Since August, Surge Battery Metals, Inc. (OTC: NILIF) stock has appreciated 51%. The good news from an investor's perspective is that its bullish momentum remains in place. In fact, its upside trend grabbed additional traction after Surge entered into an option agreement with Lithium Corporation (OTCQB: LTUM), whereby Surge may earn an 80% interest in Lithium Corporation's San Emidio Lithium-in-Brine property in Washoe County, Nevada.
It's a deal that can keep on giving, ultimately increasing production activity by drilling into increased claim holdings in the prospect area that expands 5,560 acres. The terms of the deal are favorably structured as well. Surge will make staged cash and share payments and incur $1,000,000 in exploration expenditures to earn an undivided 80% working interest in the prospect. While it does entail some dilution, investors don't seem to mind. The stock has kept its bullish bias despite turbulent markets.
Investors appear most attracted to what this deal can bring. And with Lithium Corporation maintaining the property since 2010 and recovering up to 80 mg/l Li from near-surface brine samples, they have good reasons to be optimistic. Foremost, from a valuation perspective, additional assets are being added to an already impressive portfolio. That's always a good thing.
Better still, the additional assets are accretive in targeting a massive market opportunity.
EV battery Metals Market Is Surging
And that could keep its positive momentum in place for the foreseeable future. That's especially so with Surge positioning itself to become a considerable player in the massive EV battery metals sector. And with batteries being the lynchpin to the electric vehicle markets, they are indeed in the right markets at the right time.
In fact, they are staring down an expected $46 trillion opportunity by 2050. And despite its micro-cap share price, the team at Surge has put together an impressive portfolio of assets that puts them on a scale with even the most prominent industry battery metal miners.
Even better, with three projects nearing its dig stage, Surge is not only diversified but could also become its own revenue-generating juggernaut. Thus, while its shares have surged considerably since August, expect project updates to have a considerable and positive effect on prices going forward.
Remember, even proven assets in the ground have value, making the NILIF value proposition in a bull metals market increasingly compelling. Better yet, increases in copper, lithium, and nickel prices could actually send share prices substantially higher before Surge even lifts a shovel. Thus, timing matters when it comes to catching maximum value in this hot sector.
And, as noted, its LOI with Lithium Corp adds to an already impressive portfolio.
Capitalizing On Proven Assets
In fact, Surge looks to be better positioned than ever to maximize its investments. In addition to expanding its interest with LTUM, they have stakes in three mining properties that can turn valuable battery-producing metals into dollars. Better still, its properties offer diversification, enabling Surge to extend its market reach by selling a unique assortment of metal assets. As mentioned, all are seeing an intense increase in client demand.
And more than intense demand, the market dollars in play are extraordinary. For Surge, it can be transformational. Frankly, its market cap fails to scratch the surface of what's in play from a sales perspective. Of course, once metals come out of the ground, Surge's fortunes will change. But for savvy investors, getting ahead of the opportunity through undervalued under-the-radar companies could be the vehicle to help deliver potentially exponential gains. Surge is one to consider.
And while Surge is yet to produce meaningful revenues, its British Columbia operations could change that dynamic, with two locations loaded with copper, nickel, and other resources being put into production.
Its Caledonia location, located within a 31-mile long copper belt and 7 miles away from BHP's Island Copper Mine, is metal-rich, indicating substantial recovery rates for copper and silver across the 4,302-acre allotment.
Its second location in Central British Columbia is near another proven nickel mining project, which adds to the prospects of finding another large pool of assets. There, surveys indicate substantial pockets of hard nickel, cobalt, chromium, and awaruite. Of course, mining the metals is only part of the equation. Selling it is the better part.
In that respect, with each metal an integral ingredient to producing EV batteries, and with demand for EV products surging, expect no shortage of interest from buyers. Keep in mind, Surge isn't all about batteries, necessarily. Its lithium property interest is also a potentially exponential value driver.
In addition to its deal with Lithium Corp, Surge expects to drive revenues through its assets at its Northern Nevada Lithium Project, alongside Lithium America, America's only current lithium producer. There, Surge expects to maximize the element-rich value of the property through a strategic plan that combines mining efficiency with marketing expertise. And like the EV battery metals, lithium is one of the most valuable elements powering the electric battery movement. Demand for it, too, is off the charts.
The most excellent news, and what investors want to hear, is that all of Surge's projects can generate substantial revenues in the near and long term. Better yet, they won't need to find buyers; customers are lining up to buy its mined products.
Huge Demand From EV Sector
That's to be expected, with 18 of the largest 20 manufacturers spending billions on EV design and production. There's more than that, but those 18 alone will offer billions in purchasing power. Even better, unlike the rare earth metals market that sent those asset prices soaring and then crashing, the demand for battery metals and lithium can be a more robust, stable, and long-term contributor to mass-market applications.
The better news for those that mine the metals, like Surge, is that pound for pound, battery metals are in a better market position than rare earth metals could have ever hoped for. Hence, theoretically speaking, Surge is sitting on mountains of cash. And it can get more valuable every day.
Best of all, Surge is funded to complete its 2021 explorations, and if they tap the markets for capital down the road, it will likely be on competitive terms. Hence, its assets in the ground, which appreciate alongside market pricing, do more than bring shareholder value; they could generate partnership interests, provide collateral for mainstream and non-dilutive financing, and drive shareholder value from its pure intrinsic value.
Thus, as supply deals get made ahead of metals being pulled from the ground, expect Surge to ink some of its own. And with the resources in place to capture surging market interest, deals to monetize its output could come sooner rather than later.
In fact, it's fair to assume that part of its recent share price rally is attributed to savvy investors getting ahead of what could be imminent production news. And knowing that valuable metal and element-rich deposits in British Columbia and Nevada are under management, doing so may be a wise consideration.
EV Battery Metal Markets Hot And Getting Hotter
Know this, too. While the EV sector is hot today, expect it to be scalding hot in the coming weeks, months, and years. And investors in NILIF are indeed in the right sector at the right time, with Surge working to tap into an EV sector that saw sales soar over 40% from the previous year. Still, while an impressive jump, continued EV adoption is expected to accelerate for decades to come. It's no secret that the demand for batteries to provide the power goes with it.
Forbes published an article predicting that around 90% of battery demand will come from the EV industry. Still, that's only one market. The global clean-energy initiatives put other potentially massive opportunities in play with these same metals needed to produce many other consumer items.
Further, as technology ramps, expect current market opportunities a drop in the bucket compared to the number of applications that "battery" metals and lithium can power. The best news regarding Surge is that they, too, are in the business for the long haul.
Better still, Surge's approach to mining can be profitable sooner by mitigating risk. How? By utilizing prospecting, geological mapping, and rock and soil sampling to determine which properties provide the quickest and most efficient revenue-generating opportunity. And with sales channels clearly defined, the cost of managing inventory shouldn't be a drag, either.
That's excellent news for Surge's bottom-line growth as copper, nickel, and lithium market demand is expected to increase 15x by 2030. Again, while great news for Surge on the EV battery front, investors need to stay focused on its lithium interests too. The opportunities in play from that element alone are worth billions to already lined up customers.
Here's an additional consideration that also holds tremendous operational value- Surge's projects are ESG mandated. And that's a big deal. In fact, ESG (Environmental, Social and Corporate Governance) mandated companies are projected to grow almost 3x as fast as non-ESG-mandated businesses.
Thus, as decision-makers prioritize the value of environmental sustainability, Surge should continue to hover at the top of contract lists for consideration. In other words, with its ESG distinction, Surge is better positioned than most to expand its operations and take advantage of fast-moving, competitive markets.
Extracting Value for A Better EV Battery
Here's the best news. Despite its impressive month-to-date gains, Surge Battery Metals is making deals to enhance its competitive position and capitalize from assets experiencing exponential increases in demand. Thus, the increases over the past 60 days could be the starting point for substantially bigger ones to come.
And with proven reserves in the ground to capitalize on enormous market demand combined with expanding lithium interests, its roughly $18 million market cap could be in for a well-deserved raise. Factoring in analysis suggesting that the battery metals market may present a generational investment opportunity, that raise could be substantially more than many expect.
In fact, once Surge delivers its first haul of metals, anything near current prices will likely become extinct. The best news...that could happen soon.
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