, marking a strategic shift towards a more sustainable portfolio. Furthermore, Rio Tinto has expressed interest in exploring opportunities in the battery metals sector, recognizing the growing demand for these materials in the transition to clean energy technologies. These strategic moves underscore Rio Tinto's agility in adapting to shifting market dynamics and its commitment to long-term growth and profitability.
FMC Corporation (NYSE: FMC), headquartered in Philadelphia, Pennsylvania, is a global agricultural sciences company that delivers innovative technology to farmers worldwide. While FMC is not a traditional mining company, its significant stake in lithium, a critical component in rechargeable batteries and other high-tech applications, sets it apart. Lithium is a strategic mineral in the transition to a clean energy future, and FMC's involvement in this sector positions the company for growth in the years to come.
FMC's commitment to innovation and sustainability is commendable. The company's agricultural products, such as crop protection solutions and plant nutrition technologies, contribute to increased crop yield and quality, addressing global food security challenges. In recent years, FMC has benefited from robust demand for its crop protection products, driven by higher commodity prices and strong agricultural market fundamentals.
Looking ahead, FMC is well-positioned to capitalize on several key trends. The growing global population and rising middle class are expected to drive increased demand for food, which will necessitate higher crop yields. Additionally, the transition to sustainable agriculture practices, such as precision farming and the adoption of biological crop protection solutions, presents significant opportunities for FMC. The company's commitment to innovation and sustainability, coupled with its strong product portfolio and geographic reach, make it well-positioned to navigate the challenges and seize the opportunities ahead.
Sociedad Química y Minera de Chile (NYSE:SQM) is a Chilean chemical and mining company that has been in operation for over 100 years. It is one of the world's largest producers of fertilizers, iodine, and lithium. SQM has operations in Chile, Argentina, Brazil, Peru, and the United States.
SQM has been facing several challenges, including falling commodity prices, environmental regulations, and political uncertainty in Chile. However, the company has also made several strategic investments, which have helped to position it for future growth.
One of the most significant recent developments for SQM is the acquisition of the lithium assets of Albemarle Corporation. This acquisition makes SQM the world's largest producer of lithium, a key ingredient in electric vehicle batteries. SQM is also investing in a number of other projects, including the development of a new potash mine in Canada and the expansion of its lithium operations in Chile.
Magna International (TSX: MG) offers a compelling and intricate approach for accessing the burgeoning commodities market, avoiding speculative investments in emerging high-growth stocks that captivate younger generations. Over a decade ago, Magna International displayed remarkable foresight by initiating substantial investments in the battery market when it was still in its nascent stage. Notably, at that time, the advent of electric vehicles as we know them had only recently entered the automotive landscape, with Tesla introducing its groundbreaking vehicle just two years prior.
Magna's strategic investment in batteries has proven remarkably successful. Since its bold and innovative decision, the company has witnessed an impressive surge in its valuation, amounting to tens of billions of dollars. This growth solidifies Magna International's position as a preeminent player in the intensely competitive battery industry.
Westport Fuel Systems Incorporated (TSX: WRPT) is not strictly a resource play, but it is an organization of significance to monitor as alternative fuel sources and novel energy forms gain prominence. This is especially relevant in light of the global transition away from traditional gasoline and diesel-powered vehicles. Although fundamentally a manufacturing company, Westport offers a distinct avenue for gaining exposure to the alternative fuels sector. As a critical producer of components necessary for constructing natural gas and other alternative fuel-powered automobiles, Westport warrants attention within this domain.
Westport Fuel has been consistently making significant strides in the market over the past year, culminating in tangible results. Since May 2020, the company has experienced a remarkable 322% increase in its stock price. With the potential for additional strategic alliances, such as the recent agreement with Amazon to supply natural gas-powered trucks, the stock exhibits promising growth prospects in the coming years.
In the realm of energy, a paradigm shift towards clean and sustainable sources is underway. A notable development in this regard is the increasing involvement of traditional fossil fuel producers in the pursuit of clean energy solutions. One such company is Suncor Energy (NYSE: SU, TSX: SU), a renowned oil producer that has emerged as a frontrunner in the clean energy space.
While many major oil companies have retreated from oil sands production, Suncor has embraced the challenges and opportunities associated with this sector. By focusing on technological advancements and sustainable practices, Suncor has secured a promising long-term outlook. Moreover, the company's current undervaluation relative to its peers presents an attractive investment opportunity.
Beyond its oil operations, Suncor has established a global leadership position in renewable energy innovations. A notable example is the company's recent investment of $300 million in a wind farm located in Alberta. Furthermore, as Canada transitions away from oil dependence, Suncor is well-positioned to capitalize on the country's abundant lithium reserves. The proximity of lithium deposits to Suncor's existing oil sands operations offers significant logistical and economic advantages.
China's rapid economic expansion has led to a significant increase in energy demand. CNOOC Limited (TSX: CNU), a leading oil and gas producer in China, is poised to benefit from this burgeoning demand. As the country's largest offshore crude oil and natural gas producer, CNOOC Limited has a strong foothold in the energy sector. Its strategic position allows it to tap into abundant hydrocarbon resources in China's offshore waters, giving it a competitive advantage. Additionally, the company's extensive infrastructure and expertise in exploration, development, and production enable it to efficiently extract and deliver energy resources to meet the growing needs of the Chinese economy.
Despite its strong position in the energy sector, CNOOC Limited has faced controversy due to geopolitical tensions between China and other countries. Concerns about the company's ties to the Chinese government and its potential role in geopolitical conflicts have raised eyebrows among investors. However, it's important to note that these controversies are largely external factors that do not directly impact the company's operations or financial performance. CNOOC Limited's robust business fundamentals and its strategic focus on meeting China's energy needs make it a compelling investment opportunity.
Boralex Inc. (TSX:BLX) is a leading renewable energy company in Canada, playing a pivotal role in the country's domestic renewable energy boom. The company's main focus is on wind, hydroelectric, thermal, and solar energy sources, providing clean and sustainable power to homes across Canada and other parts of the world, including the United States, France, and the United Kingdom. Boralex's commitment to renewable energy is evident in its various wind, solar, and hydroelectric projects. In Canada, the company operates several wind farms in Quebec, Ontario, and Alberta, generating clean electricity that reduces reliance on fossil fuels.
Boralex's renewable energy push extends beyond Canada, with a significant presence in other countries. In the United States, the company operates wind and solar farms in several states, contributing to the country's transition to cleaner energy sources. Boralex also has a strong presence in France, where it operates wind farms and hydroelectric plants, providing renewable energy to local communities. Additionally, the company has expanded into the United Kingdom, where it operates wind farms and is actively pursuing new renewable energy projects.
By. Michael Kern
IMPORTANT NOTICE AND DISCLAIMER FORWARD LOOKING STATEMENTS.
This publication contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this publication include that the Canadian mining sector will continue to protect its supply of critical minerals without involvement of China; that cesium and other metals will remain as critical minerals will continue as a national security issue for Western countries; that access to rare metals, and in particular cesium, will be essential to gaining technical superiority; that cesium and other rare earth metals will continue to be a critical for use in various technologies, including the 5G cellular and wireless technologies; that cesium will continue to be a critical mineral and considered as matter of national security for Western countries; that Power Metals Corp. (the “Company”) and its all-Western investors will be in control of the only cesium mine that China does not own; that the Company’s properties will be able to commercially produce cesium, lithium, tantalum and other critical minerals; that the Company will be able to finance and operationally establish mines on its properties to viably and commercially extract the critical minerals; that Australian shareholders and investors in the Company will provide development and other expertise to assist the Company; that Winsome Resources will continue to own a significant stake in the Company; that the Company’s property will one day have one of the only potential mines producing cesium; that the Company can finance ongoing operations and development; that the Company can achieve its business plans and objectives as anticipated. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include the development of alternative technologies that do not require the use of metals and resources currently considered as critical; that other resources are utilized in future in favour of rare earth metals such as cesium; that alternative technologies utilize other resources or that cesium, lithium, and tantalum are not utilized; that other companies discover resources of cesium and other battery metals that are more favorable or more easily developed into commercial production that the Company’s property; that the Company’s properties are unable to produce commercial amounts of cesium, lithium, tantalum or other critical metals; that the Company will be unable to finance or operationally establish mines on its properties for commercial extraction of any critical minerals; that the Company’s Australian investors will not be able to provide development and other expertise to meaningful assist the Company; that Winsome Resources may for various reasons divest its stake in the Company in future; that the Company’s properties may fail to develop mines producing cesium; that the Company may be unable to finance its ongoing operations and development; that the business of the Company may be unsuccessful for various reasons. The forward-looking information contained herein is given as of the date hereof and we assume no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.
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