One look at the chart of the poster child for the lithium boom — Albemarle Corp. (ALB:NYSE) — and you are immediately hit with the specter of a popped bubble and if you then look at the poster child for hard-rock Canadian lithium miners in Patriot Battery Metals Inc. (PMET:CA), you can quickly ascertain the reason that my top resource pick — Volt Lithium Corp. (VLT:TSV;VLTLF:US) — has been struggling.
I can go down the list of the quality junior resource deals out there, but with portfolio managers, the world over (particularly in Canada) desperate to generate some alpha — any alpha — in any way possible, the one thing they cannot do — lest they take on career risk — is buy the junior Canadian resource stocks. Volt Lithium Corp. (VLT:TSV;VLTLF:US)
Anyone left in this business over the age of 60 has seen this all before and has become resilient to the emotional extremes of the sector.
The problem remains that most of the "old guys" who made fortunes financing the juniors are now too old or too retired to participate, while the youngsters who filled their shoes at AGF or Fidelity have rarely (if ever) made any money in the junior resource space.
Now, I can promise you that it will change once the new commodity supercycle gets its restart in 2024, but for now, with bonus cheques appearing painfully elusive going into the end of the year, we will all be waiting for a starter pistol to go off, but I fear that will be "at some point" in Q1 2024.
In the meantime, making sizeable returns in the junior space will require pinpoint execution and that means that companies like Volt Lithium Corp., a lithium "briner" developing a novel method of extraction for oil field brine pools, will be front-and-centre.
The stock is up over 500% since the August 2022 lows but down 56% from the May peak at CA$.55, yet still ahead 118.18% YTD. I will not go into the pro-forma earnings estimates, but suffice it to say, if CEO Alex Wiley executes in line with expectations and if lithium prices can recover to the May highs, this will be a Winner for the Ages.
Again, the risk in all junior securities lies in execution, but for uranium, lithium, and copper, there is no argument that can convince me that we are going to avoid severe shortages in all three and that is a tailwind that cannot be stopped.
I believe that these three metals will be the Three Horseman of the Commodities Apocalypse in 2024, with copper the only one of the three yet to move into the "mania" phase.
|Want to be the first to know about interesting Cobalt / Lithium / Manganese investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter.||Subscribe|
- Volt Lithium Corp. has a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000.
- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Volt Lithium Corp.
- Michael Ballanger: I, or members of my immediate household or family, own securities of: All. My company has a financial relationship with: Volt Lithium Corp. I determined which companies would be included in this article based on my research and understanding of the sector.
- Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
For additional disclosures, please click here.
Michael Ballanger Disclosures
This letter makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This letter represents my views and replicates trades that I am making but nothing more than that. Always consult your registered advisor to assist you with your investments. I accept no liability for any loss arising from the use of the data contained on this letter. Options and junior mining stocks contain a high level of risk that may result in the loss of part or all invested capital and therefore are suitable for experienced and professional investors and traders only. One should be familiar with the risks involved in junior mining and options trading and we recommend consulting a financial adviser if you feel you do not understand the risks involved.