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Surge Battery Metals, Inc. Stock Surges 53% As EV Battery Metals Sector Comes Into Investor Focus (OTCQB: NILIF) (TSXV: NILI)
Surge Battery Metals, Inc. (OTC: NILIF) stock is surging, adding more than 53% since its September intraday low of $0.17. The better news is that Surge's strength is gaining momentum, with shares increasing by nearly 4% to start the week. Why the sudden interest? Investors are taking notice of NILIF's position to capitalize on the massive potential from the EV battery markets. In fact, estimates expect that market to become a more than $46 trillion opportunity within the next three decades. And with Surge Battery Metals, Inc. mining the metal materials needed to power the sector, it's understandable why its shares are in rally mode.
Better still, demand for its products is reaching an all-time high, with 18 of the largest 20 automakers spending billions on EV design and production. Moreover, similar to the value of rare earth metals a decade ago, mining these battery metals is proving to be a more valuable proposition than finding gold. Actually, pound for pound, they may already be, especially considering that finding and mining these metals can be far more accessible than mining the precious bullion. And for companies in the sector, they could position to enjoy a potentially exponential increase in demand, sending their valuations substantially higher in the process. Surge Metals is one to watch.
In fact, as automakers and battery producers rush to ink supply deals with miners, Surge is indeed in the right market at the right time. And more than being in the right sector, Surge also has the resources in place to capitalize on the enormous potential, tapping into valuable metal deposits in British Columbia and Nevada. If all goes according to plan, Surge intends to become a significant supplier of battery metals to meet the spiking global demand for clean energy. The better news is that they are positioned to do just that.
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Surge Battery Metals Valuation Spikes
And that could be what's driving its stock price higher. Since the start of the month, shares went from an intraday low of $0.17 to their current trading price of $0.27. That move isn't by accident, either.
Investors are starting to recognize that Surge is well-positioned to capture an impressive share of the low carbon economy. And by meeting the market's demands with an efficient strategy to mine skyrocketing demand for copper, nickel, and lithium, that value could come to Surge sooner rather than later. Remember, without these metals, the EV sector drives nowhere.
Analysts agree, noting in research that while the electric vehicle sector may enjoy an expected 15X increase in demand, the battery metals market could see 500X that level. Keep in mind, too, although the EV sector is ramping, it's still in its relative infancy. That means that additional applications for Surge's mined products could see substantial growth as billions get spent on R&D programs to make EV and low carbon output the standard over the next few decades.
By the way, the recent spike in Surge Battery Metals valuation is a continuation of already extraordinary YTD gains. Earlier this year, investors sent share prices higher by 375%, accompanied by a 1408% increase to its market cap from December to April 2021. And with the cash on hand to fund its 2021 exploration targets, those gains could be a prelude for better times ahead.
From an EV industry growth perspective, that could be the case.
EV Sector In Hyper-Growth Mode
In 2020, EV sales soared over 40% from the previous year. And that comes in part from the general public's views on climate change and the need for clean electric power. Moreover, despite Forbes predicting that around 90% of battery demand will come from within the EV industry, significant other opportunities are also in play. All can be accretive to Surge.
And with Surge's explorations designed to mitigate risk by utilizing prospecting, geological mapping, and rock and soil sampling to determine which properties provide the quickest and most efficient revenue-generating opportunity, returns can be maximized. Further, its metals won't find any shortage of market interest.
Copper, nickel, and lithium demand is forecasted to increase 15x by 2030, matching the growth in the EV market. But, beyond the EV sector, battery production, especially lithium-ion, is soaring as well. And that spike in demand also provides pricing power to sellers, putting Surge in an ideal position to capitalize on its fully funded ESG mandated projects that support a cleaner future. That ESG designation, by the way, is a big deal.
ESG (Environmental, Social and Corporate Governance) mandated companies are projected to grow almost 3x as fast as non-ESG-mandated businesses. That's especially true as policies shift to prioritize environmental sustainability for the future. Put simply, companies whose technology helps reduce oil demand and present carbon-neutral opportunities are earning regulatory priority. Hence, with Surge having this ESG distinction, they are better positioned than most to expand its operations quickly as additional market opportunities emerge.
Extracting Metals And Turning Into Dollars
The best news of all for Surge investors is that it's a company in motion. In fact, Surge Battery Metals is preparing to recover these valuable metal assets from three regional mining projects. Better still, each property has specialized infrastructure and resources that can extend the company's market reach. All can become revenue-generating juggernauts.
In British Columbia, two locations with copper, nickel, and other resources are in play. Its Caledonia location, located within a 31-mile long copper belt and 7 miles away from BHP's Island Copper Mine, indicates substantial recovery rates for copper and silver across the 4,302-acre allotment. Its second location in Central British Columbia is in close proximity to another significant nickel project, which often increases the prospects of finding another large pool of assets. Also, surveys indicate that other materials, including hard nickel, cobalt, chromium, and awaruite, are at this site. All contribute considerably to the production of EV batteries as well. Still, there are more assets to generate revenues.
Surge also presides over the Northern Nevada Lithium Project alongside Lithium America, currently America's only lithium producer. There, Surge combines strategic planning to capture value with element-rich properties to add to its value proposition. Indeed, the combination of assets, even those in the ground, could send Surge valuations higher as the market price for these metals increases. That's happening in the spot markets now.
Catching A Rising Mining Star
The bottom line is this- catching value in Surge Battery Metals ahead of production news could be a wise consideration. And that comes with comfort knowing they target a market that is exploding in demand and has proven reserves in the ground to capitalize on the enormous market potential. Even better, those assets can appreciate before they are even brought above the earth.
The better news is that while the sector presents Surge with tremendous opportunities today, the future is expected to provide even greater opportunity from a more diversified class of battery applications. Thus, as noted, with many markets in play, Surge is in the right place, with the right assets, at the right time.
Moreover, with three element-mining locations producing the materials needed for EV battery production, its roughly $18 million market cap is less than appropriate. But, that could be great news for investors at these levels as the company continues to gain exposure. Still, keep in mind that with Surge being a fully-funded, ESG compliant company, the gap between current share price and intrinsic value may start to close. Thus, while the shares may present a compelling long-term investment proposition, current levels offer a near-term opportunity for substantial appreciation as well.
Best of all, with trillions of dollars up for grabs over the next decade in the battery metals space, Surge Battery Metals, Inc. could be part of a generational investment opportunity. And that's never the wrong place to consider parking investment capital.
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