As an investor, though we know energy metals is a hot space, it’s sometimes tough to figure which of the energy metals is the place to send your dough.
We all know lithium ion batteries aren’t going away any time soon. Betting against the need for rechargeable batteries, while using your cellphone (which needs them) and laptop (which needs them), and using energy which increasingly came from wind and solar (which, again, needs them), before driving home in your car (I could go on) would be silliness in the extreme.
But lithium stocks, over the last few years, have gone up and then down some, and cobalt stocks have gone up and then down some, and uranium stocks are almost constantly in a place of being considered the next big thing… So picking which horse to sit on at any given moment is often guesswork.
Invariably, investors choose ‘what’s everyone else betting on today?’
Not many companies cover the board. Azincourt Energy ( AAZ.V) is giving it a shot.
If you haven’t heard of Azincourt, that’s no slight on your powers of investigation. They’ve been rolling with their headlights off for a while now, coasting along as they gather pieces to an increasingly renewable puzzle.
Back almost a year ago I said they were gearing up for something. Here’s what I wrote:
If you look at Azincourt’s news release history, you find they’ve only released four pieces of news since a February 2015 rollback. And all four of those news pieces dropped in the last few months. They are most easily described as follows:
1: (OCTOBER 2016) We could really use a few bucks about now, but we know we’re not going to get much, just please give us anything.
2: (NOVEMBER 2016) We’re raising some money to pay for office rent and it’d be great if someone, somewhere, would give us some, please and thank you.
3: (FEBRUARY 2017) We’re raising a LOT more money to pay for office rent – and explore new opportunities.
4: (FEBRUARY 2017) We got all the money we wanted on that last raise, and then some, and it’s going to pay for office rent – AND DID WE MENTION THERE ARE SOME NEW OPPORTUNITIES OUT THERE?
Opportunities were indeed had.
The first was an option on a uranium property from Skyharbour (SYH.V) and Clean Commodities (CLE.V).
Then they raised around $2.5m over a few months and grabbed five lithium projects in Winnipeg from New Age Metals (NAM.C).
Then they took an LOI on a cobalt project in the surging region of Cobalt, Ontario, adjacent to Cruz Capital and Brixton Metals property.
That region is heating up. In fact, I just talked to someone at Cobalt, Ontario who tells me if they could just convince the residents to leave, there’s enough cobalt under the main street of the town to fuel a massive camp up there. Brixton Metals is literally drilling behind the hockey arena, such is the demand and opportunity.
So the question now becomes, is this a resource development play or a prospect generator? Is it even possible to work all those claims and advance them on a smallcap company’s dime?
And if not, what will they focus on?
Vancouver B.C., February 20, 2018 – AZINCOURT ENERGY CORP. (“Azincourt” or the “Company”; TSX.V: AAZ, OTC: AZURF) is pleased to announce it has signed a non-binding letter of intent (“LOI”) to acquire 99.5% of the outstanding share capital of Guevan Petroleum Company S.A. (“Guevan Petroleum”), a Peruvian private company that currently holds the Macusani-Cuzco lithium-uranium project, located in the Macusani Plateau, Puno, south-eastern Peru.
The Macusani-Cuzco project consists of approximately 30,000 hectares (300-sq kms) located on the Macusani Plateau, one of the largest and highly prospective lithium/uranium districts in the world.
The Macusani Plateau features unique, shallow, volcanic-hosted supergene/surficial uranium deposits as well as recently discovered high-grade lithium mineralization.
This is like a cannabis farm discovering a server farm mining Bitcoin hidden under their greenhouse. It’s like the mullet of energy metals plays – business in the front, party in the back.
Let’s talk shop.
The Macusani-Cuzco land position is adjacent to the western edge of Plateau Uranium’s (TSX.V: PLU) Macusani Project, which contains the high-grade Falchani discovery with consistent 3,000-3,500 ppm Li over 100m true thickness at depth, and U 3 O 8 grades up to 500 ppm over 50m intercepts from surface*. In addition, surface sampling at Falchani yielded results up to 9,766 ppm U 3 O 8 with 12 samples exceeding 0.1% U 3 O 8 , and Li values up to 1,140 ppm Li with 16 samples exceeding 400 ppm Li*.
Let’s be clear: Those numbers are great, but they’re also from the property next door. While there’s every chance that the property Azincourt just agreed to pick up – in a shares-only deal – features similar geology, it’s an early stage play.
But, brothers and sisters, URANIUM ON TOP, LITHIUM UNDERNEATH.
I couldn’t tell you which, of cobalt, lithium, and uranium, will be the ‘energy metal du jour’ at any given time. But I know being able to bet on red, and black, and green, all at the same time, is a nice way to ensure your roulette bet pays off.
There’s massive demand for cobalt not mined by African kids dangling in deep holes on the end of ropes. But there’s also demand for lithium, being as Tesla wants football stadiums filled with the stuff to fuel its big battery plans.
But Tesla isn’t even the biggest dog in town. What VW and BMW want in terms of energy metals dwarfs the needs of Tesla, so much so that I’m told they’re talking to potential producers before mines are even close to being built.
Chinese companies have already grabbed Lithium-X (LIX.V) for $240m+ and bought into Millennial Lithium (MIL.V) at a comparable price tag. QMC Quantum Minerals (QMC.V) has gone on a terrific run in Manitoba before they’ve done much more than kick over rocks, based on buzz that the Chinese are coming for that play. That’s, in turn, pushed up the value of everything around it.
But all of these deals are ‘one resource’ deals. Assuming the Peru deal moves to definitive, Azincourt has potentially more than one resource to play with in just one of their properties, and if lithium demand falls off and cobalt picks up, or uranium suddenly awakens, as has been threatened for several years now, this company will suffer no backlash because they can simply focus on the thing that the market wants, that they already own.
That’s a hell of a hedge. But what makes Azincourt much more interesting isn’t the potential to protect their share price, it’s the potential to multiply it.
Market caps of central Canada-based early stage energy metals explorers:
QMC Quantum Minerals (QMC.V) – lithium: $54m
Cobalt Power Group (CPO.V) – cobalt: $28m
Skyharbour Resources (SYH.V) – uranium: $24m
Azincourt Energy (AAZ.V) – 2x uranium, cobalt, 2x lithium: $12m
I’m not going to get into the geology of every property Azincourt has claims on because, frankly, it would bore you to tears and take a lot of pages. And I’m not going to go on a long spree about the management team, and how they’ve done it all before, because you can find that on their website. And I’m not going to talk about their partnerships with Fission 3.0 and Skyharbour in the Athabasca, though you can find all that if you want to.
No, for mine, what makes this a really interesting deal is where it was a year ago, when we first pointed out that it was moving, and it had precisely one property to talk about.
In February 2017, I wrote this story when I noticed AAZ had emerged from slumber. The stock had already moved to $0.15 but nothing had actually happened yet. In fact, the stock had been largely dormant for a year.
Today? With three more properties acquired or in the process of being acquired, with dollars raised and three commodities on deck, with all that progress being made and resources in the midst of a strong run, and the company clearly moving hard with regular news… Azincourt trades at just $0.18.
What more needs to be said?
— Chris Parry
FULL DISCLOSURE: This story was written in partnership with McClelland Media Partners, of which Azincourt Energy is a marketing client.