Grounded Lithium Corp. (GRD:TSX.V; GRDAF:OTCQB) has purchased a large extension to their existing landholdings on the Kindersley Lithium Project, their flagship property. Grounded Lithium estimates that there is a significant amount of mineralization in the new land addition, and that the purchase will add value to the company as it increases their potential for production.
Grounded Lithium is also expanding the duties of one of their Chief Financial Officer, Greg Phaneuf, to include corporate development.
Grounded Lithium is a public company focused on supplying lithium for the production of batteries. It is headquartered in Alberta, Canada. The company is involved in all levels of lithium mining through subsurface brine production.
Grounded Lithium Expands Land
Grounded Lithium has recently expanded its holdings in the Kindersley Lithium Project (KLP), located in Saskatchewan. The company acquired 33 sections (8,498 hectares) of acreage to add to their previous landholdings for a total of 333 sections (86,229 ha). The company has started a National Instrument 43-101 Standards of Disclosure for Mineral Projects report, but the estimated amount of lithium carbonate equivalent in their total holdings is 4.2 million tons.
According to the company, they purchased the land for $425,000 which they believed to be a bargain compared to the amount of estimated lithium in the new land. This was paid in $175,000 and 779,557 shares, which were based on the 10-day volume weighted average trading price on the TSX Venture Exchange. In addition, the shares have a contractual escrow which is reduced by one third intervals every four, eight, and twelve months from the close of the deal.
Grounded Lithium is also expanding the role of Greg Phaneuf, their chief financial officer. To accommodate the company’s rapid expansion, Phaneuf will oversee corporate development activities. Phaneuf has experience with corporate development in the energy and industrial industries.
Lithium: the Key to Decarbonization
Within the past few years, Lithium has seen a meteoric rise as lithium batteries came into widespread demand. Michael Ballanger, in a contributed opinion chronicling his decision to invest in lithium for Streetwise Reports, said “I discovered a commodity that was on the verge of a massive shortage situation, and despite the 20% correction in lithium prices since last November, demand for lithium-ion batteries used in every electric vehicle currently in production is going parabolic but with new supply still a few years out.”
As always, investors may have concerns about getting into a market on the rise. According to an interview with investors by Stockhead lithium may have been somewhat overhyped, but demand is once again on the rise. The Lithium Report by Echlon concludes that “given the growing demand for electrified transportation and grid-scale battery storage owing to lithium’s favorable weight and high energy density characteristics versus other energy storage technologies,” the outlook for lithium is positive.
Demand for lithium is unlikely to fall, given green energy policies that push the public’s adoption of electric vehicles. The US Treasury Department recently amended policy classifying vehicles as SUVs to create tax incentives for consumers who buy electric vehicles. This change raised the maximum tax credit so that consumers could buy the more expensive models of electric vehicles.
Grounded Lithium Looks Towards Developing Its Holdings
Grounded Lithium reports that in the future, it will continue to look for qualifying opportunities to acquire resources. In order for these deals to qualify, them must meet economic, geological, and add a certain amount of value. Grounded Lithium is also looking to select a method of lithium extraction as they look towards developing their untapped holdings.
In the short term, Grounded Lithium is looking to complete a number of initiatives, including the results of detailed lithium extraction tests that were done in March. The results of these tests are particularly important, as the company will use them to make technological decisions. They are expected in April or May of 2023.
The company will file a preliminary economic assessment in June of 2023, and begin early stage permitting and the design of a field demonstration facility in H2 of 2023. If the time and funding permit, they may also begin the early stages of building a demonstration facility, also in H2 of 2023.
Ownership and Share Structure
Grounded Lithium has $3 million CA in the bank and says that the company has the financial resources to address their short-term catalysts. They report no set monthly drilling costs.
Insiders own 14% of the company with about 9.6 million shares. Institutions own approximately 17% of the company, though none own more than 10%, so names are not publicized. Grounded Lithium reports no strategic investors.
They report no potential sellers. In terms of negatives, success in junior pre-revenue resource companies is not guaranteed, especially when they are utilizing new technologies. Grounded Lithium has 12,000,000 public warrants at $0.50 CA, and 2.3 million finder warrants from previous financings at an effective price of CA $0.19.
Grounded Lithium works with a number of IR firms, including CDMG, First Phase Capital, Stonegate Capital, and Winning Media. They do not work with any influencers, but Koby Kushner of Red Cloud Securities, Dave Storms of Stonegate Capital, and Lee Bellinger all provide news coverage and analysis of the company.
Grounded Lithium has a market cap of $17 million US. There are 68,872,750 shares, 14,351,862 warrants, and 8,883,100 options. Grounded Lithium trades in the 52 week range between 0.22 and 0.50.
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Disclosures:
1) Amanda Duvall wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor/employee. He/she or members of his/her household own securities of the following companies mentioned in the article: None. He/she or members of his/her household are paid by the following companies mentioned in this article: None. His/her company has a financial relationship with the following companies referred to in this article: None.
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