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Surge Battery Metals Delivered A Transformational 2021; Strong Metals Markets And Multiple Projects Could Make 2022 Its Best Year Ever (OTC: NILIF) (TSXV: NILI)
Surge Battery Metals, Inc. (OTC: NILIF) offers a value proposition that is getting too big to ignore. In fact, many investors aren't, which is a reason why this micro-cap battery metals exploration company has been outperforming the broader market averages. Since the start of the new year, NILIF stock has been higher by about 38%*. And that's after some profit-taking hit the stock on Friday. Before that, shares have touched levels more than 115% higher on an intraday basis. The reason for the spike is- Surge Battery Metals is in the right markets at the right time. (* share price at market close on 12/31/21 of $0.10 – to $0.138 intraday press-time on 1/28/22)
And that should keep NILIF in rally mode for the foreseeable future, especially with demand for its products reaching record-setting levels. Not only that, while its YTD intraday moves are impressive, they are coming at a time when markets have been at their weakest. Thus, when markets return to normal, which they will, NILIF stock could and likely will do even better.
Of course, that would be excellent news for NILIF and its investors. And remember, as shaky investors start to put money back to work, expect them to do so with more discipline. That's usually the case after bear markets ease. Thus, being early to invest in companies in the right sector at the right time could add a multiple to expected gains. Moreover, the investment proposition becomes even more attractive by finding standout performers that are also a part of a flourishing industry and are already well-positioned to accelerate development through a risk-mitigated business plan. Surge Battery Metals checks those boxes. Better still, its more than impressive YTD gains could be the precursor of bigger ones to come.
Exploring Metals Value In Two Countries
That's likely. In fact, Surge's work in 2021 sets them up for a breakout in 2022. That's because NILIF successfully built upon an already impressive list of operating assets, completed a capital raise that put them in one of the best cash positions in its history, and de-risked opportunities by committing to projects in some of the world's most mining-friendly jurisdictions.
Furthermore, NILIF completed several accretive deals, including an option agreement with Lithium Corporation (OTCQB: LTUM) that has the potential to turn this micro-cap battery metals exploration company into a company that can compete on a scale with senior miners.
In addition, while NILIF laid the groundwork for a record-breaking year in 2021, new deals show they are staying aggressive in 2022 by continuing to seek and execute agreements intended to generate substantial shareholder value sooner than later. Earlier this month, Surge announced it had staked a 1,640-acre property in the Teels Marsh Playa, Mineral County, Nevada. The staking is a big deal and loaded with revenue-generating opportunities by being located in an active region for lithium exploration and production, about 84 km northeast of Albemarle's Silver Peak brine mining operation.
Notably, past performance is a good indicator of future success in the mining sector. And having neighbors that have unearthed riches is always a good thing. Since that's the case with several of NILIF's properties, that's potentially huge news for NILIF. Their investors, too.
Still, there's plenty more to like. Those wanting exposure to the massive and still growing EV battery metals sector should also be optimistic about revenue-generating potential from NILIF's deal made with Lithium Corp. For all intents and purposes, that project alone justifies the entire and current Surge market cap, which could be a reason investors have been bidding higher shares.
It makes sense considering that the agreement gives significant claim interest in the 5,560-acre prospect area. Better still, it's an excellent opportunity to drive value with excellent terms that keep Surge's balance sheet healthy. Instead of a mass cash outlay, the deal structure allows Surge to make staged cash and share payments and incur a defined $1,000,000 in exploration expenditures to earn an undivided 80% working interest in the San Emidio Lithium-in-Brine property. This allows Surge to retain much of its $4.2 million in excess working capital reported at the end of last quarter.
That's not all. As Surge expands its operations in at least two countries and is boosted by ample working capital, it is better positioned than ever to turn 2021 ambition into dollars. Better yet, that diversification allows them to make those dollars in multiple markets.
Massive EV Sector Needs NILIF Metals
Wide-open potential comes from the booming EV industry, which delivers an ecosystem of opportunities growing at unprecedented rates. And the more excellent news is that while the industry is booming now, it's expected to grow into a close to a trillion-dollar market opportunity in the next decade. But, a big sector means nothing to a company that can't meet its demands. That's NOT the case with Surge Battery Metals.
NILIF is already positioned to benefit from historic EV sector client interest levels. More importantly, they have the infrastructure to grow in stride with the industry as technology makes EV and green energy solutions accessible to a broader consumer base. If all goes according to plan, Surge Battery Metals could become a significant supplier to the EV and green metals markets over the next few years. In an approaching trillion-dollar market that means the rewards of being an early investor can be lofty.
Those rewards, by the way, don't have to be a result of being the market leader. There's an enormous revenue-generating possibility from being one of several to bring metals and elements above ground. Thus, NILIF's asset-rich property portfolio can do very well to transform this micro-cap exploration company into one that can meet even the loftiest of production expectations.
Moreover, it's good to know that Surge is working within some of the world's most proven reserves and mining-friendly jurisdictions. Therefore, given historical precedence, indicated reserves, and mitigated risk pointing to successful projects already in play, Surge can do two things faster than expected. Make money and graduate out of the micro-cap class.
Proven Assets To Drive Significant Revenues In 2022
Both are likely to happen faster than many expect. And given that Surge is in a better position than ever to capitalize upon its investments in multiple markets, surpassing even the $1 mark isn't too lofty of a goal. That's because alongside expanding its interest with LTUM, Surge also has investments in three mining locations that are expected to be rich in battery-producing metals. Also, Surge's properties add diversification to its portfolio, allowing it to expand its market reach by selling a diverse range of metal assets. Remember, demand across the sector is at record-high levels, which puts massive near and long-term revenue-generating opportunities in NILIF's crosshairs.
That near-term sales potential indeed makes NILIF a compelling investment consideration. Obviously, its recent surge in its share price shows that investors are taking notice and taking advantage of what many refer to as undervalued prices. Of course, while some investors are jumping at the opportunity, they still haven't taken NILIF shares from the undervalued territory. Thus, both a near and long-term investment proposition is still in play.
And while the near-term is bright, so is the long-term value proposition. In fact, a strong case for holding a position for the long term was enhanced following updates about its operations in British Columbia, which take place in two locations rich in copper, nickel, and other valuable metals.
Located within a 31-mile long copper belt and 7 miles away from BHP's Island Copper Mine, its Caledonia location has already indicated a high recovery rate for copper and silver across the 4,302-acre allotment. The second area, located in Central British Columbia, is also close to a known nickel mining project, increasing the likelihood of uncovering yet another big pool of assets. Surveys indicate hard nickel, cobalt, chromium, and awaruite concentrations, and Surge is at the cusp of turning these metals into revenues.
Better still, doing so should be easy, especially with sales meeting massive client demand. Moreover, that demand is here to stay, with all of the company's mined metals being an integral ingredient to producing EV batteries. Hence, despite its size, Surge can benefit from being in the right markets at the right time. In fact, buyers of its output have become so eager to secure raw materials to support EV and green metal technologies that many are placing orders before a dig even starts. This gives Surge sales visibility and pricing power, two factors that make the investment proposition even more potent.
However, we've only discussed its deals and operations in British Columbia, Nevada, and with Lithium Corp. There's even more to like.
The company also expects to generate significant revenues through its assets at its Northern Nevada Lithium Project, which it is developing alongside Lithium America, America's only current lithium producer. With this project, Surge expects to maximize the element-rich property's value through a strategic plan that combines mining efficiency with marketing expertise. Most importantly, lithium is one of the most valuable elements driving the electric battery revolution, with demand currently at record highs.
Surging Demand For EV Metals
Remember, too, as record-level demand for these battery-producing metals continues to increase, Surge's in-progress developments will position them perfectly to capitalize off of the growing market. Notably, unlike the turbulent asset prices of the rare earth metals market, the demand for battery metals and lithium can be a more stable and robust contributor to mass-market applications.
Of course, that's excellent news for those that mine the metals, like Surge, as unearthing a steady supply could result in substantial returns. Best of all, not only has Surge confirmed that they are fully funded to complete its 2022 explorations, they have plenty of reserves to work with, as well. Thus, with Surge enjoying the operational and financial strength allowing them to secure potentially lucrative supply deals ahead of metals being pulled from the ground, its valuation today appreciably undervalues the basic sum of its parts. And that's after its recent runup.
If the start of 2022 is any indication, the gap between Surge's intrinsic assets and market cap can close as early as this quarter.
Prepared To Deliver To Massive Demand
And, keep in mind while the EV sector is hot today, it's still a market far from maturity. That means Surge stays relevant as a metals supplier for the coming days, weeks, months, and years. Further, as technology continues to influence change, current market opportunities are likely a drop in the revenue-generating bucket compared to the number of applications that Surge's "battery," green metals, and lithium can power.
Another thing- don't lump Surge in with high-risk miners. Surge's approach to exploration and mining is different, mitigating risk by utilizing prospecting, geological mapping, and rock and soil sampling to determine which properties provide the most efficient revenue-generating opportunity. And because Surge has established sales channels, the cost of managing inventory shouldn't be a drag, either.
There's even more excellent news. Surge's bottom-line growth should be enhanced by a copper, nickel, and lithium market expected to increase 15x by 2030. Another consideration that holds tremendous operational value is that Surge's projects are ESG mandated. That's a big deal, as 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 near the top of contract lists for consideration. In fact, with its ESG distinction, Surge is better positioned than most to expand its operations and take advantage of fast-moving, competitive markets. In many respects, the designation will even allow Surge to better meet specific demands ahead of more senior mining companies. Hence, micro-cap miner, big time company.
Seizing its Opportunities For A 2022 Breakout
Best of all, while 2021 was transformational to NILIF, they show no sign of slowing down its intent to deliver a breakout year in 2022. And in addition to making deals, investors should consider the value of Surge having ample cash on hand and reserves in the ground that could help transform this exploration company into a revenue-generating juggernaut. Moreover, since Surge can target relentless demand from metals and lithium markets, the valuation today, despite its recent spike, still appreciably undervalues its core assets and near-term sales opportunities.
But that's a gap likely to get filled soon. In fact, it already is. And with several ongoing explorations, its best balance sheet ever, and accretive projects in the most mining-friendly jurisdictions, the trend higher should do more than continue; it should accelerate. Thus, while recent performance from its stock price is impressive, it's likely the leading indicator of what's in store in the coming quarters. Hence, if NILIF stock gets taken lower by weakening markets, consider taking advantage.
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