On September 14th 2020, I heard of Neo Lithium for the first time and why on that day in particular, well its because CATL took interest in Neo Lithium and in the 3Q project.
I immediately placed some money in Neo Lithium (NLC) but you can find them on the (NTTHF) on either Canadian or American exchanges respectively.
I knew something was going to happen just because CATL was involved as what happened to Lithium America after Gangfeng got involved in LAC and now the stock is at $19.42 from a high of $22.47 a few days ago, naturally this can be your standard pump and dump by retail investors until the mine starts producing and at the moment Neo Lithium according to simply Wall Street is undervalued even Yahoo finance puts its low as of today at $2 its average at $2.48 and its high at $3.35 and rates it a 1.5 – between strong buy and buy; Neo Lithium is profitable, cash rich and has zero debt and remarkably have never had debt (indicating strong Management skills), marketBeat puts the price target at $2.75…so to continue the thought, LAC are now overvalued, with retail investors looking to make a buck, Neo being in such a strong financial position as well as a lithium stock and undervalued; its just a matter of time the retail investors pump this stock to new heights to eventually come back down until the Neo mine is upon and running.
Well looking at that scenario and looking at CATL as the important player in Neo Lithium and CATL being the number one world wide industry leader in EV batteries and Battery Storage and knowing that even Tesla went and joined CATL to create Lithium-ion batteries Tesla vehicles a few months back and knowing that there isn’t enough Lithium produced on the planet today to even support Tesla future production, forget about the auto industry production but that of Tesla alone and lets not forget that this is not a Covid-19 doing, nor is this a dot (.) com bubble….No….this is the future of not only the auto industry but of the change of direction of energy in general to save the planet from overheating and destroying all that lives.
Not only will the vehicle industry see the extinction of fossil fuels by 2050 as a major world report states but it’s the complete change in world perception as to climate change and its contributions and its solutions.
Theres the auto industry, the boat industry, the cruise line industry, the aviation industry, the recreational vehicle industry including motor bikes and lets not forget the home energy storage, our cell phones, tablets and computers as well as construction vehicles and construction sites and the upcoming technologies such as Fusion energy, if you look at the company General Fusion they even need Lithium….
So, that being said, I repeated to myself, CATL…They are huge, why did they choose Neo Lithium…well the answer came way of intense research readily available to anyone willing to put in the time; as for myself, that was three (3) days worth of sitting in front of my PC, tablet or cellphone depending where I was…hardly any sleep just digging and digging….
What I found was a talented Neo Lithium staff and high quality lithium in the Argentina Lithium Triangle which holds more than 75% of the worlds much needed supply and the ability financials and ability construction wise to obtain it, in an eco friendly manner.
Neo Lithium started in 2015 and today is profitable…imagine that!
Its insane to see quality management the likes of those that worked on BHP. Lithium America, Barrick to name a few on Neo Lithiums roster, then you have a rock solid balance sheet with no debt; Neo could do the feasibility study on their own and maintain operations for over 18 months worth of cash on their own before CATL, but here jumps in CATL and that deal just adds to the already rock solid balance sheet of over 37 million in net cash.
Lets not forget the relationship with the Argentinian government, they have secured a 30 year fiscal stability agreement and tax benefits amongst other things, Neo Lithium was given 610 hectares of land to build the industrial park in 2019 and 349n hectares of land to build the lithium carbonate plant, they will use solar power to satisfy electricity requirements, they have hired locals and they represent over 70% of the workforce, they have experienced personnel but they have also opened up educational programs to increase their workforce by educating the locals as well as other educational programs to further the populations knowledge in other areas, they have built a well for the industrial park as well as one for their site and have their pilot plant up and running producing 3 to 4% quality lithium until full production.
Neo Lithium is also going to mine in an ecological friendly way which is what everyone is looking for in the mining industry looking forward and if you go to Neo lithiums website they explain exactly how they plan to achieve this.
At the moment Neo Lithium is in its Definitive feasibility study in order to get a final version as of what it will cost to start building the mine but in an interview with Carlos Vicens recently, he goes on to state that because of covid hampering international travel as well as local travel, they may start construction of the plant as the feasibility study hasn’t even ended as well as the financing and therefore the mine can be up and running soon enough.
So what do we have here as a logical onlooker: We got CATL on board and its 8% equity stake and its allowed to retain that 8%, they will have a board member and one assigned to the feasibility study, this will establish the financing needed and complete project cost but as Carlos Vicens (chief financial officer) CFO has stated they may may financing and even have construction started even before because of how Covid-19 is affecting travelling and that business aspect.
In his interview Carlos Vicens has stated that there is absolutely not enough Lithium even for Tesla and that 9 to 10 times todays amount will be needed in the very near future from this date onwards to 2024, imagine the amounts needed after 2024 onwards.
I could go on all day about Neo Lithium because its an exciting stock with battery grade lithium of 99.6% and a low CAPEX of $318.9 million and being on the lower end of the operational cost curve, can produce 20 000 metric tonnes of lithium per annum and can increase that to 40 000 metric tonnes with a mine plant life of over 35 years is incredible, they have a high solar to pond ratio being at elevated sea levels in the Lithium triangle known for its quality lithium…Neo Lithium isn’t a new company in terms of the people onboard and according to Fintel; the short interest from 2019-10-15 of 910 019 thousand to 2020-09-15 of 5876 thousand proves the importance and the players behind this project.
Then I decided to look at the Institutional buyers owning 18.8% and I came across CEO Waldo Perez buying up 168 thousand shares and Blackrock being an investor with 12.9% and LIT an ETF, Mackenzie financial corp, commodity capital AG, Ig investment management, Nineport partners LP, KBC asset Management, Orn & CIE, AlphaNorth Asset Management, BBVA Asset Management, JNL series true (fund), LIT- Global X lithium battery tech ETF, to name a few as these players were located using Simply Wall Street and Fintel…what I liked finding is how Blackrock took place in the company right after CATL became involved as the filing date suggests Blackrock was 2020-09-28, fourteen (14) days after CATL’s 8% stake in Neo.
When looking at a company its important to look at everything including the management and forward strategic manoeuvres of a company, the fact they will construct the project in parallel is intelligent thinking as they will not lose any time and with CATL needing Lithium desperately in the coming years to supply their own local ambitions, Neo Lithium can’t start producing soon enough and I’m a believer!
A lot of the information obtained was through SEDAR, every news article from 2016 was viewed as well as MD&A (Management Discussions & Analysis) and video’s posted by corporate personnel on YouTube.
Analysis was taking from Simply Wall Street Market beat, yahoo finance and Fintel.
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