The Unknown Metal That Global Tech Giants Are Fighting Over

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Jul 07, 2023, 08:00 ET

FN Media Group Presents Oilprice.com Market Commentary

LONDON, July 7, 2023 /PRNewswire/ -- In recent years, critical minerals have become intimately linked with the national security of Western nations. Access to critical minerals is essential to any country hoping to gain or maintain technological superiority over its rivals - a fact that China was distinctly aware of when it moved to buy up the industry over a decade ago. But now a fightback is underway. Companies mentioned in this release include: Freeport-McMoRan Inc. (NYSE: FCX), Turquoise Hill Resources (NYSE: TRQ), FMC Corporation (NYSE: FMC), Rio Tinto (NYSE: RIO), Livent Corporation (NYSE: LTHM).

Around the world, governments are racing to secure their critical mineral supply chains as they invest heavily in new exploration and production.

In fact, Canada was so concerned about critical minerals supply that it forced three Chinese companies to sell their mining assets in the country. And as these countries move to combat China, the non-Chinese companies sitting on the strategically vital resources are becoming increasingly important.

In Canada, for example, when the Chinese companies were forced to divest their ownership interests in the country - one Canadian miner, PowerMetals Corp (PWM,PWRMF), was left in control of not only a potential high-quality lithium mine but what might become the only functioning cesium mine in the world that China doesn't own. And while cesium may not be as well-known as lithium, it is undoubtedly critical.

Cesium is central to the United States' goal of winning the 5G race, it plays a key role in aircraft guidance systems, oil and gas drilling, and global positioning satellites. And despite its importance, all the known cesium deposits around the world have either been depleted, or the mines have been rendered inoperable.

All of this could leave PowerMetals Corp and its Case Lake project as one of the most unique and exciting natural resource plays in the world today.

A 'Geologist's Dream'

It isn't just the geopolitical context and resource quality that makes PowerMetals Corp (PWM,PWRMF) such an intriguing prospect. The miner's main exploration project has been described by the company's Chairman as a "geologist's dream" and the equivalent of "prime real estate on Park Avenue".

It's accessible year-round by well-maintained roads, with all infrastructure in place, a real rarity in the mining industry. Nearly all discoveries in Canada's critical metals market have been made in extremely remote areas. But at the Case Lake prospect, not only is all the road and electrical infrastructure already in place, but it even boasts cell phone signals - a benefit that is unheard of in most mining venues.

According to Power Metals, Case Lake is one of the most inexpensive properties to drill in Canada—not just because of its easy access, either. The cesium, lithium, and tantalum intersections here are in pegmatite that is exposed on the surface and running so shallow that it is less than 50 meters deep in various areas. It's a story that seems to keep getting better.

An Australian Advantage

According to PowerMetals, Case Lake has high-grade cesium that is similar to Australia's famous Sinclair Mine. That fact becomes increasingly interesting when you look at the experts and money backing this up-and-coming Canadian miner.

When the Chinese companies were forced out of their interests in Canada, big Australian money and expertise jumped at the opportunity to secure a potential critical minerals mine.And when you add Australian cesium development expertise to what looks like a very promising potential for a mine, everything can fall into place.

Australia's first commercial cesium mine, Sinclair, extracted its last cesium in 2019. And it's one of only three in the world. The other two are the Tanco mine in Manitoba, Canada, and the Bikita mine in Zimbabwe. Tanco shut down after the mine collapsed in 2015, and Bitika was depleted in 2018.

That could make PowerMetals' Case Lake property a very big deal. It's also why we think Canada is adamant that China does not get its hands on what could end up being the only supply of cesium known, or left, in the world. It also has Washington's full support as the U.S. backs any effort to overturn China's dominance of critical mineral supply chains.

The smart Australian money we are referring to is Australia's Winsome Resources (ASX:WR1) which jumped at the opportunity to replace Chinese investors when the Canadian government issued its eviction notice in November last year due to national security concerns. The involved Chinese company was mining giant Sinomine Resource Group a multi-billion market cap Beijing based giant. The new buyer Winsome bought their stake as soon as the Canadian government demanded the divesture. Not only did Winsome purchase Sinomine's 5.7% stake in Power Metals, but they have also since increased their stake to 10.7 % in the past couple of months.

Mining The Numbers

Before discovering cesium, PowerMetals was already making waves with its lithium and tantalum discoveries. So far, it has drilled 80 holes over some 15,000 meters at Case Lake, making a significant world-class, high-grade (over 4%) lithium discovery at a very shallow, open depth. Just a preview of the highlights from this discovery include:

1.94% Lithium and 323.75pp Tantalum over 26 meters
2.07% Lithium and 213.96pp Tantalum over 18 meters
4.75 % Lithium and 396.00pp Tantalum over 2 meters
1.71 % Lithium and 240.77pp Tantalum over 12 meters
1.20 % Lithium and 218.68pp Tantalum over 19 meters

It was while drilling for this lithium and tantalum that Power Metals made a surprise discovery of rare cesium at Case Lake's West Joe Dyke. This is some of the highest-grade cesium found in decades, with grades as high as 24% over good intervals.

24.07% Cesium over 1 meter
20.36% Cesium over 1 meter
22.22% Cesium over 2 meters
7.65% Cesium over 7.09 meters

It was then that a Chinese company pounced on the opportunity to acquire 5.7% of Power Metals. But now Canada has hit back - and Power Metals (PWM,PWRMF) is ready to move. As the global war for critical minerals heats up, it is companies like PowerMetals that are able to extricate themselves from China's influence that may have the most to gain.

Top Miners Are Capitalize On The Metals Boom

Freeport-McMoRan Inc. (NYSE: FCX), headquartered in Phoenix, Arizona, ranks amongst the world's leading mining companies. It boasts an impressive array of reserves comprising copper, gold, and molybdenum. Its most significant asset includes the Grasberg minerals district in Indonesia, one of the world's largest copper and gold deposits, and extensive mining operations in the Americas.

The rise of renewable energy and electric vehicle technologies has positioned copper as a crucial material. As a significant player in copper mining, Freeport-McMoRan stands to gain from this trend. Additionally, the company's sound operational performance and commitment to reducing debt make it an attractive prospect.

Turquoise Hill Resources (NYSE: TRQ), a Canadian firm based in Vancouver, is an international mining company primarily focused on operating and further developing the Oyu Tolgoi copper-gold mine in southern Mongolia. Turquoise Hill has a 66% interest in one of the world's largest known copper and gold deposits, with the remaining stake held by the Government of Mongolia.

With anticipated production ramp-up in the coming years, the Oyu Tolgoi mine offers immense growth potential. The company has been actively working on strengthening its balance sheet and enhancing its operational performance, adding to its long-term value creation proposition.

FMC Corporation (NYSE: FMC), located in Philadelphia, Pennsylvania, operates globally as an agricultural sciences company. It offers innovative solutions to growers worldwide. FMC plays a significant role in the lithium market, a key component in rechargeable batteries and other high-tech applications, even though it's not a traditional mining company.

FMC's dedication to innovation and sustainability is commendable. Its agricultural products significantly contribute to improving crop yield and quality, making it a key player in addressing global food security issues. FMC has seen growth owing to the strong demand for its crop protection products, driven by high commodity prices and robust agricultural market fundamentals.

Livent Corporation (NYSE: LTHM) is a global leader in lithium technology. This Philadelphia-based company is a spin-off from FMC Corporation. It supplies lithium used in batteries for hybrid and electric vehicles, mobile devices, and other consumer electronics.

The high-growth lithium market's increasing demand for electric vehicles makes Livent an appealing option for investors interested in green energy transition. The company's unique processing technology, focusing on high-purity lithium compounds, provides it with a competitive edge.

Rio Tinto (NYSE: RIO), a top-tier mining and metals organization, has a reputation for efficient operations and a dedication to sustainable practices. This UK-Australian multinational conducts business in approximately 35 nations worldwide and possesses considerable resources across a variety of commodities such as aluminum, copper, diamonds, coal, iron ore, and uranium. Supported by favorable market conditions, especially within copper and iron ore sectors, Rio Tinto's formidable portfolio presents an enticing opportunity for prospective investors.

Recently, Rio Tinto has amplified its efforts within the renewable energy industry. It's investing heavily in technologies designed to reduce carbon emissions and is proactively participating in the production of materials crucial to the renewable energy sector, including copper and lithium. With its robust financial performance, characterized by substantial profit margins and an appealing dividend yield, Rio Tinto could be an attractive option for investors seeking a regular income stream.

By. Tom Kool

**IMPORTANT! BY READING OUR CONTENT YOU EXPLICITLY AGREE TO THE FOLLOWING. PLEASE READ CAREFULLY**

Forward-Looking Statements

This publication contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this publication include that the Canadian mining sector will continue to protect its supply of critical minerals without involvement of China; that cesium and other metals will remain as critical minerals will continue as a national security issue for Western countries; that access to rare metals, and in particular cesium, will be essential to gaining technical superiority, including the development of 5G networks; that cesium and other rare earth metals will continue to be critical for use in various technologies, including the 5G cellular and wireless technologies; that cesium will continue to be a critical mineral and considered as matter of national security for Western countries; that Power Metals Corp. (the "Company") and its investors will be in control of the only cesium mine that China does not own; that the Company's properties will be able to commercially produce cesium, lithium, tantalum and/or other critical minerals; that the Company will be able to finance and operationally establish mines on its properties to viably and commercially extract the critical minerals; that Australian shareholders and investors in the Company will provide development and other expertise to assist the Company; that Winsome Resources will continue to own a significant stake in the Company; that the Company's property will one day have one of the only potential mines in the world that is producing cesium; that the Company can finance ongoing operations and development; that the Company can achieve its business plans and objectives as anticipated. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include the development of alternative technologies that do not require the use of minerals and resources currently considered as critical; that other resources are utilized in future in favour of rare earth metals such as cesium; that alternative technologies utilize other resources or that cesium, lithium, and tantalum are not utilized; that other companies discover resources of cesium and other battery metals that are more favorable or more easily developed into commercial production that the Company's property; that the Company's properties are unable to produce commercial amounts of cesium, lithium, tantalum or other critical metals; that the Company will be unable to finance or operationally establish mines on its properties for commercial extraction of any critical minerals; that the Company's Australian investors will not be able to provide development and other expertise to meaningful assist the Company; that Winsome Resources may for various reasons divest its stake in the Company in future; that the Company's properties may fail to develop mines producing cesium; that the Company may be unable to finance its ongoing operations and development; that the business of the Company may be unsuccessful for various reasons. The forward-looking information contained herein is given as of the date hereof and we assume no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.

DISCLAIMERS

This communication is for entertainment purposes only. Never invest purely based on our communication. We have not been compensated by Power Metals Corp. for this article but may in the future be compensated to conduct investor awareness advertising and marketing for Power Metals Corp. The information in our communications and on our website has not been independently verified and is not guaranteed to be correct. The content of this article is based solely on our opinions which are based on very limited analysis and we are not professional analysts or advisors.

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