Cypress Development - 13 good reasons for our top pick from the lithium sector 25.03.2021 - Dear readers, | | | | | | WKN | A14L95 | ISIN | CA2327492005 | SYMBOL | C1Z1 | COURSE | CAD 1.18 | COURSE OBJECTIVE | CAD 7.20 | MISCELLANEOUS | | World-class lithium project practically on Tesla's doorstep | | Recently, following the announcement of the acquisition of an early stage lithium project, the price of an exploration company exploded within a few hours with a high trading volume on Tradegate from EUR 0.07 to EUR 0.4699.Although this company has absolutely nothing to offer in our eyes, it is very clear that lithium is high on the shopping list of investors. Do you want to increase your stakes sixfold with a high quality lithium company within 12-18 months? Then Cypress Development Corp. (WKN: A14L95) in your depot, because the current market value of our top pick is only 113.0 million USD. In comparison, the after-tax net present value of the Cypress project, based on an exchange rate of USD 12,000 per ton of lithium carbonate, is over USD 1.6 billion. This undervaluation is striking. But let's first take a look at the market situation. The automotive supplier ZF sees the share of electrified drives in the new car market at 51 percent in 2030. In the following years, the electric drive will increasingly displace the combustion engine. In 2040, its market share is expected to be 93 percent worldwide and 100 percent in 2050 ( source: www.wiwo.de/technologie/mobilitaet/e-mobility/zf-prognose-e-antrieb-ab-2030-weltweit-nummer-eins - / 27019092.html ). Battery cell plants with a capacity of more than 2,000 gigawatt hours have been announced for 2030. Batteries make up about 30 percent of the cost of an electric car. While BMW and VW are aiming for an electric share of 50 percent and 70 percent respectively, Jaguar and Ford will only have electric vehicles in Europe. California, the largest US vehicle market, plans to completely ban fossil fuel engines by 2035. Source: www.mining.com Wolfgang Bernhart, electromobility expert at the management consultancy Roland Berger, rightly wonders where the lithium for all these battery cells should come from. You can read his interesting statements in the following interview:www.manager-magazin.de/unternehmen/
autoindustrie / elektroauto-bei-batteries-und-raw materials-threats-bottlenecks-recycling-will-not-be-enough-a-56a6c93a-2e9e- 4db0-9a11-7e968473ce55 . The new US President Biden wants to both promote the electrification of vehicles and reduce the country's dependence on China for rare earths, lithium and other raw materials used to manufacture batteries for electric vehicles (EVs). The USA is the second largest market for electric vehicles after China. Hundreds of billions of dollars are flowing into the electrification of their fleets at the automobile companies - but their investors want security that there will be no supply bottlenecks with raw materials. So it's no wonder that automakers, automotive suppliers and battery manufacturers want to secure supply agreements directly with prospective lithium producers. The best example: Piedmont Lithium shares exploded 90 percent after a deal with Tesla. As the market for electric vehicles continues to grow, prices for related raw materials such as: B. Lithium. The Biden administration plans to electrify the entire US government fleet - approximately 640,000 vehicles. That plan alone could require a 12-fold increase in US lithium production by 2030. This in turn is fueling speculation about mergers and acquisitions in the lithium sector. Lithium producer Albemarle topped up its war chest in early February 2021 and raised a whopping $ 1.5 billion. This is exactly where our top pick comes in. 13 good reasons for Cypress Development - Cypress holds 100 percent of a well-advanced lithium exploration project in Clayton Valley (Nevada, USA) with an after-tax net present value of USD 1.05 billion based on a price of USD 9,500 per ton of lithium carbonate (according to a preliminary initial assessment ( PEA) in May 2020).
- As a budding lithium producer, Cypress is extremely undervalued compared to its peer group and is trading at a discount of 85 percent, as you can see impressively at Epstein Research:
www.epsteinresearch.com/about - Cypress has demonstrated a large and near-surface occurrence of lithium-containing clay rock and a very favorable waste-to-clay-overburden ratio. The mine life is over 40 years.
- A further increase in the total measured and indicated resource estimate to 5.2 million tons of lithium carbonate equivalent was reported in August 2020.
- An environmentally friendly and successfully tested extraction method without the use of sulfuric acid should further reduce the already low production costs.Incidentally, Tesla also favors this extraction method:
www.jadecove.com/research/teslasaltclay - The Cypress Project is adjacent to the Silver Peak lithium brine mine owned by the major lithium producer Albemarle ($ 17.1 billion market value).
- A Tesla gigafactory - Giga Nevada - is located near Reno and therefore close to the Cypress project.
- The lithium price has climbed to USD 12,880 in the past few weeks, which significantly increases the fair value of the Cypress project compared to the PEA results.
- According to the Fraser Institute, Nevada was the top international region for mining investments in 2020. In addition, this US state has numerous operating mines, good infrastructure, electricity, and experienced exploration and support services.
- Institutional investors joined the recently completed $ 20 million financing round for the first time. This means that Cypress has more than enough money to independently carry out all steps up to the production decision. This includes building a pilot plant, another drilling program, securing water rights and completing an economic feasibility study.
- The results of the pilot extraction plant should arouse the attention of potential buyers and could soon lead to an off-take agreement.
- Commercial lithium production is scheduled to start in 2024.
- There is a takeover fantasy, as the neighboring lithium group Albemarle is unlikely to have any interest in competition in its front yard. This is also supported by the fact that Albemarle will now begin exploring clay rock containing lithium and will evaluate technologies that could accelerate the profitability of lithium production from clay resources in the region.
Based on a price of USD 12,000 per ton of lithium carbonate, the After-Tax Net Present Value of the Cypress project rises to over USD 1.6 billion and thus rises to second place in the following ranking $ 113.0 million. Source: www.batteryjuniors.com/project-comparison CONCLUSION: Taking into account around 120.4 million shares outstanding, the market value of Cypress Development Corp.(WKN: A14L95) currently at around CAD 142.1 million. The good reasons why Cypress Development is our top pick in the lithium sector have been detailed above. We speculate that Cypress will be acquired before production starts. Neighbor Albemarle could put cash, stocks, or a mixture of both on Cypress's table to get that sting out of his own flesh. There's not much to add to that, other than that Cypress also found rare earths on their project that can also be extracted!Cypress is set to become the most environmentally friendly lithium mine with the lowest carbon footprint in the United States - that's exactly what Elon Musk at Tesla is looking for. The very experienced Cypress CEO, Dr. Bill Willoughby explains the most important things about the Clayton Valley Lithium Project in Nevada in the following video. Source: www.youtube.com/watch?v=AKLIBYXklKY We see the target price on the Cypress Development Corpstock . (WKN: A14L95) over 12-18 months at CAD 7.20. Based on the fully diluted number of shares, this equates to a valuation of $ 1.06 billion or $ 840.0 million. We expect a strong and continuous news flow in the coming weeks and months. Cypress Development shares can be traded cheaply on Tradegate or directly in Canada. Please always limit your purchase orders. Sincerely,
Your PROFITEER editorial team Image sources: www.cypressdevelopmentcorp.com ,
www.mining.com ,
www.epsteinresearch.com/about ,
www.batteryjuniors.com/project-comparison ,
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