Never before has the risk-reward thesis for critical minerals been more tantalizing.
Rare earth metals have been one of the best hiding places for investors amid a steep market sell-off prompted by fears of global recession, a raging Russian war in Ukraine, a complex regime of sanctions and sky-high energy prices.
New clean energy technologies are going to divert trillions of dollars into exploration, producing and processing a list of critical minerals that are now paramount to national security.
It’s been a great year for metals such as lithium and tantalum, and it’s now shaping up to be an exciting year for the rarest of them all—Cesium, a mineral critical to advanced research and development and used in applications across multiple industries and manufacturing chains.
The past five years has seen lithium giant Albemarle (NYSE:ALB) jump over 102%, and 50% in the last six months alone.
Another giant, SQM (NYSE:SQM), is up over 90% YTD, and over 35% in the past six months.
Lithium Americas Corp (NYSE:LAC) stock has surged over 221% in the past five years.
Lithium prices have broken all kinds of records this year, driven by soaring global demand. In China, a tonne of lithium carbonate is trading for $75,000 right now—a 13X increase in only two years.
Rare Earth stocks are hotter than ever and have the potential to get even hotter following the White House’s recent announcement of $3 billion in federal funds to boost domestic EV battery output and the minerals that make it happen.
Tantalum, too, is soaring, riding the lithium wave as another important component of the lithium-ion battery. Where lithium goes, tantalum follows. This is why the United States Department of the Interior included Cesium, Lithium and Tantalum on its list of Critical Metals.
Then we have Cesium, one of the rarest metals on Earth, and one of only two metals in the world that are liquid at room temperature (the other is mercury).
A variety of forms of Cesium are used in everything from oil and gas drilling, photoelectric cells, advanced optics and fuel cells to polymer solar cells, analytical chemistry and nuclear medicine. In the entire world, there are only three pegmatite mines that produce Cesium, advancing this rarity beyond the “critical”.
What we have here now is another rare occurrence: A small, undervalued company with all three of these critical minerals and a recent intercept of high-grade Cesium that significantly sweetens the lithium deal and advances de-risking of an exciting Canadian mining play.
Power Metals Corp (TSX.V:PWM) (OTCQB:PWRMF) is sitting on prime exploration territory for lithium and tantalum on its Case Lake property in NE Ontario, one of Canada’s largest mineral-producing provinces by value.
Proving Up Lithium With a Second Act in Cesium
Power Metals managed to attract top lithium institutional investors when they started out in 2018. That $5.45 million in initial raises helped fund some serious drilling to impressive results.
As far as lithium venues go, Case Lake has some significant advantages overall. It’s in the Abitibi Greenstone Belt—the gold-mine superstar. And it’s got the infrastructure to access it all with ease, including roads and rail, which translates into major cost savings and a huge logistics advantage.
In 2018 alone, Power Metals drilled over 13,000 meters, making significant high-grade lithium discoveries at Case Lake. But that wasn’t all it discovered …
It also made tantalum discoveries and … unexpectedly, rare cesium.
In June 2022, Power Metals started drilling again, fully funded and targeting up to 20,000 meters at West Joe Dyke to expand its earlier cesium discovery.
Phase One of the new drill program targeted 5,000 meters and did not disappoint. They intersected cesium mineralization enclosed in lithium and tantalum mineralization turning Case Lake definitively into a three-commodity venue.
They interested incredibly high-grade cesium: 24.07% Cs2O over 1.0 m and 7.65% Cs2O. They also intersected their highest-grade yet of lithium: 1.45% Li2O over 7.09 m, and 4.75% Li2O, 2.71% Cs2O and 396 ppm Ta over 2.0 m.
The newest cesium intersect has been described by Power Metals’ (TSX.V:PWM) (OTCQB:PWRMF) world-class geologist and VP of exploration, Dr. Julie Selway, as “the highest and most impressive Cesium assay” in any property she has studied in her career.
2022 Highlights Include
- 24.07 % Cs2O, 0.63 % Li2O, 34.2 ppm Ta over 1.0 m, 15.0 to 16.0 m, PWM-22-143
- 20.36 % Cs2O, 2.28 % Li2O, 15.7 ppm Ta over 1.0 m, 14.0 to 15.0 m, PWM-22-143
- 22.22 % Cs2O, 1.46 % Li2O, 25.1 ppm Ta over 2.00 m, 14.0 to 16.0 m, PWM-22-143
- 7.65 % Cs2O, 1.45 % Li2O, 247.1 ppm Ta over 7.09 m, 11.96 to 19.05 m, PWM-22-143
- 1.94 % Cs2O, 2.20 % Li2O, 466.0 ppm Ta over 8.98 m, 20.97 to 29.95 m, PWM-22-144
- 2.71 % Cs2O, 4.75 % Li2O, 396.0 ppm Ta over 2.00 m, 24.00 to 26.00 m, PWM-22-144
- 3.66 % Cs2O, 1.05 % Li2O, 1440.0 ppm Ta over 1.00 m, 48.00 to 49.00 m, PWM-22-147
The Key Differential
There are several things that differentiate Power Metals from any other hard-rock lithium company in a very crowded playing field right now.
The biggest differential is that it is sitting not only on lithium and tantalum, but on exceedingly rare cesium.
That cesium discovery was enough to land Power Metals a $1.5-million investment from the world leaders in cesium processing, Sinomine Resource Group, which had three years earlier acquired the Tanco mine in Manitoba for $300 million from Cabbot Corp. This gives Power Metals access to Tanco’s processing facility for all the cesium, lithium and tantalum extracted from Case Lake via direct rail line from Cochrane, ON to the facility.
The story gets more interesting…
Last week, on November 3rd, Power Metals was advised that the Canadian Federal Government has ordered that Sinomine divest itself of its past and ongoing investments in the Company. The order was made on national security grounds by virtue of the strategic importance of Power Metals’ Case Lake lithium, cesium and tantalum deposits and Sinomine’s alleged relationship with the Government of the People’s Republic of China. The Company is reviewing the matter with legal counsel, Sinomine and the federal authorities with a view to advancing development of the Case Lake Project by whatever means necessary.
Johnathan More, Chairman & CEO of Power Metals stated in the November 3rd, 2022 press release, “While we are surprised by Canada’s stance towards Chinese investment into Canada’s critical minerals industry, it clearly shows that they see the opportunity and assets of Power Metals as too valuable for such foreign investment. Power Metals (TSX.V:PWM) (OTCQB:PWRMF) has made a substantial discovery of cesium, lithium and tantalum and this political gamesmanship demonstrates the extreme value of Power Metals assets. Sinomine will respond to the Canadian government shortly as they look at the appeal process.”
Why did the cesium intersection bring an instant $1.5 million to Power Metals coffers?
Because, in the entire world, there are only three pegmatite mines that produce Cesium, which means that Power Metals could be sitting on what would only be the fourth mine in the world with the potential to produce cesium. And the U.S. states, which produces no cesium domestically, is 100% reliant on Canada for the rare metal.
If the Canadian government is successful in their efforts to remove Sinomine from their investment in Power Metals, the potential for a bidding war is extremely high. Power Metals now sits on a discovery of extremely rare and critical minerals that even the government has recognized as significant.
Cesium is one of only two metals in the world that are liquid at room temperature. The other is mercury. Because Cesium is easily oxidized, it is not found in nature in its elemental state, rather as Cesium oxide.
A variety of forms of Cesium are used in everything from oil and gas drilling, photoelectric cells, advanced optics and fuel cells to polymer solar cells, analytical chemistry and nuclear medicine.
In terms of volume, the primary use is definitely oil and gas production and exploration.
Cesium formate brines are used in oil and gas drilling, acting as a heavy mud for high pressure, high temperature offshore oil drilling operations to lubricate drill bits and prevent blowouts.
Cesium isotopes are used in atomic clocks for cell phone networks, the internet, Global Positioning Systems (GPS) and aircraft guidance systems. Cesium clocks are the most accurate known to man–accurate to about 1 second in 300 million years. These devices make use of transitions between the spin states of the cesium nucleus and produce a frequency which is so regular that it has been adopted for establishing the world’s time standard.
Cesium bromide is used in infrared detectors, optics, photoelectric cells, scintillation counters, and spectrophotometers. It’s also used in the glass for night vision goggles, and a million other advanced chemistry and technology applications.
The U.S. government’s 2022 list of critical minerals includes Cesium, which it describes as a key to advanced research and development.
While the 2018 cesium intersection put Power Metals on the radar and won it $1.5 million in investment, it’s most recent intersection in October is even more significant due to the high-grade results that go a long way to proving up the deposit and de-risking the play.
It’s difficult to find a company that’s small enough, undervalued enough and hitting on something incredibly rare. Those are three attributes that investors search for endlessly and rarely find.
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