Processing plant at lithium mine in Western Australia. Mechanical processing used to refine lithium spodumene concentrate.

North America is one of the top-producing mining regions in the world, and right now the focus on metals used for technology and battery production is a key focus for miners. One of the miners taking advantage of this key area is lithium chemical company Piedmont Lithium. Piedmont’s focus is their eponymous project, the Piedmont Lithium Project, in North Carolina. Located in one of the premier regions in the world for lithium exploration, it is 100% by the company and features unique and favourable geology, and a location with easy access to infrastructure, power, R&D centres for lithium and battery storage, and major high-tech population centres. 

In-Demand

This project is aimed at making Piedmont a strategic domestic supplier of battery-grade lithium hydroxide and other chemicals to the growing electric vehicle and battery storage markets in the United States. Their ambitions have recently been matched by the market when their recent public offering worth US$122.5 million was closed last week. 

The proceeds will be used to continue the development of Piedmont’s fully-integrated spodumene-to-hydroxide project in North Carolina. The infusion of capital will allow the company to move forward with its plans at a faster and more effective pace going forward. This will also help them advance their 25,000-metre drill program, for which Piedmont expects construction to be completed in 2022. For now, a mineral resource update is expected in April, and the company plans to complete infill drilling by August. 

The company will also be keeping its eye on Sayona Mining, an emerging lithium miner in which Piedmont Lithium plans to invest strategically. The proceeds from the public offering will be used to fund those strategic investments, and allow the company to expand its portfolio with Sayona’s projects in Quebec, and Western Australia. 

Elon Musk’s Deal Book

Tesla is everywhere right now, and not just in the media. Elon Musk’s electric vehicle maker agreed to a deal with Piedmont Lithium that will have them doing business together for up to 10 years, with the option to extend the contract for another five years. Piedmont has agreed to supply Tesla with high-purity lithium ore mineral, to supply the vehicle-maker with about a third of its planned 160,000-tonnes-per-year spodumene concentrate from its deposits in North Carolina. 

The future is bright not just for this deal because Piedmont delivers on its promises and timelines, it will pave the way for more partnerships like this in their target markets of the electric vehicle and battery storage industries. 

The Stock

Piedmont Lithium (PLL) has attracted positive coverage and the stock’s 950% run in the past 7 months seems to be just the beginning. The stock’s momentum has held steady, and this is an optimistic signal to the street that investors have a lot to gain in being a part of Piedmont’s story. The deals they are making directly with the leading electric vehicle maker are proof that they can operate in the industries they are targeting. 

With a market cap of nearly US$900 million, the company could break through the billion-dollar-valuation mark sooner than later, and this has the stock at the top of mining watchlists. For now, it will be a wait-and-see position for the company as they build out their flagship project and continue to invest in and acquire new projects from other companies. 

 

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above. 
Lithium and potash are considered “green metals”.

Not all alkali metals are created equally. All of the alkali metals share similar properties: they are highly reactive metals under standard conditions and are thus never found in their elemental form in nature. The two alkali metals that are of particular value to investors are lithium, due to its high electrochemical potential; and potassium, because of its role in plant nutrition.  In the commodity world, lithium is better known as lithium carbonate while potassium is better known as potash.

Everywhere you look these days, food is news. From increasing demand from a burgeoning Chinese middle class that has sent commodity prices soaring to a Tunisian fruit seller sparking a revolution it’s hard to go a day without hearing that the world food situation has entered dangerous territory. The food crisis has sent prices of potash, which replaces soil nutrients, soaring. A few years ago one would be hard pressed to find any junior potash exploration companies. Today, a number of projects are being advancing in Canada and abroad.

Lithium, one of the more unconventional commodity plays, is also one of the most challenging for investors to grasp. As Virginia Heffernan noted, “Lithium is one of the more difficult commodities to assess because economic viability depends so much on the deposit type and the ability to covert resources into a product that can be successfully marketed to end users.” This hasn’t held back junior exploration companies as a number have been quick to react to what they believe will be a battery of future demand.

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