Surge Battery Metals, Inc. (OTC: NILIF) stock continues to rally, now trading higher by more than 58% since the start of the month. Even better, momentum appears on its side, with its closing price higher in eight of the nine past trading sessions. What has investors excited about NILIF? Likely, the fact that Surge is positioned to become a considerable player in the massive EV battery metals sector. And batteries are the lynchpin to the electric vehicle markets.
In fact, they are vital to an industry expected to soar to a more than $46 trillion opportunity by 2050. And despite its micro-cap levels, Surge has assembled a respectable portfolio of assets that puts them on a scale with even the most prominent industry battery metal miners.
In fact, with three projects nearing its dig stage, Surge could become its own revenue-generating juggernaut. Thus, while its shares have surged by 58% in September to date, the $0.28 price tag is likely still a considerable bargain.
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Mining Battery Metals For Dollars
That's because Surge Battery Metals is in the right market at the right time. Better still, they have interests in three mining properties that can turn its valuable battery-producing metals into dollars. Even better, its properties offer diversification, enabling Surge to extend its market reach by selling a unique assortment of metal assets. Notably, all are seeing an intense increase in client demand. That bodes well for Surge.
And sales can be substantial, with Surge expecting its British Columbia operations to be a significant contributor. Two locations loaded 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, is metal-rich, indicating substantial recovery rates for copper and silver across the 4,302-acre allotment. Its second location in Central British Columbia is near another proven nickel mining project, which adds to the prospects of finding another large pool of assets. There, surveys indicate that the company may do well finding hard nickel, cobalt, chromium, and awaruite. Of course, finding the metals is only part of the equation. Selling it is the better part. And, with each metal contributing considerably to the production of EV batteries, there is expected to be no shortage of market interest. Other markets are also being targeted.
Surge will also benefit from assets at its Northern Nevada Lithium Project alongside Lithium America, currently America's only lithium producer. At that property, Surge plans to maximize the element-rich value of the property through a strategic plan that combines mining efficiency with marketing expertise. Also, like the EV battery metals, lithium is one of the most valuable elements powering the electric battery movement. From power tools to hypersonic missiles, it's a core element in a global move toward clean energy.
The most excellent news is that all of Surge's projects can generate substantial revenues in the near term. Even better, customers are lining up to buy its mined products.
Massive Demand From Automakers Alone
That's especially true with automakers, where 18 of the largest 20 manufacturers are spending billions on EV design and production. And for those that remember how the demand for rare earth metals sent those asset prices soaring, the same is happening in the battery metals space. Actually, pound for pound, battery metals may be in a better position than rare earth metals could have ever hoped for.
Better yet, finding and mining these metals is proving easier than mining rare earth metals or even gold, for that matter. And companies like Surge that are early to the sector can benefit from clients already wanting to secure supply deals ahead of the dig.
Thus, while Surge is funded to complete its 2021 ambitions, it should have no problems finding additional capital if needed. Even better, its assets in the ground, which appreciate alongside market pricing, do more than bring shareholder value; they could generate partnership interests as a strategic option. Still, that's not to say Surge won't go it alone. They likely will.
Further, as supply deals continue to be made, Surge is well-positioned to ink some of its own. And with the resources in place to capture swelling market interest, that could happen sooner rather than later. In fact, part of its recent share price rally could be attributed to investors getting ahead of news on that front. And by tapping into valuable metal and element deposits in British Columbia and Nevada, Surge is indeed positioned to attract substantial pre and post-dig interest.
Valuation Spike From EV Battery Market interest
The more excellent news is that Surge has made itself a part of a booming market. Last year, EV sales soared over 40% from the previous year. Still, while an impressive jump, EV adoption is expected to continue for decades more. Better still for Surge, while Forbes published an article predicting that around 90% of battery demand will come from within the EV industry, the global clean-energy movement puts other potentially massive opportunities in play as well. And as technology ramps, those opportunities will likely increase in number. All can be accretive to a rising Surge valuation, even with assets in the ground.
Plus, Surge's approach to mining is 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. As noted, they shouldn't find any shortage of market interest.
Copper, nickel, and lithium demand is forecasted to increase 15x by 2030 in step with the growth in the EV market. However, while great news for Surge on the EV battery front, investors need to value its lithium interests as part of the value proposition.
The spike in demand in that market also brings significant revenue-generating opportunities to Surge. And with demand creating pricing power for all its metals, capitalizing and maximizing opportunities is in Surge's crosshairs. Best of all, its ESG mandated projects could accelerate that intent.
In fact, ESG (Environmental, Social and Corporate Governance) mandated companies are projected to grow almost 3x as fast as non-ESG-mandated businesses. And with decision-makers prioritizing the value in environmental sustainability, Surge gets added attention. Consequently, with this ESG distinction, Surge is better positioned than most to expand its operations quickly as additional market opportunities emerge.
Better Batteries Are The Lynchpin Of The EV Market
Know this, too. A better battery is the lynchpin to power and accelerate growth in the EV sector. Without better performance, growth will be slowed. Moreover, while consumers may like the EV concept- speed, comfort, and longevity still matter. Thus, better batteries using better materials will be in focus for the foreseeable future.
Knowing that, Surge has set its intentions on mining and selling the materials absolutely necessary to help create a better and stronger battery solution. In doing so, they will do more than capturing their share of a substantial market; they get embedded as a go-to contributor to the low carbon economy. Thus, they inherently get multiple shots on revenue-generating goals.
This adds to the proposition, too. Analysts suggest that while the electric vehicle sector may enjoy an expected 15X increase in demand, the battery metals market could see 500X that level. Moreover, the EV sector is still ramping, making additional applications for Surge's mined products more likely as technology makes batteries more powerful. Inevitably, one can't go without the other.
And that reality could help perpetuate substantial and sustained growth for Surge Battery Metals.
Extracting Value for A better EV Battery
Here's the better news. Despite its tremendous month-to-date gains, Surge Battery Metals is positioned to move substantially higher on production and asset updates. From an investor's perspective, trading ahead of that may be a wise consideration. But more than waiting on company updates, being invested in a market that is experiencing exponential increases in demand is a smart place to be as well.
And with Surge in the market, combined with proven reserves in the ground to capitalize on enormous market demand, they are better positioned than ever for near and long-term growth. Hence, its current $18 million market cap may be the springboard to higher valuations.
Currently, with Surge being fully funded to complete 2021 explorations and being ESG compliant, the gap between the current share price and intrinsic value appears too wide. However, as Surge continues to make progress in its exploration and mining activities, that gap should start to close.
And with trillions of dollars in play in the battery metals space over the next few decades, catching Surge Battery Metals, Inc. at ground floor prices could help deliver significant near and long-term gains.
Better still, with some analysts referring to the battery metals market as a generational investment opportunity, gains can be more than significant; they may be exponential. That would be great news for Surge Battery Metals, Inc. investors.
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