The World Needs More Canada.
There’s never been a time when the world – and Europe, especially - needs more of Canada than today.
War in Ukraine. Inflation at record highs. Climate change wreaking havoc. Supply chain snarls. A shortage of goods, services and workers around the globe, with the full effects of the pandemic still playing out.
Against this backdrop, the need to gain secure access to the products that make the world run has focused corporations to look at alternative business solutions.
Do you want your source of lithium to be China? (China refines two-thirds of the world’s lithium). What about the reliability of your solar panel manufacturer? (China has a 75% market share of solar panels).
Canada is coming into focus as a premier economic partner because of its close proximity to Europe, capitalistic by nature, with an increased focus on the environment. Canada has long been a major producer of the materials the global economy runs on.
Canada is an important producer of such critical minerals as aluminum, cobalt, copper, graphite, nickel, and uranium. However, other ‘emerging’ minerals are at an early or advanced stage of exploration and processing.
Canada is the only nation in the Western hemisphere with all the minerals and metals needed to produce advanced batteries for EVs. These minerals include copper, cobalt, REEs, graphite, lithium, manganese, and nickel. (Innovation News Network)
The recently passed U.S. Inflation Reduction Act (a more appropriate name would have been the Green Act) was a surprisingly big win for Canada. The Act was modified at the last minute from “Buy American” to “Buy North America”. In our view, this will enable a wave of new green industries in Canada.
Coinciding with this American focus, the Canadian federal government has budgeted to spend $3.8 billion over the next eight years for Canada’s first critical mineral strategy. Not to be outdone, the Provincial Government of Ontario boasts of having already co-invested $16 billion in public/private EV investments in the last 2 years.
Corporations are starting to take notice. Volkswagen and Mercedes-Benz have just completed agreements in Canada to secure access to raw materials such as nickel, cobalt, and lithium for battery production. “Canada’s reliable democracy is preferable to Russia for energy and raw materials” (German Chancellor Scholtz, Bloomberg, August 22, 2022). Scholtz added, “we want to cooperate closely, especially when it comes to building a hydrogen economy.”
The current ranking of the economic value of Canadian mineral production will certainly be altered over the next decade.
Electricity demand is increasing with electric vehicles and hydrogen production ramping up. Canada’s electricity system also plans to get greener, going from 82% low and non-emitting production in 2021 to 95% in 2050. (Canada Energy Regulator 2021)
Wind, solar, and battery storage dominate electric capacity additions in all six net-zero electricity scenarios, making up between 82%-85% of added capacity.
Junior resource companies play a critical role in the discovery and advancement of mineral projects in Canada. These projects represent the next generation of Canadian mines. In 2020, junior mining companies spent $1,029 million on exploration and deposit appraisal activities.
Here are six companies in the precious metals & green energy materials space that are clients of Peterson Capital, and who will be presenting to its network of European fund managers and family offices at “The Canada Growth Conference” in the south of France on September 22-24th:
Lucara Diamond Corp LUC-T – Mkt Cap CDN $285 million – owns the prolific Karowe diamond mine, one of the world’s foremost producers of large, high-quality diamonds, located in Botswana. Lucara is also disrupting the global diamond marketing sector with Clara Diamond Solutions, its proprietary, a digital marketing platform that’s rapidly gaining traction in a global market, provides an additional revenue source to Lucara, and offers significant value creation potential.
Presenting: Eira Thomas, President & CEO
Andean Precious Metals APM-V – Mkt Cap CDN $137 million – with a strong, debt-free balance sheet and a full pipeline of M&A and organic growth opportunities, Andean is a free-cash-flow generating silver producer that’s well positioned for growth, anchored by its flagship mine - the only commercial silver oxide plant in Bolivia. Bolivia is the underexplored core of the most mineral-rich region in the Americas.
Presenting: Simon Griffiths, President & CEO
Tembo Gold Corp. TEM-V – Mkt Cap CDN $21 million – holds 100% of its ~35 km2 license area adjacent to Barrick Gold’s 20Moz Bulyanhulu Mine in Tanzania and is pursuing the discovery of one or more multi-million-ounce gold deposits. Barrick’s equity investment in Tembo creates a meaningful and long-term partnership with the world’s second-largest gold producer and one of the most influential companies within the East African region. Presenting: Simon Benstead, CFO, VP of Business Development
Northern Graphite Corporation NGC-V – Mkt Cap CDN $75 million – a leading graphite production, development & processing company for high-value products critical to the green economy. The only significant graphite producer in North America & third largest non-Chinese producer in the world. Its three projects in Canada & Namibia all have “battery quality” graphite & are located close to infrastructure in politically stable countries.
Presenting: Hugues Jacquemin, CEO
Green Impact Partners GIP-T – Mkt Cap CDN $152 million – has a $3 billion pipeline of RNG projects under development and construction in Canada and the US, including its flagship project, Future Energy Park, North America’s largest carbon negative RNG and bio-fuel project, located near Calgary, Alberta, in Western Canada. Participates in a wide range of zero-carbon opportunities during any stage of the project lifecycle – from idea generation through to operations – to expedite the growing global demand for clean energy. Presenting: Jesse Douglas, CEO
Loop Energy Inc. LPEN-T Mkt Cap CDN $73 million - designs, manufactures and sells next-generation hydrogen fuel cell systems into the global commercial e-mobility market. Transit buses, logistics fleets, delivery trucks, and specialty vehicles use Loop’s proprietary technology as a zero-emissions power solution. Announced UK expansion in August to meet growing customer demand in continental Europe and the UK, where diesel and gas vehicles will start to be banned in 2030.
Presenting: Ben Nyland, President & CEO
Tim Morton, CFA, Investment Research Consultant to Peterson Capital