Lithium is one of metals at the forefront of the Electric Vehicle revolution and is set to experience booming demand in the coming years. With Lithium prices soaring alongside metals such as Nickel, positioning in lithium shares will provide exposure to increasing adoption of EVs.
According to the International Energy Agency, 8.9kg of Lithium is required in the manufacturer of the average Electric Vehicle. The increased Lithium demand is integral to forecasts by S&P Global Market Intelligence that point to a 5,000 mt deficit in Lithium production in 2022.
This deficit is set to support Lithium prices through 2022 and beyond, presenting a significant opportunity for Lithium shares involved in the exploration and production of the metal.
Rio Tinto
Despite the recent set back of having their mining license revoked by the Serbian government in the wake of the Djokovic Visa debacle, Rio Tinto have not yet said Jadar Lithium project is dead.
If Jadar was to come online in 2029 a previously planned, it would make Rio Tinto one of the world’s largest Lithium miners and would supply around a third of Europe’s demand for Lithium batteries.
Rio Tinto’s inclusion within this selection of Lithium shares may have a giant question market over it with the Serbian government’s decision. However, Rio Tinto’s dividend reliability and exposure to copper makes it a solid choice for more conservative investors seeking EV demand boom exposure.
Cadence Minerals
Cadence Minerals has built a portfolio of metals and mining assets with a significant exposure to Lithium. This includes the Cinovec Lithium mine operated by European Metal Holdings, the Sanora project operated by Bacanora Minerals, and a series of projects operated by Lithium Technologies & Lithium Supplies in Australia.
The Cinovec project in has just received ‘outstanding’ results that saw its output estimate rise from 25,267 tpa to 29,386 tpa. The improvement in output forecasts combined with an upgrade to the quality of the resources meant the NPV of the project increased from $1.108B to $1.938B.
#KDNC – European Metals #EMH @CzechLithium PFS Update:
— Cadence Minerals Plc (@CadenceMinerals) January 19, 2022
~Outstanding Results from Cinovec – NPV8 increases by 74.9% from $1.1bn to $1.938bn (#lithium hydroxide at $17k / tonne)
“adds substantial value to the already exceptional potential”https://t.co/7ilyBiWc7p pic.twitter.com/aK9Gf40Xt9
The Cinovec mine is operated by European Metal Holdings which has a 49% stake in the mine. Cadence Minerals holds 8.7% of the equity in European Metal Holdings.
Cadence’s investment in Lithium Technologies & Lithium Supplies in Australia is currently subject to an option granted to Castillo Copper who are undertaking studies of the projects with a view to acquire 100% of the assets.
Cadence Minerals currently has a market cap of £36m and was recently tipped by Justin Urquhart Stewart in Daily Mail.
Trident Royalties
Trident Royalties is a mining streaming and royalties company with a diversified portfolio of metals including gold, lithium, copper and iron ore.
Trident Royalties listed on the AIM in 2020 and set about the acquisition of a series of mining royalties that will provide Trident Royalties, and their shareholders, with a source of income long into the future.
After the initial outlay by Trident Royalties, mining royalties provide an attractive benefit of capturing the upside in the price of metals, or increased production, without the need for additional capex.
One of Trident’s most advanced royalties is the Thacker Pass Lithium which is one of the largest Lithium resources in North America.
Trident holds a 60% interest in a 1.75% gross royalty on the asset which is set to produce 80,000 tpa Li2CO3 in Phase 2 of the mine.
Although Trident’s Lithium exposure set within a highly diversified portfolio, the exposure to a range of metals spreads the risk in a fast growing royalties company, and makes Trident one of the most unique Lithium shares on London’s exchanges.
Kodal Minerals
Kodal Minerals operates in West Africa and are currently exploring a raft of gold projects, as well as the Bougouni Lithium Project in southern Mali which Kodal highlight as their primary focus.
The Bougouni Lithium Project is comprised of three prospects with a mineral resource breakdown of:
Sogola-Baoulé: 12.2Mt at 1.1% Li2O
Ngoualana: 5.1Mt at 1.2% Li2O
Boumou: 4Mt at 1.02% Li2O
Having conducted a feasibility study in Q1 2020, Kodal identified the potential for a mining operation with a minimum 8.5-year mine life and a payback period of 1.7 years, and an IRR of 58%.
Kodal have recently received a mining licence and are working towards a final investment decision for the development and construction at the mine.
The #KOD team have been spending the last few days of the successful site visit on the ground in the sun at Bougouni; including CEO, Bernard Aylward and the technical team who are discussing future plans for the lithium development project. #Mining #lithium pic.twitter.com/w91tHzcExe
— Kodal Minerals (@KodalMinerals) January 20, 2022
Given the strong move higher in Lithium prices, Kodal are reviewing their 2020 feasibility study which is eagerly awaited by the market.
One must not discount Kodal’s gold projects as they provide the necessary diversification to reduce the risk of highly protective miners.
Cornish Lithium
Not to be confused with Cornish Metals, Cornish Lithium is still privately held and is yet to IPO.
However, having conducted a number of funding rounds – including a £12m raise on Crowdcube – the company has a significant number of shareholders that would welcome a liquidity event such as an IPO or trade sale.
Cornish Lithium was the first company to identify a significant Lithium deposit in the UK and has formulated to extract the metal.
The company has a number projects focusing on geothermal and granite deposits in Cornwall and recently closed an investment package worth up to £18m in December.
One to watch for a listing in the future, if its not snapped up privately beforehand.
