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Surge Battery Metals Stock Spikes As Battery Metals Providers Sell Into Record-Setting Demand And ATH Prices (OTC: NILIF) (TSXV: NILI)
Despite pockets of intraday strength, markets remain soundly in bear market territory. In fact, many of the companies making up the NASDAQ 100 are lower by more than 25% over the past two quarters. While that's bad enough, small and micro-cap stocks are getting hit even harder, with some in that class lower by a multiple of that staggering decline. However, the keyword there is "some." Not all stocks are lower, and Surge Battery Metals, Inc. (OTC: NILIF) is an example of what being in the right sector at the right time can mean for investors. Its share price has been higher by more than 34% since the start of February. Not only that, momentum to push shares higher is building.
Why? Because savvy investors don't stop investing when markets get weak. Instead, they take advantage of opportunities that others are missing. And with the EV battery metals markets scoring record-setting purchasing contracts, accompanied by some ATH prices, they may see that Surge Battery Metals is more than ideally positioned for near and long-term growth. It also represents an investment proposition getting too big to ignore.
Keep in mind NILIF's recent surge in price doesn't change that dynamic. Instead, more attention is being paid to the fact that Surge Battery Metals proves it can decouple from weaker market averages, even touching a two-month intraday high more than 47% higher from current levels in late January.
The better news is that with demand for its products increasing and prices for certain of its metals at an all-time-high, re-claiming the $0.22 level may come faster than many expect. Of course, being in the right market at the right time helps the cause tremendously.
Video Link: https://www.youtube.com/embed/kLUMPhvd0pg
Metal Exploration Projects In Two Countries
Surge is. Not only that, NILIF's work in 2021 sets them up for a breakout in 2022. That's an intended result of NILIF successfully adding to and enhancing an already impressive list of operating assets, completing a capital raise that put them in one of the best cash positions in its history, and a de-risking of opportunities by committing to projects in some of the world's most mining-friendly jurisdictions. In addition to that, they made several deals that could accelerate its growth trajectory.
One was entering 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. Better still, its value lay in providing immediate investment exposure to the massive and still growing EV battery metals sector, which, for all intents and purposes, has the revenue-generating firepower to alone justify the entire and current Surge market cap. That's no exaggeration.
The agreement gives significant claim interest in the 5,560-acre prospect area. Also, excellent terms provide Surge Battery the opportunity to maximize its interests and keep its 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. But that's only one deal.
Another deal, executed last month, led Surge to announce it had staked a 1,640-acre property in the Teels Marsh Playa, Mineral County, Nevada. The staking is a potentially transformative agreement and comes loaded with revenue-generating opportunities noting that it's located in an active region for lithium exploration and production, about 84 km northeast of Albemarle's Silver Peak brine mining operation. It's a location where past performance is a good indicator of future value.
That's not all. Surge is further expanding its operations in at least two countries with enough cash on hand to expedite an already aggressive exploration schedule. Better yet, the company has taken prudent steps to diversify its interests and de-risk its projects by operating in the most mining-friendly jurisdictions in the world.
Drilling Into An Expected Trillion Dollar Opportunity
That's more than smart; it's timely. Moreover, its target market is getting bigger by the day, with potential revenue-generating opportunities from the booming EV industry 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, targeting a massive EV and battery metals sector means nothing to a company that can't meet its demands. That's not the case with Surge Battery Metals.
They are already positioned to benefit from historic EV sector client interest levels. More importantly, they have built an infrastructure allowing them 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 intends to become a significant supplier to the EV and green metals markets over the next few years. While that may expose a substantial prize then, reaching milestones along the way has inherent value.
Investors appear to be clued into that potential and, more importantly, recognize a valuation disconnect that could close quickly on company updates. There's likely plenty in store for the company to talk about, too.
Mineral And Metal Rich Assets
That's because alongside expanding its interest with LTUM and expansion into Teels Marsh Playa, Surge also has investments in three mining locations that are expected to be rich in battery-producing metals. Obviously, its recent spike shows that investors are taking notice and taking advantage of what many refer to as undervalued prices. Still, while some investors are seizing at the opportunity, as noted, NILIF shares, from a sum of its parts perspective, remains in undervalued territory. The assets back up that calculus.
One of its projects sits in British Columbia and explores opportunities in two locations rich in copper, nickel, and other valuable metals. The first, Caledonia, is within a 31-mile long copper belt and 7 miles away from BHP's Island Copper Mine. The 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.
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. 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
Keep in mind, too, record-level demand isn't slowing. On the contrary, demand for battery-producing metals continues to increase, and Surge's in-progress developments position them perfectly to capitalize on the growing market. It's worth adding that 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, multiple applications and pricing visibility for those that mine the metals, like Surge, is important. The good news is that both measures are excellent regarding where the markets are going. Perhaps the best information of all is that Surge confirmed that they are fully funded to complete its 2022 explorations and will have plenty of reserves to work with, as well. That, too, should be a consideration when comparing the current market cap to its list of intrinsic assets and provides an additional reason for NILIF bulls to stake a claim at current prices.
There's another point of interest, and that's that Surge has taken significant steps to separate itself from the class of 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 better 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.
Moreover, as environmental sustainability becomes a more significant part of project decision-making, that distinction should keep Surge near the top of contract lists for consideration. In fact, with its ESG designation, Surge is better positioned than most to expand its operations and take advantage of fast-moving, competitive markets. In many respects, the ESG designation can allow Surge to better meet specific demands ahead of more senior mining companies. Hence, micro-cap metal explorer, big time company.
Sum Of Its Parts Presents A Bullish Proposition
Perhaps the best part of the NILIF investment proposition is that the sum of its parts presents compelling reasons to like its stock at current and even much higher levels. And while 2021 was transformational to NILIF, they show no sign of slowing down its intent to deliver a breakout year in 2022. With Surge having ample cash on hand and reserves in the ground, it's a likely outcome. Best of all, the combination of all could help transform this metal exploration company into a revenue-generating juggernaut.
Thus, as noted, with several ongoing explorations, its best balance sheet ever, and accretive projects in the most mining-friendly jurisdictions, the investment proposition is more than attractive; it's too big to ignore. So, while the recent surge to its stock price is impressive, based on its fundamentals, it's likely the precursor to what's in store in the coming days, weeks, and months. Hence, if weak markets try to take NILIF lower, it may be best considered an opportunity.
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