If you’re not big on mining and resource exploration as an investment opportunity, I get it. I really do. The resource crowd can be very inside baseball and a little old school, which is weird when you consider that nearly every video game that’s been a success in the last 20 years has some sort of mining/resource exploration aspect to it.
FallOut involves acquiring resources. So too does Terraria, No Man’s Sky, Runescape, Stardew Valley, Deep Rock Galactic, Forager, and lest we forget the second biggest seller of all time, Minecraft.
Mining is for the kids, but few companies understand that and project themselves accordingly.
Lancaster Resources (LCR.C) is giving the work of changing that perception a shot.
For LCR has set a task to not just find lithium out there in the big bad world, but to get at it in a carbon neutral manner, which would be a first for mining explorers.
From my opening article about Lancaster a month back:
Okay, let’s be clear, every mining play has an ESG plan these days, whether they’re for show or realsies. But I’m not sure I know of another group that has determined that they can, by virtue of where their project is, pull down all the energy they need to produce lithium via investments in solar, wind, and geothermal. In effect, they want to be a carbon neutral – or better – lithium producer.
Now if I’m playing the odds of people who read news stories about resource companies, I’d guess you might be sitting there thinking, “I couldn’t care less whether they’re carbon neutral or blowing up neutron bombs, will it be profitable?”
Two things; 1) Yeah, pulling energy from the sky is far more profitable than building high tensile energy lines across hundreds of miles of landscape and paying a monthly utility bill to whatever utility company is nearest to them. 2) I give a shit about ESG.
Me. I do. My kids do. The people in my life I talk to regularly about stocks and investing, they’re not wandering about investor conferences using walking frames. They played Minecraft growing up. They were raised in a world where half their friends were buying NFTs and crypto, and have since moved on to equities and options contracts.
The world is fucking on fire, man. The Mediterranean is burning like a California back 40. Australia is baked clay. Canada has over a thousand fires right now, so much so that Minnesota has a city in the top ten worldwide for the worst air quality. The UK: drought. Most of the US, under heat advisories. Iran had an average temperature of 60 desgrees CELSIUS last week.
So, I dunno, maybe a lithium mine option to set up a renewable solar farm instead of buying hydro is a good move? And maybe if one company can do it, make a little money doing so, and show that its possible, this will become the norm?
Hey man Lancaster Resources isn’t going to save the planet with its solar array, but it sure won’t hurt, and it’ll bring with it a new breed of investor who might be more down for the resource journey.
IN ADDITION: LANCASTER IS BUILDING ITS ASSET BASE
LCR is planning to buy the Trans-Taiga project in Quebec’s James Bay area, which is close to several other mining sites where lithium, obviously used in electric vehicle batteries and renewable energy technology, is being extracted already. Quebec loves mining, so this makes for a potentially sweet union.
Here are some key points about this deal:
- The Trans-Taiga Lithium Project: The project covers over 1,400 hectares of land. It is near Patriot Battery Metals’ Corvette Project, Winsome Resources’ Cancet Project, and Loyal Lithium’s Brisk Lithium Project. All these places are known for their lithium deposits.
- Quebec’s Lithium District: Quebec is quickly becoming a big player in Canada’s lithium mining sector. It’s home to ten major projects and several early-stage ones. One of them, the Whabouchi mine, is one of the largest lithium deposits in the world.
- Geology: The area where Trans-Taiga is located contains pegmatites, a type of rock known for holding lithium. These rocks are filled with minerals like garnet, muscovite, and tourmaline but, notably, don’t require huge brines to get at the lithium, like they do in other places where water is in short supply.
- Acquisition Strategy: By buying this project, Lancaster is expanding its exploration from the Alkali Flat Project in New Mexico to Quebec’s James Bay region. This gives the company a more diverse portfolio and a chance to explore different types of lithium resources.
- Future Plans: Lancaster is set to begin an exploration campaign to find lithium-rich areas, create detailed geological maps, and test the lithium content in the rocks.
- Access: The project is easily accessible year-round via the Trans-Taiga Road, and is close to hydroelectric transmission lines which, as mentioned, maybe they won’t even need.
- Acquisition Cost: Lancaster has the option to fully own the project by paying $115,000 over the next three years. Payments can be made in cash or through shares of Lancaster’s stock. They will also have to pay a 2% royalty, half of which can be bought back for $1,000,000. Additional payments will be required if certain exploration milestones are achieved.
- Impact Consideration: Lancaster is mindful of the environmental, social, and economic impacts of its activities in the area and plans to conduct its exploration with these considerations in mind.
Lancaster’s move into Quebec signals the growing importance of lithium as a critical mineral for electric vehicle batteries and renewable energy, key components in the global shift towards decarbonization. They also demonstrate that, though internet trolls have been doing their best to tag this as a non-serious lithium explorer, that tag is going to be harder and harder to lay as the company continues to build.
— Chris Parry
FULL DISCLOSURE: Lancaster Resources is an Equity.Guru marketing client
Leave a Reply