Clean Energy Boom 2.0 – Get Ready! (June 30, 2017)

This feels like 2006/2007 to me… Everywhere you look, ain’t nobody really got a smartphone (electric vehicle)… Sure, your rich boss owns a Blackberry (Tesla Model S), but outside of the affluent, how many of your family, friends, neighbors, co-workers, etc. have one?

Perhaps a few… but mass adoption?

Not by a long shot…

And anyone own a house equipped with solar panels and grid storage?

Even less likely…

But that’s all about to change… and like a thief in the night it will literally be — Blink and you’ll miss it.

The clean energy/Electric vehicle (EV) paradigm shift is fast approaching…

Either tag along for the ride, or get the hell out of the way!

Regardless, this unstoppable force cannot be stopped.

To get the party started, we all have the following announcement to look forward to this weekend.

Original source.

Elon Musk and Tesla (TSLA) are all the hype and rage in North America, but let’s be real here — China Is About to Bury Elon Musk in Batteries.

See here.

And here.

Oh, and don’t forget this!

As Terrell Owens once famously asked — “All I wanna know is if you got yo popcorn ready?

From Sports Illustrated.

Lock and loaded.

 

Here’s my own clean energy stock portfolio.

Critical Elements (CRE.V/CRECF) is my favorite lithium idea. The company’s got an advanced-stage hard rock lithium project located in Quebec (one of the best addresses in the world for mining), arguably the strongest offtake agreement (partnership with Helm AG) in the business for a junior, and an outstanding management team (lots of ex-Rockwood Lithium guys in key positions). Further, the share structure here is very tight and thus shareholder friendly (minimal dilution due to excessive shares outstanding and in-the-money options/warrants); management deserves to be commended for a fabulous job done over the years maintaining a tight registry in the face of a most difficult commodities bear market. Lots to like here with this story and I’m expecting the share price to climb steadily higher from this point forward as the clean energy boom really starts to take flight and investors look for a high quality name to ride the wave up.

Birimian Limited (BGS.AX/EEYMF) has got to be the most undervalued lithium stock on the market. The company looks to be sitting on a world class hard rock lithium project in Mali that keeps getting larger and larger (better) with each subsequent drill program. Unfortunately, the old management team was comprised of a bunch of buffoons who many would argue did nothing more than create shareholder destruction (earlier this year they wanted to pawn off the prized Bougouni lithium asset for an insulting figure of only A$107.5 million). Luckily (for shareholders), a new board and management team has been put into place to rectify the mess the old crew left behind (shout out to the RM guys, MB/CA/others for making this happen!). The share price could go up 4x from here… and still be considered cheap relative to some of its peers (e.g. Altura Mining (AJM.AX/ALTAF).

eCobalt Solutions (ECS.TO/ECSIF) is my current favorite cobalt idea because like Critical Elements, the company owns its flagship asset, the Idaho Cobalt Project (ICP), in a very safe and secure jurisdiction (Idaho). When it comes to cobalt, most of the world’s supply comes as a byproduct of copper and nickel mines, but what makes eCobalt Solutions unique is that their cobalt project is a primary cobalt deposit (byproduct being copper and gold). Also, unlike most juniors out there who are only now beginning to explore for cobalt, ICP is very far along the track (it was put on care and maintenance a few years back due to declining cobalt prices that made the project uneconomical, ironically enough), and the pathway to commercial production is not that far away (around 2020 timeframe). The knock on ICP (and thus the stock) is that it’s a really, really small project, so investors don’t really get the “scale of economies” with a rising cobalt price. Still, I think the pros outweigh the cons and the leverage that this stock should provide to investors is plenty enough for me. Quite frankly, I’d rather go with a “smallish” project located in Idaho as opposed to chasing after massive elephant deposits that are based in the Democratic Republic of Congo… I’m generally a risk-taker, but in this instance, since I already own a few shares of Ivanhoe Mines (IVN.TO/IVPAF), I’d prefer not to “double dip” in the Congo…

Black Rock Mining (BKT.AX) is my “go to” name for a spec graphite stock. Unlike lithium and cobalt, graphite has lagged behind quite badly and the entire sector is pretty much in despair right now… Shares of BKT.AX have gotten CRUSHED so far this year, but to no fault of the company. Black Rock owns an extremely high grade + high purity + good size graphite project, so if they can’t make it, I really doubt many other juniors will. The major red flag with this stock is that the deposit is located in Tanzania, which has become sort of a basket case in mining in recent months due to proposals to change the mining laws in the country, which could alter existing contracts… The bad news is starting to scare away investors and who really knows how much worse things will get? For myself, I invested into shares of BKT.AX before all this news hit… I’ve only got a spec position, which is plenty good enough for my goals. I’m not selling, but I’m certainly not adding any more shares either.

Pilbara Minerals (PLS.AX/PILBF) has got a world class hard rock lithium project located in a prime jurisdiction, Western Australia. Pilbara is also less risky than my other clean energy stocks because their Pilgangoora project is fully funded, permitted, and ready to start construction any minute now. However, because of all the positives this story has going for it, unfortunately, shares just aren’t all that cheap right now and the market cap is trading close to ~A$640 million fully diluted (already priced at/near fair value, given where Pilgangoora is at in its stage of development). Further, there are just way too many shares out (around ~1.7 billion shares fully diluted, taking into account options/warrants; talk about the opposite of a tight share structure), which further restricts the share price from going hyperbolic anytime soon. In other words, PLS.AX/PILBF is relatively low risk, but the upside is somewhat capped, especially when compared to the other picks in my clean energy portfolio. I don’t mind owning some shares of Pilbara, but it’s not the anchor of my portfolio by any means.

 

So, there you have it.

 

My own personal list of investments and how I plan to play Clean Energy Boom 2.0.

 

Over time, I may look to add/sell positions as I do more research and come up with new ideas.

 

There is certainly room for the addition of another cobalt play in the portfolio and that’ll be my main focus moving forward.

 

Here are some more general clean energy (lithium/cobalt/graphite) mining stocks for you…

 

As ALWAYS, please do you own research and due diligence before putting any of your own capital at risk!

 

Oh, and here’s some more exciting news that hit the wire today!

From Auto Blog.

The next major revolution is nearly upon us!

From Forbes.

Get yo popcorn ready!

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HRC
HRC
3 years ago

Critical Elements was my largest holding. I took a big gamble after finding out about it from you but did much research before I actually clicked buy. Up over 130% since last year and free carried now. Thanks for the research and background.

GDQMF took a big plunge today, day to day? Or did I miss something?

No Nonsense Landlord
3 years ago

Maybe fuel cells would be the next thing after lithium? Batteries have limitations, but fuel cells will eventually over take batteries.

I stick with my ETFs… No worrying about them, let the dividends come in.

al
al
2 years ago

Fuel cells will never amount to anything substantial. They need a lot of palladium / platinum to be doing their job (several grams per fuels cell). Both metals are very rare and mostly mined in South Africa, who’s busy destroying it’s mining sector (“power to the blacks movement”). To scale fuels cells up, you need mammoth amounts of one of those rare metals, and given that the yearly global refined production is in the 100’s of tons, not 1000’s of tons, they fuel cells are never to amount to much until another metal is found as replacement for the two… Read more »

TT
TT
3 years ago

Hey,
Have you looked in to Cobalt 27? Just listened Palisade Radios newest episode and heard about this for the first time. I think I have read everything that can be found in internet but having hard time assessing if it’s good investment or not.

Cobalt 27 idea is to be the Silver Wheaton to Cobalt and at least the idea sounds good..

al
al
2 years ago

“The clean energy/Electric vehicle (EV) paradigm shift is fast approaching… Either tag along for the ride, or get the hell out of the way! Regardless, this unstoppable force cannot be stopped.” It is not because Elon Musk is doing a great promotion job that everyone is convinced of this paradigm shift. It is not because the Chinese are once again investing mammoth amounts of money in a certain sector, that this sector will amount to a lot of stuff down the road … Let’s see if this unstoppable force could be stopped, when you look deeper down: 1. If 100… Read more »