What’s Happening Up North? Our Canadian Lithium Market Update

About two weeks ago, CATL (the largest battery maker in China) purchased a very large stake (36.6M shares) in North American Lithium (NAL) making it a controlling stakeholder (over 90%).  We first heard about this investment when we had attended the PDAC conference in Toronto two weeks ago. It was already big news then and it’s been discussed in greater detail since the Financial Times covered the story two days ago (March 12th).  

We recently wrote about North American Lithium (NAL) in our all encompassing junior miners post.  The project, as already covered, is one with a long history. Many millions have already been invested for what was once stated as the “next lithium producer in North America.”  This project though has been hit with what seems like problem after problem and still is not yet producing. It’ll be interesting to see what happens moving forward now that CATL is essentially running the operations (since they’re a 90%+ Shareholder).  Yet, NAL hasn’t updated their website since October 2017. Until the company can update its website successfully, we’re skeptical that they’ll be the next North American lithium producer.

Interestingly and relating to CATL’s investment, many other lithium followers are wondering if this will open the investment floodgates into Canadian based projects?  

Jourdan Resources, who deserves credit in being one of the first to announce the CATL deal back on March 4th, is stating that this is good news for their project.  You see, their project is in close proximity (on the border) with NAL’s project. As a result, their belief is that CATL’s investment could attract greater attention to their project. No doubt, their belief could be true.  That being said, we would also recommend caution about directly investing in a project only due to CATL’s investment next door. One investment next door doesn’t mean value’s increased substantially and suddenly for Jourdan Resources.  

Nemaska:  Of greater question in our mind is will Nemaska finally get their financing secured?  Time is ticking for the management team there as they had stated several weeks ago that “financing would be secured by the end of Q1.”  YTD, the stock is down 45% due to financing concerns since the company came out with a revised PFS stating ~$600 Million (USD) would need to be raised.  The project and grade are great but without capital, it will not proceed. This is a story which we are watching closely and are quite interested to see what happens from here.  

As always, we’ll be keeping you posted as it happens. So stay tuned via email or twitter to get the latest developments as they hit the tape!  

 

Disclaimer:  We own shares in Nemaska Lithium.