Gold and electric vehicles — they’re both powerful investment themes with indisputable arguments for far higher prices over the coming years.
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Regular readers of this letter are familiar with the arguments for both.
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Gold is riding a wave of fiscal and economic stimulus unleashed in response to the pandemic.
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The massive liquidity pumped into the system and the Fed’s seeming QE-Forever policies will keep real interest rates low to negative for years.
It’s the perfect environment for a tangible monetary asset like gold to shine, and it’s already lifted the yellow metal to new heights earlier this year.
And while that upward momentum has taken a pause in anticipation of today’s U.S. election, the long-term trend is very, very bright for the yellow metal.
The same is true of the electric vehicle trend.
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As the world’s go-to solution to reduce emissions and battle climate change, the electrification of the world’s vehicle fleet is gathering momentum.
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The chart below shows you just how pronounced analysts expect that trend will be.
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| Driven by climate change concerns, the global electric vehicle (EV) market is expected to grow explosively in the decades ahead. |
Which brings us to QMC Quantum Minerals (QMC.V; QMCQF.OTC) — a company that offers exposure to both of these juggernaut trends via its lithium project and its district scale, target-laden gold-copper-zinc-nickel projects in Manitoba
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A Lithium Project Near Key Manufacturing Facilities
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Originally outlined in the 1950s, the lithium resource on QMC’s Irgon project comes with a wealth of available infrastructure.
The Lithium Corporation of Canada defined that resource with 25 holes drilled into the Irgon Dike, outlining an historic resource of 1.2 million tons grading 1.51% lithium oxide.
The former Irgon Mine was built to access this ore, including a 74-meter shaft and 366 meters of lateral drifting.
However, the low lithium prices of the late 1950s meant that this work was stopped and the mine was shuttered before it even opened.
Fast forward to an entirely different world today.
Now, with the EV market driving demand for the lithium-intensive batteries that power them, Irgon’s location in southeast Manitoba puts it within shooting distance of the U.S-Canada auto-manufacturing complex.
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| QMC Quantum’s Irgon lithium project has an historical lithium oxide resource a short trucking distance from a processing facility at the Tanco Mine |
It also puts it within easy trucking distance to the Tanco mine to the south, which has the potential processing capacity to turn Irgon’s lithium oxide resource into a lithium concentrate.
With surface indications at Irgon suggesting the potential for as much as 5 million tons of lithium (which, if found, would be roughly ~$2 billion worth of lithium concentrate), this project’s near-term production potential and ideal location make it a compelling bet on the lithium trend.
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Gold (And Base Metal) VMS Projects Offer Myriad Lottery Tickets
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Providing a key backstop to this lithium story (and a powerful investment argument in its own right) are Rocky Lake and Namew Lake, two adjacent gold and base metal projects in Manitoba’s prolific Flin Flon and Snow Lake region.
Since the early 20th century, the region has been known to host rich, volcanogenic massive sulphide (VMS) deposits of copper and zinc gold and silver.
Hudbay Minerals’ nearby Lalor deposit is world-class, with a total VMS resource of 19 million tonnes of 0.85% copper, 3.15% zinc, 4.22 g/t gold and 27.6 g/t silver.
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QMC’s Rocky Lake project hosts its own VMS mineralization and appears to host significant grades of gold, copper, zinc and iron.
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And then its adjoining Namew Lake project boasts a target-rich environment in its own right.
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| QMC’s adjacent Namew Lake and Rocky Lake projects lie within the prolific Flin Flon VMS district |
Like Irgon, it has highways, rail and power available to help it move along the development curve as QMC outlines resources there.
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And the potential is significant — a VTEM survey of the Namew Lake has outlined no less than 41 potential VMS targets.
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And the potential is significant — a VTEM survey of the Namew Lake has outlined no less than 41 potential VMS targets.
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Play Two Hot Trends With One Investment
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With near-term lithium production possible at Irgon and longer-term gold and base metal potential in play at Namew Lake and Rocky Lake, QMC Quantum Minerals is well-positioned to provide leverage on both the EV and gold trends.
All three projects have proximity to key infrastructure and the ability to grow substantially via drilling.
In the short-term, the company already has three NDAs in place with China-based firms on potential purchase agreements for Irgon’s lithium resources.
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Historic metallurgical tests have shown the Irgon resource to be capable of producing a 6% lithium concentrate, worth about $345 million gross at current lithium carbonate prices.
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Add in the very real potential the property shows to expand its hard-rock lithium resources significantly, and you have a lithium project that’s practically begging to be put into production.
The gold-hosting VMS mineralization QMC is pursuing at Rocky and Namew Lake make the company a one-two, lithium-gold punch for investors.
If you want to play both trends with a single investment, you’ll want to seriously consider a position in QMC Quantum Minerals.
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