VANADIUM – Crucial to the steel industry and growing in importance. The United States has deemed Vanadium a “critical mineral” as part of Trump’s mineral strategy listing 23 metals and minerals that are critical to the national economy and national security.
In China, vanadium-flow batteries are emerging as an alternative to lithium-ion. The government is promoting the technology, and among the projects under construction is a backup power facility in Dalian that will be twice the size of Tesla’s new plant in Australia. “I don’t think anyone would dispute that it’s superior to lithium-ion in large-scale grid applications”
Cornerstone Metals (CCC.V 29 cents / OTCQB:CCCCF)
Cornerstone has a very attractive share structure with only 21 million shares outstanding. The market cap near $6 million is very low for the size and quality of their Nevada Vanadium.
In September 2017 they acquired a very impressive Vanadium project near Carlin, Nevada. The deposit was discovered by Union Carbide in the 60’s and had 36,525 ft of drilling to define a very large, near surface vanadium resource. The company just completed in-fill drilling to validate those historic numbers and while assays are not back, a news release Feb 8th indicates they will validate them (based on visual core inspection).
The project has great access to infrastructure and a skilled mining workforce, but they are also located in the most “pro-mining” state – Nevada. They received a drill permit in record time and a very experienced management team had them drilling within days of receiving that permit. When you look at the bios of their management and board, these are all die-hard mining guys. Not stock promoters who went out looking for a vanadium project to promote, but veteran miners who went out looking to build a mine.
When Union Carbide discovered this property, it was likely for use in steel. But it was never developed because China had plenty of access to vanadium fifty years ago and prices were low. But in the past several years, vanadium prices have risen several hundred percent.
And while lithium and cobalt stocks have performed incredibly well – not just because prices have risen, but because speculators feel demand will be huge for the automotive (electric car) industry.
What the broad investment community seems to have missed, is the significant growth potential (demand) for vanadium. Not only is it critical in high quality steel (which China is finally realizing they need to produce), but on an industrial scale, vanadium batteries appear to be the ONLY economic solution for wind and solar power – the Cornerstone presentation (link below) explains this well, and also view the Bloomberg link below.
The market is not going to recognize the value / potential of CCC overnight. But if demand continues to grow for vanadium (as I believe it will), this could prove to be a VERY valuable long term investment. The main producers of vanadium are China, South Africa, and Russia. There are NO American producers… and Cornerstone appears to own the largest (potentially economic) deposit in the United States.
If someone like Elon Musk (Tesla) wants to expand industrial scale battery manufacturing, he may want to secure a Vanadium deposit on American soil.
Also of particular importance – recently the Chinese government (Standardization Administration of the People’s Republic of China) released new high strength rebar standards “intended to reduce the use of substandard steel and make buildings in China more earthquake resistant”.
China in 2017 was already cracking down on substandard steel (for export and local consumption) but this is a big deal for vanadium as it now means a lot more vanadium must go into all rebar if buildings are going to pass code. This goes into effect Nov 1/18.
When combined with Vanadium batteries, the future of vanadium looks very promising and CCC appears extremely undervalued in light of this growth.
The management team clearly have extensive mining experience and the deposit appears to speak for itself. When combined with industry fundamentals, this appears to be extremely strong value in the 30 cent range.
Very Insightful Article on Battery Demand / Economics and Vanadium
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