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This Company is Looking to Mine Lithium From Alberta’s Old Oil and Gas Wells

Chris Doornbos, chief executive of Calgary-based E3 Metals Corp, looks at Alberta’s vast depleted oil and gas reservoirs and sees only opportunity.

His company is testing technology…

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Chris Doornbos, chief executive of Calgary-based E3 Metals Corp, looks at Alberta’s vast depleted oil and gas reservoirs and sees only opportunity.

His company is testing technology that, if successful, would extract lithium from the brine in old wells, which eventually could find its way into the batteries that power electric vehicles.

“It’s a big opportunity for the province because producing lithium is very similar to producing oil and gas,” said Doornbos, a geologist who previously worked for Suncor Energy Inc. “There’s a huge repurposing side to this because not only are we looking at using the infrastructure, but we’re looking at the people and the skillsets — everything that oil is to Alberta, lithium could be as well.”

And like the oil sector, it has been anything but smooth sailing. On Thursday, E3 Metals announced it hopes to open its first facility to test its technology by the end of the month — a precursor to a pilot project that cost about $500,000 to develop — and its stock promptly dropped 11 per cent.

Doornrbos shrugged off the stock dive as a fact of life for small market cap company — about $111 million, ranking it among the largest lithium developers in Canada — and how investors often use news events as opportunity to exit stocks, anticipating high trading. Indeed, zooming out, the company has experienced an incredible surge since this fall as its stock has risen 500 per cent from about 39 cents at the end of September to $2.77 by close on the Canadian Venture Exchange.

Still, the investor sell-off highlights the challenges that lie ahead for Alberta, as E3 Metals and other companies, angle to tap into the province’s vast network of petrochemical experts and its existing resources, to stake a piece of the action in the world’s fast-growing, yet nascent electric vehicle supply chain. Lithium prices are suddenly rising again, but the small scale of the market, especially in comparison to oil or other commodities, means increased volatility, and tight competition.

“There are plenty of companies trying to essentially produce proprietary technology called direct lithium extraction,” said George Miller, an analyst at Benchmark Intelligence in London, who studies the lithium market. “From our perspective, that’s something that’s yet to be proven at commercial scale.”

He added, “I think it’s got a lot of potential, but we’ve yet to see the results.”

Still, direct lithium extraction technology is likely to stay in the news, at least for a little while.

After nearly three years of falling prices, the lithium market is once again predicted to fall into deficit in 2021 and prices are jumping.

In the month of January alone, the price for lithium that can be used in batteries is estimated to have surged more than 40 per cent, according to Miller.

He credited rising electric vehicle production and sales in China during the latter half of 2020, and similar sentiment in Europe, as catalysts for the rise, which he said have exceeded previous runs.

“It’s the largest price move we’ve ever seen,” Miller said.

He estimated global lithium production at 300,000 tonnes per year, minute compared to commodities such as copper, estimated at 18 million tonnes; and lithium is opaque, with most sales transactions occurring in private. Miller said he obtains his pricing estimate by tracking sales reports, talking to insiders and following the market

The burgeoning electric vehicle market, however, means lithium demand is expected to grow by 25 to 30 per cent per year for the next decade, reaching two million tonnes by 2030, according to Miller.

 A rechargeable lithium-ion battery for the Volkswagen ID.3 electric car is pictured at the Volkswagen car factory in Germany.

In Canada, that demand forecast is creating opportunities for lithium developers, whether they aim to extract from wastewater brine or from a hard rock mining operation.

There are at least 60 companies trading on the TSX or TSX Venture exchange that are exploring for lithium, about 38 per cent of which are focused on property in Canada, according to a TMX Group Ltd. spokeswoman.

While surging lithium prices have attracted investor attention to E3 Metals, there have also been some stumbling blocks in recent months.

In November, the Philadelphia-based Livent Corp., which supplies battery metals to Tesla Inc., cut ties with E3 Metals barely a year after striking a deal to invest US$5.5 million, citing capital constraints.

Its exit came weeks after it announced the purchase of half of the Quebec-based entity that controls Nemaska Lithium Inc., which filed for court protection after cost overruns forced it to halt development of a lithium mine and electrochemical plant in Quebec.

Before leaving Livent had invested only only US$2 million in E3 Metals.

Sid Rajeev, head of research for Fundamental Research Corp. in Vancouver, whose company is paid by E3 Metals to provide analyst coverage, said the exit forced E3 to look elsewhere for financing.

Last month, E3 announced a bought deal, which it hopes to close next week Doornbos said. It would raise $7 million by issuing 5.9 million shares at $1.185 apiece — a roughly 55 per cent discount to its midday trading price.

“We are seeing a lot of companies doing financing at a big discount,” said Rajeev, adding the bought deal still stands at a premium to its trading price last fall.

Echoing comments made by Miller, he wrote that if the technology works, it could be “revolutionary.”

The company controls 250,000 acres in south-central Alberta, and claims seven million tonnes of inferred lithium carbonate equivalent. It hopes to produce 20,000 tonnes of battery-quality lithium hydroxide monohydrate per year through a multi-step process that uses ion exchange to extract lithium out of oil and gas brine.

Next, the lithium is further refined, fed into electrolyzers to produce an even more pure lithium hydroxide solution, crystallized into lithium hydroxide salts and finally ready to be transported for sale.

“The hard part is already done,” said Doornbos. “We’ve been developing this technology for four years, we have proof of concept we just need proof of scale.”

Miller, the Benchmark analyst, said there are good reasons why people call lithium the new oil, given its connection to transportation, but it’s not a totally accurate comparison.

For one thing, oil is a fuel that powers vehicles, whereas lithium is a component of a vehicle battery that can be continually recharged. In that sense, he said a better comparison may be to the actual “tank” in your vehicle that holds gasoline.

“Really, the goal in the (electric vehicle) industry is to be mining as little as possible and recycling as much as possible,” he said. “I don’t think you can really say the same of the fossil fuel industry, there’s no replenishing there.”

Financial Post

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Energy & Critical Metals

LCID Stock Alert: There’s Nothing Spooky About This Oct. 30 Catalyst for Lucid Motors

For the electric vehicle fans who’ve been following Lucid Motors (NASDAQ:LCID) closely or actually ordered a Lucid Air themselves, Oct. 30 will mark…

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For the electric vehicle fans who’ve been following Lucid Motors (NASDAQ:LCID) closely or actually ordered a Lucid Air themselves, Oct. 30 will mark an important catalyst. This week began with the company tweeting a photo that indicated that it was about to begin shipping out its first models of the Lucid Air. Today, Lucid confirmed that the week would end with the vehicle deliveries beginning on Friday, Oct. 30. LCID stock has seen plenty of turbulence since the fall began but for investors, this next catalyst should not be scary.

Source: gg5795 / Shutterstock.com

What’s Happening With LCID Stock

This morning’s news has sent LCID shares up by 3%. This is in keeping with the solid week the company has enjoyed, with shares rising 12.6% over the past five days. Despite a significant decline early in the month, LCID stock has rebounded since and is on track to finish October out strong.

Good news for Lucid means bad news for its competitors. As LCID stock continues to rise, its competitor Nio (NYSE:NIO) is falling by 1.4%.

Lucid has taken a long road to get here, but the stretch ahead looks less rocky.

What It Means

As previously noted, up until now, Lucid’s competitors have enjoyed the fact that it does not have any models on the market. As of the end of this week, that will change. Heading into the holiday season, Lucid will have its flagship sedan on the road and in showrooms across the country.

#DreamAhead pic.twitter.com/hVsGQG6f6z

— Lucid Motors (@LucidMotors) October 24, 2021

Lucid played the long game and as much as it may have spooked some investors, it seems to be paying off. The company has also used this time to establish dealerships in Canada, gaining an early foothold in a market with fewer domestic EV producers than the U.S.

The Next Catalyst Doesn’t Look Too Scary

As with any EV producer, upcoming success is largely dependent on battery production. InvestorPlace’s Dana Blankenhorn recently noted this. As he highlighted, Lucid CEO Peter Rawlinson is exactly the type of leader who could help the company secure the contract to build the world’s largest battery storage system. This development would put Lucid in a unique position to succeed as other companies struggle to procure battery components amid the supply chain crisis.

Lucid did a great job procuring media coverage and staying in the public eye before drivers could admire its cars on the street. Now that we’re about to be able to do exactly that, interest in Lucid’s vehicles is going to expand even further.

The Lucid Air may be coming soon to a driveway near you, and LCID stock is worth watching as a result.

On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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The post LCID Stock Alert: There’s Nothing Spooky About This Oct. 30 Catalyst for Lucid Motors appeared first on InvestorPlace.

Author: Samuel O'Brient

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Energy & Critical Metals

Top Uranium Stocks To Watch Right Now

Before November begins, which uranium stocks will you watch?

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Before November begins, which uranium stocks will you watch?

When it comes to mining companies, uranium stocks are sometimes disregarded by investors. Many investors are unaware that uranium is a massive industry with activities all over the world. COVID-19 has also had an impact on the uranium stock market. COVID led Uranium stocks to reach levels not seen since the Fukushima Daiichi nuclear disaster in Japan in 2011.

Some feel that Reddit is responsible for some of the uranium hysteria. Retail investors have become extremely influential in the stock market in the last year, as you may have seen. In February, a subreddit called r/UraniumSqueeze was launched for uranium retail investors. So far, the subreddit has amassed over 18,200 members.

But how can you know which uranium stocks are the best to buy? Perhaps you’ve discovered a uranium firm in which you’d want to invest, but you’re unfamiliar with the market. The best things to keep up with are company-specific news, global news, and industry news. A uranium shortage, for example, might cause a price increase. For the time being, let’s look at three uranium stocks that are doing well in the market.

Top Uranium Stocks To Watch

  1. Energy Fuels Inc. (NYSE: UUUU)
  2. Cameco Corporation (NYSE: CCJ)
  3. Denison Mines Corp. (NYSE: DNN)

Energy Fuels Inc. (NYSE: UUUU)

Energy Fuels Inc. obtains, recovers, explores for, and sells uranium. Among other things, it owns and operates the Nichols Ranch project. It also has uranium property holdings and projects for exploration, permitting, and evaluation. The majority of its holdings are in Utah, Wyoming, Arizona, Colorado, and New Mexico.

The corporation began the earnings season at the end of July, releasing its second-quarter results. As of the conclusion of the quarter, the firm had $98.8 million in working capital. The current inventory of Energy Fuels is worth $39.1 million.

Mark S. Chalmers, the President and CEO of Energy Fuels said, “Energy Fuels achieved another significant milestone in restoring U.S. rare earth supply chains when we recently announced the successful production of rare earth carbonate from U.S.-sourced natural monazite sand at our White Mesa Mill.” Based on this new info, will UUUU stock be on your watchlist in November?

Cameco Corporation (NYSE: CCJ)

Cameco Corporation is a uranium stock that is primarily engaged in the production and sale of uranium. The company’s two divisions are uranium and fuel services. The uranium division of Cameco mines, grinds, and buys and sells uranium concentrate. Its primary uranium asset is the Cigar Lake deposit in Canada. Its fuel services division refines, converts, and fabricates uranium concrete, as well as buys and sells conversion services.

The corporation released its second-quarter results for the year on July 28th. Revenue, gross profit (loss), and cash supplied by operations all decreased year over year. At the time, the corporation is still working to recover from the pandemic’s consequences.

CEO of Cameco, Tom Gitzel said, “We are taking the steps we believe are necessary, including investing in digital and automation technologies, to support the restart of our tier-one assets to create a more flexible asset base that will allow us to align our production decisions with our contract portfolio commitments and opportunities, allow us to eliminate the care and maintenance costs incurred while our tier-one production is suspended, and to benefit from the very favorable life-of-mine economics our tier-one assets provide.” Now that you know the latest about CCJ, will it make your uranium stock watchlist right now?

Denison Mines Corp. (NYSE: DNN)

Denison Mines Corp. is a mining stock that we have frequently discussed on our blog owing to its market velocity. The company’s stock price has risen dramatically during October. This is a uranium exploration firm established in Canada. Denison is involved in the development of several uranium projects throughout the country, notably the Wheeler River project, of which it owns 95 percent of.

The company announced the sale of Goviex shares and warrants for up to $41.6 million on October 21st. The business agreed to sell 32,500,000 common shares of GoviEx Uranium Inc. in a private transaction. Denison was holding these shares for investment purposes at the time. The corporation will get $15,600,000 in gross revenues and will retain 32,644,000 shares. Denison will get an additional $26 million in gross profits if the warrants are fully exercised.

This deal is expected to be completed by the end of October 2021. Denison has announced that the net proceeds of the deal will be used for general corporate purposes. It will be fascinating to see how this transaction plays out and how it affects the DNN stock price. With all of this in mind, will DNN be on your list of uranium stocks to keep an eye on?

Best Uranium Stocks To Buy?

Finding the best uranium stocks to buy can be a difficult process. That is why staying up to date on the newest market developments can be quite beneficial. In the case of most mining stocks, sector news is critical to the investment process. So, which uranium stocks will be on your radar in November 2021?

The post Top Uranium Stocks To Watch Before November appeared first on Gold Stocks to Buy, Picks, News and Information | GoldStocks.com.

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Author: Joe Samuel

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A $57 Price Target Could Be Just the Beginning for Xpeng

Let’s be honest. Not every investor loves Chinese companies and stocks right now. Perhaps some investors saw what happened to ride-hailing giant Didi…

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Let’s be honest. Not every investor loves Chinese companies and stocks right now. Perhaps some investors saw what happened to ride-hailing giant Didi Global (NYSE:DIDI). As a result, maybe they’re afraid to take a position in China-based electric vehicle (EV) maker Xpeng (NYSE:XPEV) because XPEV stock might also tank.

Source: Johnnie Rik / Shutterstock.com

Yet let’s not make generalizations. Granted, the Chinese government has been cracking down on some companies, mainly due to cybersecurity and antitrust concerns.

But not every China-based company is in trouble. Moreover, XPEV stock won’t necessarily meet the same fate as Didi and other Chinese stocks.

Indeed, recently issued statistics indicate that Xpeng is firing on all cylinders. Besides, one prominent analyst is bracing for its shares to climb, and his bullish argument is convincing.

A Closer Look at XPEV Stock

The shares did have their time in the sun, back in November 2020. At that time, the share price rocketed from $20 to a peak of $74.49.

Unfortunately, folks who chased the stock in the mid-$70’s were soon punished for their haste. As it turned out, a nasty crash ensued in late 2020 and persisted throughout the first few months of 2021.

Since the summer, XPEV stock has been rangebound and can’t seem to break above $45. There’s an old saying, though: the longer the base, the higher in space. In other words, prolonged sideways periods can sometimes be the launch pad for a major breakout.

So don’t be discouraged by the lateral movement of XPEV stock. A big move could be just around the corner – and it would be a shame if you don’t have a position in the stock when it happens.

No One Can Argue With These Results

Stocks will always have their doubters and naysayers, especially when it comes to Chinese companies nowadays. However, the skeptics would be hard-pressed to argue with the numbers included in Xpeng’s recently published vehicle delivery update.

Seriously, the company just killed it across the board. For one thing, Xpeng posted 10,412 deliveries in September, marking the company’s highest-ever monthly delivery figure.

Along with passing the 10,000 milestone, that number also represents a 199% year-over-year surge and a 44% increase over the previous month.

Do you need more ammo that supports the bull thesis? Here you go: for Q3, Xpeng achieved a quarterly record of 25,666 deliveries. That amounted to a 48% increase versus Q2, as well as a 199% YOY improvement.

But wait; it gets even better when we extend the timeline. In the first nine months of the year, Xpeng delivered a total of 56,404 vehicles, which represents a whopping YOY increase of 300%.

Bear in mind, this occurred during a semiconductor shortage, as well as the Chinese government’s crackdown on multiple industries.

Yu Said It

Even with those delivery stats in mind, some folks will still be nervous about Xpeng because Chinese stocks have taken a beating this year. To help assuage their fears, I’ll refer the skeptics to Deutsche Bank’s Edison Yu.

While acknowledging that there have been several reasons for the underperformance of Chinese stocks, Yu asserts that the “largest overhang” has been investors’ reluctance to commit to the nation’s equities following the Chinese authorities’ crackdown on Didi.

I tend to concur with Yu’s reasoning. Looking ahead, Yu believes that “sentiment {towards Chinese EV stocks)  could be bottoming going into year-end.” That, of course, should be beneficial to Xpeng and its shareholders.

Furthermore, for Q4, Yu believes that Xpeng’s delivery guidance in the 35,000 to 40,000 range, and he predicts that the company will deliver 15,000 vehicles in December.

Those estimates are realistic, and would bring Xpeng’s full-year volume to almost 94,000 deliveries, representing a 247% YOY increase. Yu raised his price target on XPEV stock from $51 to an even more ambitious $57.

The Bottom Line

I like the sound of $57, but long-term investors can aim even higher than that if they truly believe in the company. And why wouldn’t they? Just look at those delivery numbers and the surges in the automaker’s deliveries.

They’re outstanding and suggest that XPEV stock deserves to be much higher.

So if you own the stock, just be patient and be prepared for a spectacular ending to Xpeng’s  record-breaking year.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

The post A $57 Price Target Could Be Just the Beginning for Xpeng appeared first on InvestorPlace.

Author: David Moadel

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