Last month, we commenced due diligence on Grid Battery Metals Inc. (TSXV: CELL, OTCQB: EVKRF/MCAP: $16M). Here is a brief overview of the company, along with our initial insights.
Grid is advancing three early-stage lithium projects in Nevada, and is currently in the process of spinning out its early-stage nickel project into a new publicly listed company. Investors will receive complimentary shares of the new company.
Nevada is one of the most attractive mining jurisdictions in the world. The state hosts Albemarle’s (NYSE: ALB) Silver Peak mine, and several advanced stage projects such as Lithium America’s (NYSE: LAC) Thacker Pass project, as well as projects held by Ioneer Ltd. (ASX: INR), American Lithium (TSXV: LI), Century Lithium (TSXV: LCE), and Noram Lithium (TSXV: NRM). Lithium clay projects in Nevada exhibit long mine lives, with attractive NPVs of US$1B+, and IRRs of 20%+.
The following section summaries CELL’s projects.
Texas Spring Lithium Project, Elko County, Nevada (100% interest)
This 400-hectare property is prospective for lithium clay deposits. This property is adjacent to Surge Battery Metals‘ (TSXV: NILI/MCAP: $107M) Nevada North lithium project, where drilling has intersected near-surface lithium-bearing clays, including bonanza grades of up to 8,070 ppm Li. Although Surge is in pre-resource stage, we are anticipating a maiden high-tonnage/high-grade resource estimate of 4.8 Mt lithium carbonate equivalent (LCE).
Grid Battery has completed a phase one exploration program, including geophysics and soil sampling. The geophysical survey revealed several horizons with potential for lithium-bearing clays, while the soil sampling program delineated two high-grade lithium zones, with grades of over 3,000 ppm Li. Management plans to utilize these results to identify preliminary drill targets.
Clayton Valley Lithium Project , Clayton Valley, Nevada (100% interest)
This 930-hectare property is prospective for both lithium brine, and clay deposits. The property borders Albemarle’s Silver Peak lithium project.
Volt Canyon Lithium Project, Monitor Valley, Nevada (100% interest)
This 650-hectare property is prospective for lithium clay deposits similar to the ones owned by the aforementioned juniors. CELL has completed a phase one exploration program (surface sampling, water sampling, and geophysics), and is awaiting results of a soil sampling program.
Management/board members own 1.75% of CELL’s outstanding shares. The CEO, Tim Fernback, has 30+ years of experience in financing public/private companies.
At the end of September 2023, CELL had $9M in working capital, reflecting 56% of CELL’s MCAP. In-the-money options/warrants have potential to bring in $6.22M.
As CELL’s projects are in pre-resource stages, we have compared CELL to other juniors in Nevada, based on their land packages. CELL is trading at $4k/ha vs the average of $13k/ha.
We intend to initiate coverage in the coming weeks.
*FRC provides issuer paid coverage.
*Past performance is not indicative of future results.