Graphite – The Key Ingredient in the Energy Revolution

Tesla is offering increasing innovation as the company seeks to boost the ways to power their cars
Tesla is offering increasing innovation as the company seeks to boost the ways to power their cars

LONDON – TRANSPORTATION – The electric vehicle revolution has led to a run-up in prices for a variety of metals and other commodities, as global automakers try to keep up with Tesla. The mass adoption of EVs is not here just yet, but the cascade of new EV models set to be unveiled in the next few years will accelerate the energy transition. In focus, today includes: Teck Resources Limited (NYSE: TECK), Endeavour Silver Corp. (NYSE: EXK), Magna International Inc. (NYSE: MGA), Pretium Resources Inc. (NYSE: PVG), Intel Corporation (NASDAQ: INTC)

The ramp up in EV production has caused price spikes for lithium and cobalt, for example. But there is one material that is actually even more crucial to the development of batteries needed in EVs: graphite. Graphite can produce graphene, an extremely versatile material that is 200 times stronger than steel, but also highly flexible and incredibly lightweight. These features make it prized in a variety of applications, but graphene can also allow batteries to recharge faster, last longer and hold more energy – essential ingredients in extending the range of EVs and lowering their cost to allow for mass adoption.

Because graphene will play a pivotal role in the EV revolution, graphite producers are positioning themselves for a massive payday as demand skyrockets. One such graphite producer is Global Li-Ion Graphite Corp. (LION; GBBGF) a small Vancouver-based company that has graphite assets in Nevada and Madagascar.

LION is an unknown to investors but that could soon change as it starts to make big moves to take its operations to the next level. On October 25, LION announced an MOU to acquire BEGO Technologies, a company that has a unique and highly promising way to render graphene from graphite, offering LION some vertical integration.

On October 30, LION released news about another major step it is taking. LION announced that it has signed an option to purchase a 100 percent interest in the Neuron Graphite Project in Northern Manitoba from Callinex Mines Inc.

The reason this is important is that Callinex completed a 12-hole drilling program in its Northern Manitoba acreage, which showed a Carbon Content (or Graphite) of up to 78.3 percent. Follow up analysis showed a 4.1-meter section grading 60.38 percent Carbon Graphite included in a 56.0-meter intersection grading 5.91 percent Carbon Content.

In order to take over Callinex, LION will pay $200,000 and one million shares on signing.

The acquisition gives LION (LION; GBBGF) a third critical source of pending graphite production. Combined with the pending acquisition of BEGO Technologies, LION has added some exciting graphite acreage while also gaining access to the technology needed to transform that into graphene – the key element in the batteries needed for electric vehicles.

Company President Jason Walsh commented “we are extremely excited to work with Callinex and their Chairman Mike Muzylowski on the advanced Neuron High-grade Graphite project. We feel this gives LION the perfect balance of potential Graphite production in three jurisdictions enabling us to achieve our goal of being a major supplier of premium Graphite to the rapidly growing energy storage industry.”

By Joao Piexe

Teck Resources (NYSE: TECK): Zinc hasn’t been Teck’s best friend of late, but that looks set to change in the medium term, as supply continues to dwindle and as we hear the news that the world’s top producer of the metal-Glencore-isn’t planning to bring shuttered mines back online. Supply will remain tight.

Keep in mind this, though: Teck’s Q1 earnings and revenue fell short of expectations because of weaknesses at its zinc unit, sending its shares down about 6% in late April. In particular, there’s been a 23% drop in production at its Red Dog mine due to lower grades of zinc.

Endeavor Silver (NYSE: EXK) operates three silver-gold mines in Mexico, but it’s also got three attractive development projects. Production has dropped and all-in sustaining costs have risen, leading to a negative cash flow. But the company has significantly reduced its debt, so its future is anything but bleak.

By 2018, with development in the pipeline, this stock might be prohibitively expensive again because there is plenty of near-term growth potential here. It’s also got further upside with zinc and should get a boost in this coming bull market. Catalysts include positive reserve estimates for its fifth mine, the Terronera silver/gold project in Mexico’s Jalisco state.

Magna International (NYSE: MGA) is based in Aurora, Ontario. The global automotive supplier is gutsy and innovative–and definitely tuned to the obvious future–clean transportation. A great catalyst is its development of a combo electric/hydrogen vehicle–a fuel cell range-extended EV (FCREEV). It’s not going to produce them (for now, at least) but plans to use the model to show off its engineering and design prowess and produce elements of the electric drivetrain and contract manufacturing.

The company’s auto parts are distributed to heavyweights such as General Motors, Ford, Tesla, BMW, Toyota, Volkswagen, and Chrysler. These huge deals provide a safe and steady profit stream for the company. It’s insightful, forward-thinking and smart value/low cost for shareholders.

Pretium Resources (NYSE: PVG): This impressive Canadian company is engaged in the acquisition, exploration, and development of precious metal resource properties in the Americas. Additionally, construction and engineering activities at its top location continue to advance, and commercial production is targeted for this year.

The company’s modest market cap and stock price make it an appealing buy for investors. Pretium has an impressive portfolio and if you can catch the stock while the price is right, there could be a huge opportunity for upside.

Intel Corporation (NASDAQ: INTC) is a leader in multiple fields of technology. The forward-thinking industry giant is the backbone of many laptops and PCs running the Windows operating system. The company has been so successful in its deal-making and advertising that it is impossible to escape its influence.

Not only is Intel running our laptops, it may soon be taking over the self-driving car industry. In August 2017, Intel announced that it will be testing self-driving technology as it tries to compete with other chipmakers in the industry

Savvy investors are definitely following Intel closely, as many see it as a leader in the race to create an entirely new internet.

By. Charles Kennedy

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