Surge Battery explores high value deposits

Marc Zerbola Challande
3
minute read

Surge Battery Metals (TSXV: NILI, OTC: NILIF, FRA: DJ5) is a Canadian-based exploration company focused on locating & developing high-value deposits of clean energy battery metals for the rapidly growing EV market. The company recently released important news, which propelled the stock price to a strong close on Friday, December 2, with a gain of +48.65%. The first news is the company announced strong lithium results from drilling at the Nevada North Lithium project early in the month. Then, it withdrew its private placement and will look for other funding sources in the future.


Why invest in the EV market?

Investing in the EV market means investing in the future. Indeed, governments are coping against global warming as +20 countries are entirely phasing out fossil fuel cars over the next 10-30 years. Electric vehicles appear to be a sustainable solution compared to thermic motors. The EV sector represents a $7 trillion global market opportunity between now and 2030 and $46 trillion in 2050. The number of electric vehicles increased by 600% between 2010 and 2020, and 18 of 20 of the world's top automakers are planning to scale up EV production rapidly. Nickel and lithium are the backbones of this technology because they offer significant benefits. Nickel provides a higher energy density, lowers energy storage costs, and enables longer driver ranges. Regarding lithium, lithium-ion batteries have one of the highest energy densities, have comparatively low maintenance, and have no memory effect.

"The outlook for EV adoption is getting much brighter due to a combination of more policy support, further improvements in battery density and cost, more charging infrastructure being built, and rising commitments from automakers."
BloombergNEF

About Surge Battery Metals

Surge Battery Metals (TSXV: NILI, OTC: NILIF, FRA: DJ5) is an exploration company owning lithium projects in Nevada and nickel projects in British Columbia.

Lithium Projects

Surge Battery Metals owns a 100% interest in 95 mineral claims in Elko County, Nevada. The project area was first identified in public domain stream sediment geochemical data with follow-up sediment sampling and geologic reconnaissance, returning assay results for lithium ranging from 29.1 ppm to 5,120 ppm. Significant results included 89 samples outlining a highly anomalous zone containing sample points greater than 1,000 ppm lithium. The company shared on December 1 strong lithium results from its Nevada North Lithium project. Assay results returned multiple zones of strong values ranging from 1,000 ppm to 5,000 ppm lithium, confirming the potential for a high-tenor lithium clay deposit.

Samples from drill hole NN2201 returned values in the productive clay/silt unit ranging from 1460 to 4500 ppm lithium. The full results from this "discovery" hole have not been received to date and should be processed by the lab shortly.

Results from drill holes NN2206, NN2207, and NN2208 are being processed, and results will be released as they become available. The drill hole NN2206 intersected about 15 meters of the productive clay/siltstone unit. Hole 2207 is drilled 490 meters south of NN2201 cu over 120 meters of the permissive claystone in four horizons. NN2208 cut 72 meters of the productive horizons.


"Our very early-stage Nevada North Lithium Project's target is a lithium clay deposit of the type of Lithium America's Thacker Pass – one of America's largest lithium deposits – and Nevada's Clayton Valley, home to America's only current lithium production."

Surge Battery Metals is involved in two other lithium properties. The Galt property (16 mineral claims) is located in the San Emidio Desert, Washoe County. The company has a property option agreement to earn an undivided 80% interest on the 16 claims. Previous samples showed 68 to 852 parts per million lithium (mean 365 ppm), 5.3 to 201 ppm cesium (mean 72 ppm), and 35 to 377 ppm rubidium (mean 180 ppm). The other project is the Teels Marsh Lithium project. One hundred claims are 100% held.

Nickel Projects

The company recently shared a 43-101 report about the HN4 & N100 Nickel Groups. Surge Battery Metals owns an option to earn 80%, with 20% held by Nickel Rock Resources. The HN4 and N100 have confirmed high nickel values in soil and rock samples and highly elevated magnesium content, usually greater than 15%MG. Rocks partially underlie HN4, like those hosting the Decar Project, in which FPX has invested ~$25M to explore & develop to date.


Share Structure/Financials

Surge Battery Metals possesses a solid share structure and a positive balance sheet for an exploration company. There are 95.5M shares issued and outstanding, 7.3M options, and 15M warrants, for a total of 118M shares fully diluted. The company has $2M in cash, for a total of $5M in total assets, and only $327k in liabilities. The surge was planning a non-brokered private placement financing of 20 million shares for gross proceeds of up to $2 million. On Friday, Surge announced that further in its news release dated December 1, 2022, the company withdrew the proposed private placement. The stock price topped a 52-week high on December 1, reaching $0.31 before closing the day just under $0.28. The stock is far from its 52-week low of $0.04, and recent results should buoy the stock price to go higher. The stock gave its shareholders a significant return on investment, with a 71% gain over the last year and a whopping 243% gain over the previous six months.

Bottom Line

Surge Battery Metals (TSXV: NILI, OTC: NILIF, FRA: DJ5) gains more interest from investors, and we understand why. Recent results are more than promising, and the withdrawal of the private placement shows the board cares about its shareholders. The stock might cool down for a bit, and it should be an excellent time to either accumulate or average down if there is a drop.