The following article on American Battery Metals was written by Jeff Nielson, a high-ranking writer at StockHouse.com. Jeff has a background in economics & law, and has published > 1,300 articles. He covers mining, cannabis, technology & energy companies. This is a Guest Post, Peter Epstein and Epstein Research [ER], had nothing to do with its preparation, editing, formatting, content or distribution. Please see disclosures at the bottom of the page.
American Battery Metals Corp. (CSE: ABC) is a new junior mining company that is (re)developing the Temple Mountain Vanadium/Uranium mining complex. History buffs may recognize that name. It was at Temple Mountain that Madame Curie did her revolutionary (but tragic) research into radioactivity. Temple Mountain was also the site of important work on The Manhattan Project. More on the fascinating history of Temple Mountain later, as well as the new mining exploration taking place here.
When the President & CEO of American Battery Metals, Michael Mulberry connected with Stockhouse Editorial for a conference call, it was clear that he wanted to discuss more than just mining operations at Temple Mountain. This is a management team that is not merely familiar with drillcores and geological surveying. They also know metals markets and Michael Mulberry wanted to talk “vanadium”. Why is vanadium of such critical importance on the energy storage side of the Battery Metals Revolution? Mulberry explained.
“Vanadium is a product classified as a strategic mineral by the U.S. government and is primarily used for strengthening structural steel but is also in the aerospace industry for titanium-aluminum alloys. More recently, there has been an increase in demand to supply the new era of redox flow batteries for long-term energy storage, which has long been a challenge for the renewable energy sector. With a life span of over 25 years (up to 35,000 charges and discharges) and infinitely scalable capacity, Vanadium Batteries are the most effective storage solution.”
That partially accounts for why the price of vanadium pentoxide, V2O5 soared to nearly US$34 per pound near the end of 2018, rising more than ten-fold from its price at the beginning of 2016 (~US$3 per pound). While the price of vanadium has retreated significantly since then, currently below US$15 per pound, there are several reasons to expect this decline to be temporary.
As with many metals markets, acquiring a better grasp of supply/demand fundamentals starts in China. CEO Mulberry offered additional insights here.
“The current demand in China is due to a government mandate to include at least one pound of Vanadium to every tonne of structural metal produced. This coupled with little or no new production coming on line bodes well for a continued strength in the price of Vanadium.”
An important metal, with strong and rising demand in China – for both new and conventional applications. Illustrating the importance of vanadium in the 21st century economy of China, China is currently commissioning the world’s largest vanadium energy storage cell, an enormous 10MW/40MWh vanadium redox (flow) battery, with Phase 1 of this project now complete.
Slightly further down the road in China is a mammoth project, a 200MW/800MWh vanadium flow battery system being manufactured by Rongke Power and expected to come online in 2020. To put this into context, globally there is currently a total of 256MW of energy storage capacity via vanadium-based batteries.
The vanadium market is not merely a demand story. Vanadium is a scarce metal. Unlike cobalt (another scarce battery metal), vanadium is found in deposits which can support primary vanadium mining. But such deposits are rare, and most known sources of vanadium today are in jurisdictions that are viewed as less-than-ideal by Western governments.
For this reason, vanadium has been added to the U.S. government’s “critical minerals” list, meaning that the U.S. sees an important need for the development of domestic sources of this vital metal. Enter Temple Mountain and American Battery Metals.
The Temple Mountain property is a 435-hectare land package, comprised of 52 contiguous claims. Mineralization was first discovered in 1898, with mining operations taking place intermittently from 1914 through 1978. The high-grade mineralization found at Temple Mountain typically comes in the form of “lens” formations. Altogether, more than 3,000,000 pounds of vanadium have been mined here.
As implied by its (famous) past, Temple Mountain has historically been regarded as a uranium operation. Indeed, when mining at Temple Mountain ceased in 1978 it was due to a decline in the price of uranium.
Here it is important to note that relative to today’s price for vanadium, historic prices were far lower. This reflects the fact that prior to the Battery Metals Revolution, demand for vanadium was almost exclusively as an alloy in the steel-making industry. As noted by Michael Mulberry, vanadium makes steel stronger.
That’s still an important component of vanadium demand. However, with the additional robust-and-rising demand for vanadium as the primary material used in energy storage cells (as much as 85% vanadium), this translates into a permanent change in the price level for this metal.
At Temple Mountain, the high-grade mineralization tends to occur at roughly a 5:1 ratio of vanadium to uranium. In historical mining at Temple Mountain, the relative pricing of the two metals still made uranium the “primary” metal. In any future mining, it will now be the vanadium that is of primary importance.
Management of American Battery Metals has an enormous amount of historical mining data to process here. Included in this data are historical drilling intercepts assaying at grades as high as 4.97% V2O5 and 1.85% U3O8.
When it comes to technical work on this Project and analysis of the local geology, the expert is John Walther. Walther is a professional geologist and consultant for GeoMinEx Consultants. He’s also a Director of American Battery Metals.
Walther shed some light on the particular nature of the geology at Temple Mountain:
“While the first claims in the Temple Mountain area were staked in 1898, the economic potential of the geology in the district was first studied in 1913. Since this time, the understanding of the collapse structures, alteration and genesis that created these deposits have improved considerably. The Temple Mountain collapse structure is the largest of the district and is about 3,000 feet long and 1,500 feet wide. This provided the channels through which uranium and vanadium rich fluids were introduced. Other factors such as folding, composition of sedimentary rocks and the presence of hydrocarbons in the rocks contributed to the size, shape and distribution of these near surface lenses of mineralization.
From 1914 to 1920, a ‘considerable but unknown’ amount of ore averaging 1.75% U3O8 and 4.0% V2O5 was produced. After this, limited mining activity was seen in the Temple Mountain area for close to 3 decades. From 1948 to 1956 the district produced 261,000 tons of ore containing 1,287,000 pounds of U3O8 and 3,799,000 pounds of V2O5, with the majority coming from near Temple Mountain.”
While Temple Mountain is an historically famous site with decades of mining history, American Battery Metals itself is a brand-new company. The Company came into existence via an IPO in November 2018.
Management is already methodically completing the work necessary to commence an initial drilling campaign, including exploration permitting and some modest road construction. The permitting process has taken slightly longer than expected. The result is that drilling is expected to commence in Q2 rather than at the end of Q1.
A 1,000-meter drilling program is planned (and fully funded), to be comprised of 10 near-surface drill holes. Six of the 10 targets have already been chosen, but with the amount of historical data available plus all the visible evidence of past mine workings, there are an abundance of targets from which to choose.
Another important member of the Company’s technical team is Matthew Rhoades. Rhoades is the QP (“qualified person”) for American Battery Metals, an experienced professional geologist with broad exposure to the mining industry. This includes serving as the former State Geologist for New Mexico.
The historic, small-scale mining operations that occurred at Temple Mountain on and off for decades were a reflection of how much less technologically sophisticated mining operations were in previous generations. With modern mining exploration techniques (plus decades of data), American Battery Metals is well-positioned to establish the Temple Mountain Project as a site for potential commercial-scale vanadium (and uranium) mining.
While the story at Temple Mountain itself is high-grade vanadium & uranium mineralization, when investors look at American Battery Metals (trading on the CSE under symbol “ABC”), the word that likely comes to mind is “value”. For investors looking to ride the next wave higher in the vanadium market, ABC’s market cap is an extremely compact $8.5 million (as of this writing). And this isn’t early-stage exploration, where the existence of significant vanadium mineralization has yet to be confirmed.
The mineralization here is known, high grade, and near surface. Investors also need to be cognizant of the uranium mineralization at Temple Mountain. After many years of a uranium bear market, a rising chorus of mining analysts are predicting a strong rebound in uranium – sooner rather than later.
In addition to the $1.5 million that the Company raised with its IPO, American Battery Metals could see more than $1 million flow into its treasury via the exercising of warrants – with those warrants currently clearly “in the money”.
Temple Mountain is a flagship vanadium Project that provides investors with a strong foundation. American Battery Metals boasts a management team with their fingers on the pulse of the vanadium market. Offering additional upside is the Company’s Fish Lake Valley lithium property.
Located proximate to the Rhyolite Ridge lithium deposit in Nevada (currently a 4.1 million tonne lithium carbonate resource), Nevada is renowned as one of the world’s hot-spots for lithium exploration. With the price of lithium trending lower in recent months, management is squarely focused on Temple Mountain at present.
Meanwhile, with the price of vanadium also temporarily lower, this provides investors with an attractive entry window to gain exposure to this rising sector. For investors looking for a strong vanadium asset with an astute management team – at a great value – it’s as easy as “ABC”.
The article above on American Battery Metals was written by Jeff Nielson, a high-ranking writer at StockHouse.com. Jeff has a background in economics & law, and has published > 1,300 articles. He covers mining, cannabis, technology & energy companies. This is a Guest Post, Peter Epstein and Epstein Research [ER], had nothing to do with its preparation, editing, formatting, content or distribution. American Battery Metals is an advertiser on Stockhouse.com
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