Victory Battery Metals Corp's (OTC Pink: VRCFF) share price could be exposing a significant investment opportunity. And here's what supports that proposition: VRCFF is thinly traded, has a considerable asset portfolio developing promising properties in mining-friendly jurisdictions, and has just advanced one of its projects from early to advanced stage exploration status. In other words, its roughly $0.05 stock price on Wednesday may be neglecting considerable intrinsic and inherent value. That's not necessarily bad news- those types of valuation disconnects best expose opportunities.
In other words, do some due diligence and consider seizing the opportunity. VRCFF could indeed be a case proving that share price isn't always an accurate measure of company fundamentals or its prospects. In fact, the sum of VRCFF's parts indicates current value could be appreciably flawed. Again, not an overzealous presentation. In addition to holding and advancing exploration initiatives at excellent asset locations, VRCFF can be considered as a more de-risked mining and metals exploration play, noting that it is developing existing projects in very mining-friendly jurisdictions adjacent to industry behemoths projects by Agnico Eagle (NYSE; AEM) and American Lithium (NASDAQ: AMLI). Those investing in the metals sector know that locations indeed matter. Victory Battery checks those boxes.
But they check two others that are just as important- having the right strategy to exploit asset value and having the capital to do so. Moreover, pivoting its operations focus to more fully monetize assets by serving the massive demand from the EV and green energy sectors, VRCFF has put itself in its best-ever position to grow during 2023.
In-Progress Projects At Mining-Friendly Locations
And from multiple projects. This week, VRCFF announced its exploration team is onsite conducting its summer exploration program at its Georgia Lake Lithium Project in the Thunder Bay Mining District, Ontario. Those following VRCFF know the Georgia Lake Lithium project is a potent lithium play in a proven lithium region. The update indicates progress could be significant in 2023.
Victory Battery noted in its update that boots are on the ground at the site, led by two geologists and two prospectors tasked with identifying geological or geochemical indicators of Li-bearing pegmatites. The current exploration program consists of prospecting and sampling, as well as rock, till and stream sediment sampling directed towards identifying geological or geochemical indicators of Li-bearing pegmatites on the Georgia Lake Property, and has been designed to build upon the information showing that Muscovite-bearing granites are associated with lithium-bearing pegmatites on Rock Tech's property and those metasediments and muscovite granites occur close to the property to the west, south, and east. Victory expects the Georgia Lake Property to hold much greater potential for Li-bearing pegmatites, which they believe were overlooked during regional mapping.
That's just one value driver currently being tested. Victory Battery Metals maintains four other projects: Stingray Lithium Array in James Bay, Quebec; Tahlo Lake, in the Babine Copper-Gold Porphyry District, British Columbia; Saguenay Nickel Project, Quebec; and Black Diablo Copper and Manganese in Nevada. Like Georgia Lake Lithium, these two are on the 2023 exploration and development agenda. Noting that these sites are located within close proximity to historically proven exploration and mining in infrastructure-ready jurisdictions, drilling into each's value could happen faster than expected.
Remember that Victory is accelerating its project ambitions knowing that North America and its allies need what Victory intends to deliver: lithium. Well-covered in headlines, the lithium supply chain lacks balance, with estimates suggesting that China provides upwards of 70% of lithium production while only making about 13% of that supply available to demand outside its borders. That's bad now and is likely to get worse. With surging demand for lithium needed to power critical sectors, including planned changes to grids and energy infrastructures, China could be holding a weapon more potent than conventional weaponry. In fact, the control over lithium markets could have catastrophic implications for those planning to develop sustainable and clean energy products and services.
But there is a battle line drawn. The United States, Canada, and other European countries are finally recognizing the threat and, in response, are helping guide potentially billions of dollars in grants and incentives to stabilize supplies. Hence, in the right places with the right assets at the right time, Victory Battery Metals appears exceptionally well-positioned to seize opportunities inherent to that movement.
Momentum at Victory Battery's Back in 2H/2023
Fueling its ambitious 2023 agenda, Victory Battery strengthened its capital position by completing a successful $2 million private placement and a non-brokered Unit Private placement that raised $300,000 through the sale of 6,000,000 Units. Those deals were finalized in March and, all combined, are expected to be sufficient to execute its near-term initiatives. That's excellent news for VRCFF, the markets, and investors.
Remember, any company, trading at pennies or dollars, can be an enormous financial beneficiary if it can deliver lithium. Of course, that includes Victory, whose mission, in part, is to close the appreciable gap between supply and demand. As noted, they may get help. Federal mandates around lithium and critical battery metals production in the United States and Canada provide ways for junior mining and exploration companies, like VRCFF, to participate, capitalize, and maximize individual opportunities. Still, more than money is needed to generate lithium and other much-needed battery metals. Exploring the right locations matters the most, another box that VRCFF checks.
That combination could allow VRCFF to cash in on its opportunities through company-sponsored development or partnerships, including with its large-cap sector player neighbors. Keep in mind that assets proven under the ground accrue to the balance sheet, so VRCFF doesn't necessarily need to fund a multi-million-dollar dig program; it's likely plenty of suitors would line up to help financially for a stake. Remember, companies like Tesla (NASDAQ: TSLA), Ford (NYSE: F), and General Motors (NYSE: GM) are making no secret of their willingness to buy as much lithium and other battery metals as possible to file their product development programs. Tesla CEO Elon Musk has been more explicit, saying he would not rule out mining for lithium through his own company. While an ambitious goal, the fastest way for him, or any company, to secure the metals needed would be to partner with a company on location.
And with Victory Battery Metal's active and diversified programs targeting precisely what the EV and clean energy sector needs, they could be high on the list of such companies.
Consolidation Is A Win For The Clean Energy Movement
Frankly, consolidation is expected, and it's a win for the global clean energy movement. It's also a win for lithium explorations that can supply the metal, noting that worldwide electrification and net-zero emissions have made lithium more valuable than gold, particularly for its need to power EVs, which are expected to account for over 40% of total passenger car sales by 2030. That expectation and the lithium demand inherently involved put VRCFF in a sweet spot of opportunity as it continues to develop its assets in friendly territories.
While Georgia Lake earned the most recent headline, VRCFF's flagship project is its Smokey Clay Lithium asset, located 20 miles north of Clayton Valley and 20 miles west of American Lithium's flagship exploration location. It resides in Esmeralda County, one of North America's most prolific lithium regions and home to multiple large-tonnage lithium clay deposits with acceptable grades of over 900 parts per million (ppm). A spring drilling program that concluded in May 2023 provided Victory with the evidence needed to increase estimates of the area and thickness of Smokey Lithium's targeted claystone sequences. This led to the milestone announcement of changing the project's status from early-stage to advanced.
Smokey Clay Lithium and Georgia Lake are far from being the only value driver. VRCFF is exploring and developing other potentially asset-rich properties, including its Stingray Properties, which consist of 347 non-contiguous claims directly adjacent to Patriot Battery Metals' (TSXV: PMET) promising Corvette Property. What is interesting about this project is that the area is relatively under-explored, with some sections even remaining entirely unexplored. But that's not necessarily bad news. In fact, it can be quite the opposite if VRCFF shows data supporting its belief in underground treasure. And they are building that case, with favorable geology reports indicating that properties to the east and west of Victory's claims reportedly host pegmatite dikes and, better yet, show prospective bias for pegmatites similar to those found on Infinity Stone's Taiga and Camaro projects.
Another value driver inherent to Stingray is that by being located in Quebec's James Bay lithium district, which is expected to become the latest lithium hub, Victory can benefit from developing and existing infrastructure within the region. That advantage saves the company considerable capital and paves a more viable pathway toward closing strategic acquisitions and partnerships.
Appraising VRCFF's Sum Of Its Parts
Other projects are also in play, and they, too, should not go underappreciated or under-valued. Victory's Tahlo Lake Project, one of the newest additions to its pipeline, is also in play. Tahlo Lake is a 1,688 hectares property in the prolific Babine Copper-Gold Porphyry District in British Columbia. Notably, it sits adjacent to the same north-northwest trending fault as the prolific Morrison Deposit. Also of potential value, VRCFF recently confirmed in a mag survey of the property that a historic copper anomaly in the region's soil overlies a linear mag high. Again, costs can be low to appraise and develop the opportunity, as infrastructure exists from American Eagle Gold's (TSX: AE) NAK Property, one of several major projects within the district.
The Saguenay Nickel Project consists of five claims over 286.4 hectares. An assessment in 1959 showed the property to contain respectable nickel content. Despite that bullish report, little to no modern exploration efforts have occurred in the region until Victory's acquisition. VRCFF is assessing the property's potential to determine the most efficient and profitable path forward for exploiting its value.
Although in its early stages of exploration and consideration, Victory's Black Diablo could also significantly contribute to long-term value. The company has 16 confirmed claims. Essential to its appraisal, this south of Winnemucca project is indicated to contain VMS copper deposits in the same belt of rocks as Nevada Sunrise Gold's Coronado VMS Project. A boost of production optimism is warranted, noting that the project is only 10 miles north of the Big Mike Copper Mine, which produced about 25 million pounds of copper in 100,000 tons of ore grading 10.5 percent copper.
Positioned To Exploit Its Value Potential In 2023
All tolled, the sum of Victory Battery Metals' parts, performance, and ambitious 2023 program expose a valuation gap between share price, assets, and near-term potential. It's a gap worth seizing, knowing that stocks are most fairly valued when factoring in their intrinsics, capital position and structure, and level of diversification. A company that hits all those measures generally scores better on the share price front. And since VRCFF meets all that criteria, taking advantage of this under-the-radar company may be a wise and timely consideration.
There's a caveat, think about the proposition sooner than later. Windows of opportunity have a way of closing quickly when investors find untapped value. That could be the case for Victory Battery Metals. Yes, it's a microcap stock with risk. But by sitting on top of potentially enormous battery metals reserves, the rewards, which could add exponential value, weigh in its favor for being a compelling opportunity.
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