The modern world runs increasingly on BATTERIES, from the high-end Tesla and Elon Musk’s solar house on down to everybody’s phone. Until recently, that was all about the lithium that carries the charge.
Lithium prices have DOUBLED since 2016 even though it’s actually one of the most common elements in the universe . . . people on Bloomberg are debating a “glut” on the horizon. Still, hoorah for the lithium bulls, right?
Not so fast! For one thing, 2016 is ancient history now. That entry has closed. You either picked your spots early or you missed that particular dance. But don’t cry . . . there’s a NEW battery metal on the horizon.
And if I tell you a little $0.40 stock called ZincX Resources Corp. (ZNX) could end up a key supplier of that metal, I bet you can connect the first few dots on your own. Yeah, it’s good old ZINC that has a shot at future glory, not to mention giving investors a jolt in the here and now.
Of course ZNX is early stages as its stock price suggests. But they have close to 800 square km to play with across northern British Columbia and early geological work on the first project on their plate indicated & inferred 5.3 BILLION pounds of zinc hidden in that dirt.
At recent prices that metal would earn approximately $7 billion on the open market. And those prices are actually on the depressed side right now, thanks to the trade war. Once global consumption ramps up again, the sky’s the limit on how much the treasure on ZNX property is worth.
But let’s back up to how green scientists are getting excited about zinc as the natural successor to today’s lithium batteries, the next generation of energy storage. Look for the buzz and it’s actually all over the place.
For some, the problem with lithium is cost and, ironically, weight. A prototype advanced zinc battery can run a hybrid car on under 22 kg or a full electric model like the Nissan Leaf at 65% the weight of lithium. Remember, lithium by itself is extremely light, so you’re also looking at a much smaller battery pack with zinc.
Zinc can run an electric bike. It can easily power laptops and phones. And here’s the kicker: zinc batteries don’t catch fire and they don’t require cobalt and other “conflict minerals” that are too much of a headache for Elon Musk, the reigning lithium king.
Elon has had to rip one cobalt supplier out of the Tesla food chain in just the last few months, thanks to sanctions. He’s still on a race against time: can he get enough cobalt to support the electric car boom long enough to switch power metals?
Meanwhile real long-term players like the U.S. Navy are falling in love with zinc, which is readily mined here in good old North America and only needs a little nickel or lead to carry its juice.
So let’s talk a little more about that property. One of the biggest undeveloped zinc-lead deposits left in Canada, with some silver veins running through the ore as a chaser.
It isn’t the absolute neck of nowhere. You can get there via Forest Service Road. Power, rail, water and even river barges to offload the metal are all nearby.
ZNX has been drilling to define the asset. They are up to a formal NI 43-101 stage. The most recent report is HERE, indicating 22 million tonnes of ore with 8.32% of it weighing in as zinc, 1.61% of it lead and 14 grams in every ton adding up to pure silver.
From that they can infer another 7 million tonnes, slightly lighter grades. And yes, in pure music to my ears, the ore body “remains open for expansion” if you dig deeper or drill around the known paydirt.
It shouldn’t be too shocking. This slice of B.C. is historically Big Zinc Country, but ZNX may have one of the biggest on record, a true billion-tonne behemoth. If anything, we’re close enough to the Yukon that it might resemble those types of strikes . . . look up Tom, Faro and Jason for details.
What will it take to start converting that rock into money? That’s for the future to resolve. ZNX has some heavy lifting to do . . . but with mine after mine after mine opening around the world lately it’s clear that the global mining elite suspect supply of zinc is going to lag far behind demand just like it did last year.
There aren’t even enough smelters to refine the ore the world needs. And in China, they’re reducing output to make sure everyone is good and hungry for the metal.
The gurus at Thomson Reuters are bullish. After all, they say, zinc ruled the metal roost last year and supply hasn’t really kept up. Industrial inventory of zinc has plunged. Some mines have actually run dry.
We could see $4000 a ton for players who can get to market in the next few years, which is a 50% premium to the numbers I was working up above. That’s right: take that $7 billion and add 50%.
In that scenario (over the next few years, they quote the fellow as saying), every stock with zinc-rich dirt should be in play. After all, the theoretical balance sheet swells. The ultimate revenue pool should do likewise. What’s not to like?
Meanwhile ZNX has big friends literally invested in its success. Teck is in the picture . . . I’d say “of course” but the giant doesn’t pick every junior with interesting acreage to be its partner.
China has a stake via Tongling Non-Ferrous Group, the refining company so big they either named a city after it or vice versa. And Korea wanted a piece too.
With friends like that, you don’t need to mortgage the store. ZNX claims no debt. Clean balance sheet with the ability to lever up if they need to prove up their asset in a hurry and build that mine.
One day we’ll read the headlines. And those who discovered the company “way back when” will face a harrowing choice…
Will they be cheering because they’ve made themselves partners in ZNX? Or will they grind their teeth and bang on the window to get in?
Don’t get locked out of the party. If you believe in electric cars and lithium no longer gives you the old boost, the odds are good that zinc will spark up the future.
