Home Stock Market Commentary Red Hot EV Battery Market Is Desperate for Lithium

Red Hot EV Battery Market Is Desperate for Lithium

Hidden within the ancient lakebeds of Esmeralda County, Nevada is the answer to America’s growing lithium shortage.

And the company sitting on top of it, ACME Lithium (CSE: ACME, OTCQB: ACLHF) is poised to provide early investors a once-in-a-lifetime opportunity.

  • A historic shift to electric vehicles is triggering a new boom in lithium prices. Battery-grade lithium carbonate, has skyrocketed in price 89%[1] so far in 2021 to more than $13,000 per ton, outperforming the S&P 500 by almost 8 to 1.[2] 
  • And with a recent report by the International Energy Agency (IEA) projecting the number of electric vehicles to grow 1,200%[3] by the end of the decade, junior resource mining companies are soaring as well.                                       
  • Now, ACME Lithium (CSE: ACME, OTCQB: ACLHF) is positioned tosurge into the lead, as it pursues claims covering more than 4,000 acres in Nevada’s prolificFish Lake and Clayton Valleys.

Standing on a lakebed in Esmeralda County, Nevada, you can see signs of the region’s lengthy history with lithium.

They’ve been extracting and processing lithium here since the sixties, but a recent drive towards clean energy has brought this region back into focus for technology industry leaders and investors alike.

Below the surface is one of the richest reserves of lithium in the world – a key component of the batteries which will power North America’s energy future.

But the United States has been slow to establish its reserve potential, making the finding of new lithium sources nothing short of a national security crisis.

If we look at last year alone, the top producers of lithium in 2020 were[1]:

  • Australia with 40,000 metric tonnes
  • Chile with 18,000 metric tonnes
  • China with 14,000 metric tonnes
  • Argentina with 6,200 metric tonnes
  • Brazil with 1,900 metric tonnes

With only a single lithium mine at Silver Peak in Nevada, the United States doesn’t even make the list.

But it’s not for lack of resource. In fact, the country is blessed with some of the largest lithium reserves on the planet. The USGS estimated in 2020 that the US had lithium reserves of around 750,000 metric tons, putting it behind only China, Argentina, Australia and Chile[2].

It simply hadn’t been a priority, as the United States has long relied on its ample fossil fuel reserves. Until now.

The Unstoppable Rise of Lithium

Of course, when it comes to electric vehicles it’s no longer huge news that they are driving unrelenting demand for lithium.

But, we often lose sight of just how big the trend is now and how massive it is poised to become.

Ultimately, analysts at UBS investment banks forecast that by 2030, EVs will need 2,700 GWh worth of lithium-ion batteries a year.[3]

For perspective, that’s equivalent to 225 billion iPhone 11 batteries – and 13X more battery power than we use today.[4]

In fact, the International Energy Agency forecasts that there will be a combined 125 million EV cars and trucks on the road over the next decade.[5]

And their batteries will require hundreds of tons of lithium.

At an estimated 3 pounds (1.4kg) of lithium per kWh of power, the smallest EV, that runs on 20kWh batteries will use about 60 pounds lithium.

Big cars with 100kWh batteries will use around 300 pounds of lithium.[6]

This is a significant issues for all EV makers.

The world is going to need at least 20.8 billion pounds, or 10.4 million tons, of lithium over the next decade.

In addition, lithium will be powering more than just electric vehicles. Lithium-ion batteries will be powering the smart cities of the future[7].

This year, the Moss Landing Power Plant tower over Monterey Bay, which used to be America’s largest gas fired power plant is starting a new life as the world’s largest battery. It is home to a 300-megawatt lithium-ion battery which will provide power for residents in California.

More are to come. Across America mega-batteries are firing up, providing a sustainable answer to the challenge of powering America.

If North America is to come close to achieving these targets, U.S. lithium production will need to be scaled up dramatically.

That means they’ll be looking at places like ACME Lithium’s (CSE: ACME, OTCQB: ACLHF) Clayton Valley and Fish Lake projects to make up the shortfall.

That explains why this stock has shot out of nowhere in the last year, to become one of the hottest microcaps in a smouldering lithium market.

Now, It’s ACME Lithium’s (CSE: ACME, OTCQB: ACLHF)

Turn To Draw Investor’s Attention.

Like all emerging markets, investing in this space can be complicated. Successful investors will be those who spot stocks which are on the lower slopes of a rise rather than one which is already at the top.

In other words, you want to invest in a company which is on the brink of a breakthrough, not one which has already maxed out its potential. That’s what makes ACME Lithiumso appealing.

Right now, they’re in a sweet spot, sitting in a historic region with rich reserves and proven exploration credentials, all at a time of booming demand. And while some of the big performers of the past year appear to have peaked, all the evidence suggests ACME is at the start of its ride.

This alone puts it in a strong position to capitalize from the lithium boom.

Recent times have seen ACME Lithium (CSE: ACME, OTCQB: ACLHF) stock more than double, surging from under CAD$0.40 just last May to a high of CAD$1.34 in September, giving early investors a chance to take profits. Now the stock is maintaining at around $1.15 and primed for another enormous leg up for investors who see industry’s exponential rise in demand.

Playing One Of The World’s Dominant Trends

Here’s the whole story on ACME Lithium (CSE: ACME, OTCQB: ACLHF).

It comes in two parts.

You see, ACME currently holds more than 200 claims on two separate projects, all within the lithium-rich flats of Esmeralda County, Nevada.

Their Clayton Valley project, which boasts a 100% interest in 122 claims totalling 2,440 acres, is raw and bursting with potential because it abuts a famous lithium mine.

And their Fish Lake Valley project looks to hold historic concentrations. ACME currently holds a 100% interest in 81 lode mining claims totalling 1,620 acres there.

Now, the company is undertaking an extensive exploration campaign to uncover targets at both.

A World Class Neighbor in Clayton Valley

Mining is steeped into the history of Clayton Valley. To date, this region has already proved to be a vital source of lithium, and signs suggest mining operations have only scratched the surface.

Named after Joshua E Clayton, a settler and mining engineer, the lithium rich brines pumped up from the ground here currently provide a third of America’s lithium requirements.

The metal is thought to originate from the Tertiary volcanics which abound in the area. While the region has been producing lithium from rich brine pools since the 60s, it’s only recently garnering heavy attention. And for very good reason.

Albemarle’s flagship mine, Silver Peak, is the ONLY commercially producing lithium mine in North America.

Currently this mine produces 3,500 metric tonnes of lithium per year, but has the capacity to produce 6,000. It’s one of two world class mines operated by Albemarle with the other being in the Salar de Atacama, Chile.

Remarkably, ACME Lithium’s project borders Albermarle sitting right next door.

That positions ACME Lithium (CSE: ACME, OTCQB: ACLHF) at the epicentre of lithium exploration and production in the US, next to a source which has been a productive supply of lithium for six decades.

Plus, ACME recently completed phase one of a two phase geological survey targeting lithium brine, which entailed a gravity survey including a total of 120 gravity stations acquired over the claim area on a grid of 250 meters.

And, phase two of the Hybrid-Source Audio-Magnetotellurics (HSMAT) survey has just commenced, which should give ACME a clear picture of which drill locations to prioritize for testing lithium concentrations within brines.

Results are expected soon[8].

Fish Lake Valley, Nevada’s Lithium Windfall

Nearby you’ll find another area rich in potential – Fish Lake Valley. This 25-mile-long endothermic valley has long been viewed as a rich potential for lithium. Even back in the 70s analysis of the water in Fish Lake revealed high levels of the white metal.

Until recently it has been unexploited, simply due to lack of demand. But that is changing rapidly.

Just this month, ACME Lithium (CSE: ACME, OTCQB: ACLHF) commenced field work at its claim group in Fish Lake Valley.

Follow up sub sampling, as well as mapping, is intended to better understand the geological model and focus on traverses along a major drainage area where higher lithium values occurred.

Further analysis will assist with drill hole targeting and access routes for potential drill sites[9].

One Of The Best Mining Jurisdictions On The Planet

The best part of the story is that ACME can move forward with exploration and drilling plans, without seasonal shifts or bureaucracy slowing their progress.  

You see, Nevada is not the only source of lithium in the States… it’s just the most promising region.

The Nevada government has always been mining friendly, going back to the gold rush era, when mines began popping up like wildfire during the mid-1800s.

It was the Nevada’s abundant mineral wealth which established it as a state in the first place. And it remains key to the State’s economy in the modern age. Governments have pledged to the promotion of mineral exploration and development, and see lithium as another key player in its future.

Furthermore, the state benefits from excellent road, rail and air infrastructure, which makes it easily accessible. And the warm climate means mining can continue all year round. 

ACME Lithium (CSE: ACME, OTCQB: ACLHF) Price Triggers

Founded in 2019, ACME has undergone two tranches of financing with the second closing on an oversubscribed $3.6 million with no debt.

As they look to the future, the company is well capitalized to prove out the resources on its two Nevada projects, as well as potentially acquire accretive projects in the lithium and EV space.

That means the immediate future holds significant growth potential, based on a few factors.

  1. Drilling results: Based on the significant lithium resources that neighbor  Albemarle is pulling out of the ground, ACME is excited to prove up its initial findings once drilling commences. And the resulting news coverage could continue to garner attention from investors.
  2. New economic assessment:  Based on positive results, an economic assessment is a key milestone in the year ahead which could trigger a share price surge.
  3. Special partnerships: The company is working on several other special partnerships which, when announced, could add fuel to the stock price.  

Because ACME is still in early stages, it is has a relatively small market cap. That means investors can control their risk and take advantage of considerable potential upside.

For a relatively modest investment, there are real opportunities to be had.

[1]   NOTE:  Footnotes for internal compliance review only.  https://www.mining-journal.com/energy-minerals-news/news/1406529/lithium-carbonate-prices-have-nearly-doubled-in-2021-benchmark

[2]   As of May 10, the S&P 500 index shows a year to date return of 11.51% compared to 88.4% for lithium carbonate.  88.4% divided by 11.51% = 7.68 times.

[3]   https://percentagecalculator.net/

[1] Top Producers of Lithium: • Global lithium mine production top countries 2020 | Statista

[2] Demand for Lithium is Pressuring the US to Remain Competitive: Demand for Lithium Production Is Pressuring the US to Stay Competitive (guidehouseinsights.com)

[3] https://www.forbes.com/sites/danrunkevicius/2020/12/07/as-tesla-booms-lithium-is-running-out/?sh=5acf1f951a44

[4] https://www.forbes.com/sites/danrunkevicius/2020/12/07/as-tesla-booms-lithium-is-running-out/?sh=5acf1f951a44

[5] https://www.cnbc.com/2018/05/30/electric-vehicles-will-grow-from-3-million-to-125-million-by-2030-iea.html

[6] http://www.meridian-int-res.com/Projects/How_Much_Lithium_Per_Battery.pdf

[7] Powering Smart Cities with Lithium Ion Batteries: Powering Up Smart Cities with Lithium-ion Batteries (reuters.com)

[8] ACME Lithium Completes Phase 1 Geological Survey: ACME Lithium Completes Phase 1 Geophysical Survey Targeting Lithium Brine (investingnews.com)

[9] ACME commences Field Work at Fish Lake Valley: ACME Lithium Commences Field Work at Fish Lake Valley Nevada (investingnews.com)