February 2, 2022
Megawatt Lithium and Battery Metals Corp. (CSE:MEGA, Not Rated, Koby Kushner) announced that it plans to commence exploration of rare earth elements (REE) and uranium at its Arctic Fox and Isbjorn properties in Australia. Historical sampling returned encouraging grades of up to 1,179 ppm U3O8 from Arctic Fox, and up to 699 ppm U3O8 from Isbjorn. We expect the proximity between both projects to allow for cost-effective exploration synergies. The Arctic Fox project is contiguous to Arafura Resources’ (ASX:ARU, Not Rated) Nolans Bore project to the southeast, and Power Metals Resources’ (LSE:POW, Not Rated) Selta project to the northwest. Meanwhile, Isbjorn is located within 15km of the Charley Creek REE deposit. Notably, Nolans Bore has a JORC resource of 56Mt at 162 ppm U3O8 and 2.6% total rare earth oxides, and is capable of potentially supplying 10% of global REE demand for electric motors. Arafura is expected to commence production at Nolans this year, and is planning to sell directly to European EV manufacturers after processing the ore on-site. In our view, the decision to begin exploring these properties is well-timed, as fundamentals for REEs and uranium have continued to improve. First, automakers would require REEs such as neodymium and praseodymium (NdPr) to develop next-generation electric vehicles. Second, China currently controls 80-90% of the REE supply, because of which, manufacturers are looking to safeguard their supply chains through geographical diversification. Third, there is a paradigm shift to recognize uranium as a source of green energy, which has led institutions like Sprott Physical Uranium Trust (SPUT) (TSX:U.UN, Not Rated) to increase their physical uranium holdings (read more). In our view, Megawatt is more than a lithium company as it has nine prospective projects in tier-one jurisdictions of Australia and Canada that span a wide spectrum of commodities including lithium, REEs, uranium, cobalt, copper, silver, gold, lead, zinc and scandium to name a few. With several projects being concurrently advanced, including its Tyr project in Australia (read more) and its Li projects in Quebec (read more), and widespread commodity exposure, we believe Megawatt has a lot to offer for a sub-C$15M market cap company. Read more
