PLL - Canadian Lithium Overview And Why Stria Lithium Might Be An Undervalued Investment Option

2024-03-26 04:10:12 ET

Summary

• A series of recent events have positioned Canada as one of the most promising places in the world to further develop the lithium value chain.
• A review of lithium in Canada is carried out to analyze the lithium potential of the country, the current policy and regulatory environment and the impact of the IRA.
• The main ongoing lithium projects in Canada are thoroughly described and classified for a comparative analysis of Stria Lithium Inc.’s Project, vis-à-vis other projects at similar stages of development.
• In this context, a novel method is utilized to show why Stria could be considered at present Canada’s most undervalued lithium company.
• The article closes with comments on some compelling reasons why Stria Lithium Inc. could be seen as an interesting investment option in the lithium space in the months and years ahead.

1. Review of the state of lithium in Canada

1.1 Lithium potential in Canada

In Figure 1, the critical mineral opportunities in the different regions of Canada are presented. Note that lithium is located only in two provinces of the country: Québec and Alberta. This proves to be a condensed picture of Canada's actual lithium potential, as will be seen later. Furthermore, no discussion is given regarding any byproducts that could be present in those deposits. Based on a cursory examination of official information , at least three more jurisdictions besides Québec and Alberta are seen to have lithium projects: Ontario, Manitoba, and Saskatchewan (See Figure 2). When we examine the ongoing Canadian initiatives that are being developed, this will become clearer.

Canada’s lithium potential is seen in Tables 1 and 2, where, globally, Canada appears in eighth position (together with DRC) in lithium resources and sixth place in lithium reserves.

There is no doubt that the potential of lithium in Canada is great. However, it all indicates that we will still have to wait for a few years for its complete takeoff. In Table 3, where the world lithium production in 2023 is shown, it ranks, together with Zimbabwe, in the sixth position. This reflects an important improvement over the previous year when it only produced 520 metric tons of contained lithium. Note that, the only production of lithium registered in 2022 was as a by-product of tantalum at the Tanco Mine in Manitoba. This operation was discontinued in 2023 followed by the restart of operations of the Sayona Lithium Project in Québec. In what follows, we describe the major advances in policy and regulatory framework as well as the role that the Inflation Reduction Act (IRA) enacted by the US played (and could play) in the years to come in accelerating the pace of lithium mining, refining, and industrialization in Canada.

1.2 Policy and regulatory framework

In 2022, the Canadian Critical Minerals Strategy was launched. Its main objectives include: 1) Supporting economic growth, competitiveness, and job creation; 2) promoting climate action and environmental protection; 3) advancing reconciliation with indigenous peoples; 4) fostering diverse and inclusive workforces and communities; and 5) enhancing global security and partnerships with allies....

For further details see: