The Western World races to Canada for its battery & critical metals abundance!

Chinese relations with the West continue to sink as Xi Jinping consolidated his supreme power with a third 5-yr Presidential term. As incredibly bad as Russia’s war on Ukraine is, China carries more weight on the global stage in the long-term.

Remember the good ole’ days when the West thought that China might try to unify Taiwan by 2027? Some experts now believe an invasion of Taiwan is virtually certain, and that it could happen in a matter of months not years..

It doesn’t help on the trade front that the Yuan is at nearly a 15-yr. low vs. the US$, down ~15% in the past eight months. One look at this excellent Benchmark Mineral Intelligence chart says it all.

Most of the world’s largest global auto & Lithium (“Li”)-ion battery makers — as well as leading technology companies, now recognize the urgency of diversifying away from China’s & Russia’s spheres of influence.

This means sourcing as much material, components & finished goods as possible from reliable sources. Yet much of Africa has its own set of development challenges and is not near key manufacturing & consuming hubs.

Europe is suffering through its worst energy crisis ever with no end in sight. Electricity prices are up 100s of percent year over year. That leaves N. America as the best place to do business.

NA enjoys strong demand from U.S. markets and low electricity prices. Canada has lower overall costs than the U.S. (incl. a weak C$) and cheaper energy costs. Canada also has one of the greenest power grids on the planet (lots of carbon-free hydro-electricity).

The provinces of Quebec & Ontario are rising stars in electric vehicle markets. Volkswagen, BMW, Mercedes-Benz, GM, Ford, Stellantis, Toyota & Honda have committed to Canada, as well as battery makers Umicore, LG Energy Solution, Panasonic & BASF.

Tesla is thought to be close to announcing a new gigafactory in Quebec.

One of my favorite junior mining companies poised to benefit from Canada’s rise is Infinity Stone Ventures (CSE: GEMS) / (OTCQX: GEMSF). Infinity is all Canada, all the time — with seven projects spanning Quebec & Ontario.

Investors in Infinity get exposure to Li, graphite, copper, cobalt, nickel, manganese and possibly some PGMs & REEs. That’s a lot of critical metals bang for the Canadian buck!

Infinity’s Li portfolio is impressive; four projects, 11k+ hectares, 65+ pegmatites, tens of km of prospective strike — very near or bordering Patriot Battery Metals [PMET] in Quebec — and within several hundred km of major Li projects owned by Nemaska, Critical Elements, Sayona Mining & Allkem).

A recent exploration program at the Camaro project (next to PMET) successfully confirmed historically mapped pegmatites and identified new showings. Eighty-seven grab samples were collected, results are expected in November. The team is excited about what was learned from this program.

See brand new corporate presentation

The battery-quality Li carbonate spot price in China is more than triple the twin peaks of 1q 2016 & 4q 2017. Today’s 562,500 yuan/tonne is ~US$77,750/t. To be clear, this price is not the same as longer-term contracts around the world, but even quarterly contracts outside of China are approaching US$60,000/t.

Although most of the excitement at Infinity is centered on its compelling hard rock Li opportunities in Quebec, the Company’s Ontario Li prospects are formidable as well. Its PAK South & PAK Southeast blocks are adjacent to Frontier Lithium’s world-class project.

Frontier has booked some of the best hard rock Li drill results the world has ever seen. It recently announced a blockbuster interval of 326.6 meters at a top-decile grade — 1.92% Li2O.

So far, Frontier has delineated ~1.6 million tonnes of Li Carbonate Equiv. (“LCE“). Analysts believe the resource could still grow 50% or more.

That meter x grade value of 627 is ~15x better than the average [meter x grade] metric of 33 other global hard rock Li peers (using their best drill hole intervals).

Infinity’s combined 1,416 ha (two blocks each touching Frontier, see map) is a large enough footprint to comfortably host hundreds of thousands of tonnes LCE. Peer pre-PEA projects with booked in-situ tonnes are valued at C$50-C$164/t LCE {average ~C$100/t}.

If Infinity could find 10% of what Frontier probably has, that would be ~240k tonnes LCE and could potentially be worth [240,000 x C$100/t] = ~C$20 million (discounted 10%/yr. for 2 years).

Of course, Infinity’s Frontier-adjacent footprint is un-drilled, so there could be far less than 240,000 tonnes LCE.

On the other hand, as multiple third-party Li processing facilities get built in Quebec & Ontario, and assuming Li prices remain strong, toll-millers should be willing & able to pay well into the $100’s/tonne and still generate tremendous profits.

Given that Frontier is almost certainly going to become a standalone mine with its own hydroxide plant, nearby deposits are going to be valuable pieces of real estate, especially if companies like Infinity have multiple mills to sell ore to.

Back to Quebec, if Infinity could book 10% of the resource that PMET might end up having, that would also be hundreds of thousands of tonnes LCE.

In the chart below I show the potential value (discounted back 2 years at 10%/yr.) of a range of scenarios, from Infinity finding a combined 100k to 1M tonnes LCE in Ontario & Quebec valued @ C$50-$500/mt.

If Infinity were to book a combined 200,000 tonnes LCE at C$100/mt, that alone could be worth C$16.5M vs. the Company’s current EV of C$22M.

Infinity’s Li credentials suggest there are multiple ways to win with its four projects. Drilling successes by peer Canadian Li players and/or Infinity’s own Quebec project drill programs (starting 1q 2023) would drive more attention to the Company.

De-risking events such as neighboring peers securing strategic partnerships and off-take/funding arrangements will deliver even greater interest to the compelling hard rock Li story unfolding across Canada.

Switching gears to graphite, Infinity owns 100% of the very exciting Rockstone project in Ontario. I believe graphite could be the next battery metal darling. There are now > 300 Li companies listed in Canada, the U.S., Australia & the UK.

By contrast there are closer to 60 companies with significant exposure to natural graphite. Graphite prices have not taken off like Li, but some analysts believe that will change.

Graphite, natural or synthetic, is as important as Li in today’s batteries. By volume, graphite is one of the most important elements in any EV battery chemistry, each containing 50 – 100 kg.

Virtually all natural graphite comes from China, Brazil & Mozambique, what could possibly go wrong?

A modest drill program following up on a strong historical graphite grade of 25% over 24 meters is scheduled for November. Importantly, the drill permit is good for three years. Eighteen additional drill-ready EM targets have been found.

Graphite samples have been upgraded to as high as 96.1% purity. SGS Lakefield is working to further refine Rockstone’s material to battery-quality (99.8% purity). All drill targets have the potential to also host VMS-type Cu/Zn mineralization.

The Zen-Whoberi Cu/Au/PGM project in Quebec will also be drilled later this year. This project is highlighted by a recent high-grade (15.5% Cu) surface sample.

Copper is out of favor at the moment (actually, only Li is in favor), but if/when copper retakes US$4/lb., Zen Whoberi will be an attractive project to be drilling. Below are images from fieldwork conducted in September.

Infinity Stone Ventures is benefiting from record high Li prices and excitement around nearby PMET, but graphite, copper and other critical metals might propel this Canadian project generator to new levels.

Drilling is starting next month at Rockstone and both Quebec Li projects will be drilled in 1q 2023. There’s considerable news flow to watch for. Readers are encouraged to review Infinity’s October corporate presentation to see all that this Company has to offer.

Disclosures / DisclaimersThe content of this article is for information only. Readers fully understand and agree that nothing contained herein, written by Peter Epstein of Epstein Research [ER], (together, [ER]) about Infinity Stone Ventures, including but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. is to be considered implicit or explicit investment advice. Nothing contained herein is a recommendation or solicitation to buy or sell any security. [ER] is not responsible under any circumstances for investment actions taken by the reader. [ER] has never been, and is not currently, a registered or licensed financial advisor or broker/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and does not perform market-making activities. [ER] is not directly employed by any company, group, organization, party or person. The shares of Infinity Stone Ventures are highly speculative, not suitable for all investors. Readers understand and agree that investments in small-cap stocks can result in a 100% loss of invested funds. It is assumed and agreed upon by readers that they will consult with their own licensed or registered financial advisors before making any investment decisions.

At the time this article was posted, Infinity Stone Ventures is an advertiser on [ER] and Peter Epstein owned shares in the Company.

Readers understand and agree that they must conduct their own due diligence above and beyond reading this article. While the author believes he’s diligent in screening out companies that, for any reason whatsoever, are unattractive investment opportunities, he cannot guarantee that his efforts will (or have been) successful. [ER] is not responsible for any perceived, or actual, errors including, but not limited to, commentary, opinions, views, assumptions, reported facts & financial calculations, or for the completeness of this article or future content. [ER] is not expected or required to subsequently follow or cover events & news, or write about any particular company or topic. [ER] is not an expert in any company, industry sector or investment topic.