Avoid Getting Hosed During This Lithium and Cobalt Mania
I know a thing or two about profiting from battery metals.
Back in 2015 — before “lithium mania” hit — I got readers into a little lithium junior for C$0.15.
That company, Lithium X, was just acquired by a Chinese firm for C$2.61 — a return of as much as 1,640% on our money.
The next year, when lithium started making mainstream headlines, we got Millennial Lithium (TSX-V: ML) at C$0.65. Those shares have subsequently been as high as C$4.80 — a 638% return.
And my latest recommendation in the space — Advantage Lithium (TSX-V: AAL) — is up 42% since I recommended it and I expect it to double from here as major automakers begin rolling out their new fleets of electric vehicles.
Other lithium companies haven’t enjoyed the same success. I was warning you about these two years ago when the theme became popular and subpar management teams began gobbling up and promoting subpar assets.
In the article “Mining Belies, Lithium Lies” in early 2016, I told you:
Companies are being promoted of which management knows outright they have no chance of being a mine.
And now we’re seeing the proof and results of that firsthand. After climbing to over a dollar, Pure Energy Minerals (TSX-V: PE) finally told the market what I knew long ago. In a recent press release, it admitted the British Columbia Securities Commission was making it clarify its risks.
Namely, that the technology the company plans on using has never before been used to produce lithium.
I’d call it a big red flag if you’re out there promoting yourself as the next great thing in lithium and the process you’re pursuing has never before been used to produce lithium. There may be a few unforeseen roadblocks and hurdles.
But the company somehow always failed to mention that.
And once its hand was forced by regulators, shares continued their downward spiral and now sit at multi-year lows.
Some retail investors who bought the hype at C$1.00+ no doubt lost their shirts.
Diligence matters. Details matter. Ethics matter. Having a deep network in a very high-risk industry that can alert you when a company, project, or management team isn’t up to snuff is extremely important.
We have all those things and use them to make highly vetted stock recommendations while others take the dartboard approach, blindly stabbing with their steely knives at companies in hot sectors. There are obvious pitfalls to that as I just illustrated.
So here we are, a few years into this battery metals bull. And it’s actually happening. All the automakers are rolling out large fleets of electric vehicles.
Everything from nickel and copper to lithium, rare earths, and cobalt are getting attention for the quantities that will be needed to make all the batteries and the fortunes that will be made as that happens.
The hype is justified. It’s a megatrend.
But not all companies that have “lithium” or “cobalt” or “vanadium” in their names are going to make it. Beware of bandwagon jumpers when it comes to companies and so-called experts.
A company we’ve extensively researched, and where we've met with management and checked their bona fides with our industry contacts…
A company that has already permitted and constructed a mine for one of the world’s most needed battery components, and is already in talks to supply it with two former top Tesla executives who are building the world’s newest battery Gigafactory in Europe.
And all the ones we’ve put together for you here point to this being our next big win in the battery metals space.
Call it like you see it,
Nick is the founder and president of the Outsider Club, and the investment director of the thousands-strong stock advisories, Early Advantage and Wall Street's Underground Profits. He also heads Nick’s Notebook, a private placement and alert service that has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world. For more on Nick, take a look at his editor's page.
You'll Never Be On the Inside!
After getting your report, you’ll begin receiving the Outsider Club e-Letter, delivered to your inbox daily.