Canadian lithium to outshine gold?

How long does it take to build a business into a billion dollar asset?

Typically, it takes a whole generation -- or longer. (For instance, it took the world’s largest retail company, Walmart, nearly 30 years to reach $1 billion in sales.)

But in the mining business, stratospheric success can happen in just a matter of weeks. That’s assuming an exploration company is smart enough, as well as fortunate enough, to drill in the right places.

In which case, there still exists the opportunity to unearth multi-billion mineral assets that are ripe for the picking.  And for the right kinds of minerals, such as lithium and diamonds, even Canada still offers untapped opportunities.

92 Resources Corp. is among the many intrepid exploration juniors that hope to become virtually overnight rags-to-riches stories. It’s pinning its hopes on a revitalized lithium project, which is situated only 40 kilometres from Yellowknife, the capital city of the Northwest Territories (NWT).

Whereas most of Canada has already been picked clean for new gold discoveries, the hunt for rich lithium deposits has only become a popular quest within the last several years.

And the rewards can be very lucrative indeed. For instance, one of 92 Resources’ peers in the exploration sector, Nemaska Lithium Inc., has already hit the geological jackpot. It went from the discovery stage just a few short years ago to an independently-assessed valuation (NPV) of almost $1.9 billion for its Whabouchi lithium project in James Bay, Quebec.

 

Why Lithium?

In fact, lithium is fast becoming more lustrous to investors than gold. So much so that it’s even been hailed “the new gasoline” by Wall Street’s most powerful and influential investment bank, Goldman Sachs.

This is all because of the electrification of the automobile industry, which is reliant on “green” lithium-ion batteries. Tesla Motors is leading the way in the U.S. with the building of its $5 billion “gigafactory” in Nevada, where it will manufacture lithium-ion batteries in partnership with Panasonic, its Japanese battery supplier.

Production is expected to start later this year. And by 2020, enough lithium battery-packs will be manufactured each year to power up to 500,000 electric vehicles.

Most notably, Tesla wants to source as much of its lithium supplies as possible from domestic or Canadian mines. And presently, that’s a tall order because only one North American lithium mine exists, which is also in Nevada.

All of this promises to be a boon to successful lithium explorers here in North America,   especially since the U.S. currently has to import over 80% of its lithium supplies. Even the U.S. government is onside with Tesla’s bold mandate because it has declared lithium to be a strategic metal.

So the race is on to find the biggest and best deposits on this continent.

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About the Author

Marc Davis is managing editor of www.BNWnews.ca