Earlier this month, Grounded Lithium Corp. (GRD:TSX.V; GRDAF:OTCQB) announced it had purchased a large extension to its existing landholdings on the Kindersley Lithium Project, its 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 its potential for production.
The company is also expanding the duties of one of its 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 extraction 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). It commissioned an updated National Instrument 43-101 Standards of Disclosure for Mineral Projects report with the acquired properties, which now estimates total lithium carbonate equivalent inferred resources at 4.2 million tons.
Koby Kushner of Red Cloud Securities said, "This new acquisition has turned out to be accretive as the company was quickly able to define a resource on the new ground by leveraging its knowledge of the surrounding project area."
According to the company, it purchased the land for CA$425,000, which it believed to be highly accretive when compared to the value of the estimated lithium in the new land and to the company’s current valuation. This was paid in CA$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.
On March 17, 2023, Koby Kushner of Red Cloud Securities said, "This new acquisition has turned out to be accretive as the company was quickly able to define a resource on the new ground by leveraging its knowledge of the surrounding project area. It is also a testament to management's ability to move fast."
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.”
According to an interview with investors by Stockhead, lithium may have been somewhat overhyped, but demand is once again on the rise.
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 Echelon 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 U.S. Treasury Department recently amended the 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 Toward 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, the opportunity must meet economic, geological, and valuation hurdles. Grounded Lithium is also looking to select a method of lithium extraction as it looks toward developing its untapped holdings.
Stonegate Capital Partners analyst Dave Storms commented, "We expect Grounded to be on the cusp of an inflection point. It is our view that the company will rerate upwards prior to the completion of its preliminary economic assessment (PEA),"
In the short term, Grounded Lithium is looking to complete a number of initiatives, including the results of detailed lithium extraction tests that were announced in March with selected third parties 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 expects to 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, subject to financial resources.
In a March 16th research note, Stonegate Capital Partners analyst Dave Storms commented, "We expect Grounded to be on the cusp of an inflection point. It is our view that the company will rerate upwards prior to the completion of its preliminary economic assessment (PEA)," noting Grounded's current share price was about CA$0.35 at the time of the report.
Ownership and Share Structure
Streetwise Ownership Overview*
Grounded Lithium Corp. (GRD:TSX.V; GRDAF:OTCQB)
Grounded Lithium has CA$3 million in the bank, as per its last financing in the fall of 2022, and says that the company has the financial resources to address its short-term catalysts. They report no set monthly drilling costs.
Insiders own 14% of the company with about 9.6 million shares. According to Reuters, President and CEO Gregg Smith is the largest shareholder in management at 3.06%, with 2.13 million shares. SVP Corporate Development and CFO Greg Phaneuf has 1.76%, with 1.23 million. VP Land and Regulatory Lawrence Fisher has1.27%, with 0.88 million, and VP Geophysics and IT Wayne Gaskin has 0.77%, with 0.53 million.
Institutions own approximately 17% of the company, though none own more than 10%, so names are not publicized. Grounded Lithium reports no strategic investors, and the rest is in retail.
Grounded Lithium has 12,000,000 public warrants at CA$0.50, and 2.3 million finder warrants from previous financings at an effective price of CA$0.19.
The company 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 US$17 million. There are 69,656,423 shares, 14,351,862 warrants, and 8,883,100 options. According to Market Watch, Grounded Lithium trades in the 52-week range between CA$0.22 and CA$0.50.
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1) Amanda Duvall wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports. 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.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Grounded Lithium. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with None.
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