Fabled Copper Corp. (FABL:CSE) announced it has entered into definitive agreements to acquire two lithium properties in Quebec.
The agreements for the OHM and Volt 1 properties each have a closing date of June 28, the company said.
"Once the Northern Quebec fire restrictions are lifted, the company's field teams will begin a first pass, mapping, prospecting, and sampling on the OHM and Volt 1 and 2 properties to set the groundwork for a more comprehensive exploration program to concentrate on the areas and lithium-bearing pegmatites outlined in Phase 1," said Fabled Copper President and Chief Executive Officer Peter Hawley.
Fabled announced letters of intent for the purchase agreements in March. While waiting for drilling permits for copper, silver, and gold projects in British Columbia, the company is moving to balance its holdings.
"Quebec is going to become the lithium hub of North America, unequivocally," Hawley has said.
Other companies are seeing success looking in the province for the element, which is set to have a market of US$19 billion by 2030, according to a report from Research and Markets.
"Rising investments in lithium mining and related technologies are projected to remain a key trend in the market," the report said. "Lithium mining is witnessing rapid growth as its demand is accelerating owing to its application in batteries."
The Catalyst: Great Neighbors
Patriot Battery Metals Inc.'s (PMET:CA) Corvette lithium project is also in the James Bay district. The company discovered a 4.3-kilometer trend of spodumene pegmatite in 2017. Its market cap was nearly CA$500 million last fall. Now, it's CA$6.95 billion.
Recent volatility may have scared some investors, but analysts at Canaccord Genuity in a May research note said they believed the market for lithium will see deficits and elevated pricing.
Other companies, such as Allkem Ltd. (OROCF;OTCMKTS), Critical Elements Corp. (CRE:TSX.V), and Investissement Québec and Livent Corp. (LTHM:NYSE) have had success developing lithium deposits in the James Bay area.
Hawley said another advantage for the area is infrastructure and support from local governments.
Fabled had to use helicopters for as much as CA$5,000 per day to get to exploratory sites in British Columbia, but in Quebec, "you just drive, and you're there," he said.
Exploration work is expected to begin on the sites this year, with drone work, LiDAR, ground mapping, and sampling.
Details of Transactions
The OHM property is made up of 51 cells over more than 2,800 hectares about 70 kilometers south of Val-d'Or. At least ten pegmatite outcrops, which host many lithium deposits in the region, have been documented there.
Under the terms of the agreement with the vendors, which include a group of geologists and miners, Fabled may exercise the option to acquire the property after making cash payments of CA$500,000, issuing 1.2 million common shares, and spending CA$1.2 million in exploration costs over two years.
Fabled will also grant the vendors a 3% net smelter return (NSR) royalty. The company can purchase 2% back at any time for CA$2 million under the agreement.
The U.S. has also allocated US$5 billion to build out its national EV charging network, analysts Anoop Prihar and Alex Riazanov of Eight Capital wrote in a May research note.
The VOLT 1 property in the James Bay Lithium District is made up of nine cells over 504 hectares.
Fabled may be granted an option to acquire VOLT 1 after making cash payments of CA$200,000, issuing 1.4 million common shares, and spending CA$550,000 in exploration costs over two years.
The VOLT 1 vendors will also be granted a 3% NSR royalty, of which Fabled can purchase 2% back at any time for CA$2 million.
The company also entered into a purchase agreement to buy two nearby lithium claims totaling 112 hectares for a one-time payment of CA$1,000. It is calling that property, which it bought outright, VOLT 2.
Deficits, Elevated Pricing Expected
Recent volatility may have scared some investors, but analysts at Canaccord Genuity in a May research note said they believed the market for lithium will see deficits and elevated pricing.
"As such, we remain long-term bulls on the sector," they wrote.
A soft, silvery metal with highly reactive and flammable properties, lithium is a major component of electric vehicle (EV) batteries. It's also used to strengthen alloys, as a high-temperature lubricant, and as a drug to treat bipolar disorder.
China only has less than a quarter of the world's lithium resources but controlled about two-thirds of the world's lithium processing and refining capacity in 2021, Rystad Energy said.
Streetwise Ownership Overview*U.S. President Joe Biden has allocated US$3.16 billion in grants to support domestic EV battery manufacturing. The Inflation Reduction Act (IRA) also provides up to a US$7,500 tax credit for EVs that source 40% of their materials from North America or countries that have free-trade agreements with the U.S. That requirement increases to 80% by 2027.
The U.S. has also allocated US$5 billion to build out its national EV charging network, analysts Anoop Prihar and Alex Riazanov of Eight Capital wrote in a May research note.
"We continue to believe that the United States is the most attractive EV market globally," the analysts wrote.
Ownership and Share Structure
According to Yahoo Finance, about 3% of the company is held by insiders. They include Director Luc Pelchat with 1.19%, David Smalley with 0.86%, and President and CEO Hawley with 0.65%, Reuters said.
The rest, 97%, is retail.
Fabled Copper's market cap is about CA$15 million, with 17.37 million shares outstanding, 16.88 million free-floating. It trades in a 52-week range of CA$0.45 and CA$0.025.
Sign up for our FREE newsletter
Important Disclosures:
- Fabled Copper Corp. is a billboard sponsor of Streetwise Reports and has paid SWR a sponsorship fee between US$3,000 and US$5,000.
- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Fabled Copper Corp.
- Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
- `The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
For additional disclosures please click here.
