What if you could buy the stock that Steve Jobs' mentor will use to change the way EV battery metals are valued before it became big?
What if there was a way to hold Tesla's (TSLA) claims of producing green vehicles to account?
This is what ESG (Environmental, Social and Governance) investing is all about. Robert Friedland, Steve Jobs' mentor in school and billionaire mining magnate, is trying to bring ESG investing to electric vehicle battery metals and mining at large and will leverage the technology and platforms of Abaxx Technologies to do so.
Abaxx Technologies is in the process of doing a reverse takeover of New Millennium Iron (OTCPK:NWLNF) (NML.TO). I have written extensively about this story here and here and you should read both of those pieces as primers as well as consult SEDAR documents on the deal. But the more articles I read about this deal, the more I connect the dots on what is going to happen here. And I am extremely excited over the near-term prospects of this investment.
I strongly believe that Abaxx is going to be the story stock of 2021. This is bigger than the individual stock. It looks like it's going be used as a tool to revolutionize the way battery metals are traded. It's under-the-radar now because the reverse takeover hasn't occurred yet, but should be completed in the coming days. It's dependant on the timing of the NEO Exchange's approval of the deal. I have heard December 15th from reliable sources, but that is subject to change. Once Abaxx is listed, I think it will be promoted to the moon.
Read some key excerpts from the latest article touting Friedland's plan to add ESG pricing into battery metals:
Friedland is promoting a bold green accountability agenda which has the potential to change not only the mining industry, but also almost every conceivable consumer product that we can touch. He describes his vision for the future of mining in a captivating hour-plus interview in the inaugural episode of Erik Townsend's Smarter Markets podcast. Essentially, he sees a future where every mineral mined can be graded by how much greenhouse gas was emitted during production along with other factors such as social responsibility to the local community.
What makes this vision so compelling is the global commodities exchange vehicle that he is promoting to help make it happen. The Abaxx Commodity Exchange [ACX] is developing new global energy and metals ESG benchmark contracts that will allow commodities such as nickel to trade at different grades based on its ESG ranking. The theory is that a pound of nickel produced with net-zero emissions should be more valuable than a pound of nickel that is a net emitter of greenhouse gases.
If Friedland's vision starts to unfold, EV carmakers like Tesla will not be able to simply claim they make clean energy vehicles. They will also have to prove it with their ESG grades. Meanwhile, the implications for mining are enormous. Feasibility studies will need to give significant attention to ESG scenarios for mining plans in terms of how they would likely impact assumed commodity prices. Indeed, one could even make the case that there will be different gold prices, such as ESG gold and legacy gold.
This gets to the core of the issue. Environmentalists hate oil and fantasize about a world with 100% green energy vehicles. But they also hate the mining industry. That's evident by the heat Tesla has taken over its use of cobalt originating from areas that don't have very good environmental or human rights records. How do environmentalists and other progressives reconcile the disconnect between electric vehicles and the need to mine the inputs? Through ESG mining.
The beauty of the Abaxx Exchange business model is its simplicity to understand, even if the technology backing it can get a bit complex. Create a liquid market for battery metals that are mined in an environmentally and human rights friendly way. Instead of how it is today where the manufacturers just pick up the input metals from wherever they can find them, regardless of social impact. Politicians and progressives espouse the why part of electric vehicles. Abaxx is going to work on the how.
So what's going to happen with Abaxx and why do I think it's due for a massive run beyond what it has already done?
I have been talking about Abaxx for a few weeks, and NML has already doubled from my entry point. But I think this is just the beginning. Based on my years of experience in the small cap investing world, this is what I think will happen with Abaxx. I can't guarantee anything, but this is my educated guess. And as we get a day closer to the transaction being complete and my NML shares get exchanged at a 1-for-12 ratio for ABXX ones, I get more excited.
A lot of people reading this might have made a ton of money on story or momentum stocks. CloudMD Software & Services Inc. (OTCPK:DOCRF) (DOC.V), The Very Good Food Company Inc. (OTCQB:VRYYF) (VERY.C), Loop Insights Inc. (OTCQB:RACMF) (MTRX.V), Empower Clinics Inc. (OTCPK:EPWCF) (CBDT.C) and even my precious Peak Fintech Group Inc. (OTCQX:OTCQX:PKKFF) (PKK.C), just to name a few. All of those stocks have various levels of promotion and people with money behind them helping to get the story popular with the small cap investing crowd. However, what they DON'T have is a long list of billionaire miners not just promoting the stock for the sole purpose of making money on the stock, but using the stock as a way to entirely disrupt a new industry.
I'll explain what I mean. Making money on VERY or MTRX or PKK is making money on VERY or MTRX or PKK. There is no other additional purpose for investing in these companies other than to make money through capital gains and eventually dividends on these particular investments as they develop their business. Making money on Abaxx is not just about making money on Abaxx. It's about completely changing the way miners get paid for the stuff they dig out of the ground. This is a very, very important point to understand for what I'm about to say next.
After the RTO transaction is complete, Abaxx will have 63,124,464 shares outstanding. 51,411,605 shares will be from Abaxx private equity holders while only 11,712,859 shares will be in the hands of existing NML shareholders and the broker that put the deal together. Abaxx shareholders could technically sell any stock that has no lock period. But knowing the overall goal of promoting ESG investing in mining, why would they do this? The investors behind it like Friedland, Lukas Lundin, Frank Holmes, Erik Townsend, Peter Schiff and Kyle Bass aren't poor. They don't NEED this cash. What they want is to change the way mining is valued.
These people are not motivated by having or taking profits on Abaxx. They are motivated by disrupting the mining industry as we head into the battery metal super cycle. Dumping tons of Abaxx shares so that the stock price tanks hurts this cause. Conversely, pushing the stock price so Abaxx's valuation goes through the roof helps the cause by giving the investment perceived credibility in the eyes of the market. What do you think is going to get more mainstream attention from BNN, CNBC, CBC, CNN etc.? A stock that is floundering at a $300 million valuation? Or one of the hottest stocks on the market that has grown to $1 billion, $2 billion, $3 billion and so on valuation?
You might think "well, easier said than done". Yes, but not really. Abaxx may have 63 million shares outstanding. But if, say, 45 million of those shares are held by Abaxx seed investor lifers and AREN'T for sale under any circumstance, it wouldn't actually be that hard to push the stock price to $10, $20 or more by buying up some of the remaining 15-20 million shares in the float. $30 million could buy 3 million shares at an average price of $10. That would then likely be enough to carry Abaxx to a billion dollar valuation around $16 on momentum and FOMO traders. These investors backing Abaxx definitely have the wallet to be able to do that. Do they have the motivation to do it? I think they do. It's up to readers to assess if they agree with me or not.
Think about the stocks that have been hot, particularly after the U.S. election. Electric vehicle stories have been the rave. So have vegan stories. Basically left-wing causes that are confined within the North American capitalist and entrepreneurial structure. While the electric vehicle and battery metal spaces are not new, the idea of ESG investing in mining is in its infant stages. Abaxx is a new spin on this popular EV story. Don't you think that Millennial Robinhood investors are going to LOVE this story once they hear about it? Even though I have talked at length about this story, it's not mainstream. Look how little chatter it's generating on social media and stock message boards. It's nowhere near the promotional potential that it could be in just a few weeks.
Abaxx is under-the-radar right now, and people like Friedland have been working to keep it fairly under-the-radar, mentioning it only in passing as part of the larger ESG initiative. But if you read and listen to what they say, you know that Abaxx is a key component to their cause. They are only quiet on Abaxx because it's not officially trading yet. Why promote a stock called Abaxx that currently only sort of exists on the public markets as an iron ore company? That just creates confusion. Once the NML RTO is complete and Abaxx is listed with its ABXX symbol, I believe that these rich mining investors are going to promote the hell out of the stock. CEO Josh Crumb will likely have some news flow lined up which will only add to the momentum and attention as the FOMO chasers and bandwagon jumpers hop on.
I have gone in HARD with Abaxx, both in terms of my money and my reputation. I believe it will pay off. It's up to every individual reader to agree with me or not. But in a world where a vegan science meat company with a little more than $1 million a quarter in revenues can approach a billion dollar market cap, don't you think a company that is a key tool in transforming the way battery metals are mined and valued can do that same? Just like how everyone is yapping to "buy and hold" VERY at these ridiculously high prices after a major run, they could be doing the same on Abaxx next month. Buy low, sell high.
Disclosure: I am/we are long NWLNF, PKKFF.
Additional disclosure: I may hold positions in securities as disclosed in this article and may make purchases or sales of these securities at any time. I have not received any compensation for this article and all opinions reflected herein are my own. The information provided herein is strictly for informational purposes only and should not be construed as a recommendation to buy or sell, or as a solicitation of an offer to buy or sell any securities. There is no guarantee that any estimate, forecast or forward looking statement presented herein will materialize and actual results may vary. Investors are encouraged to do their own research and due diligence before making any investment decision with respect to any securities discussed herein, including, but not limited to, the suitability of any transaction to their risk tolerance and investment objectives.