In addition to our news release of October 21, 2021 ( https://noweaenergy.com/clean-green-european-mining-project/ ) we would like to share additional information we received from the management of our investment in a potential boron lithium mine project.
Boron Lithium Mine Project / Shareholder Structure:
First we would like to make the following statement: This boron lithium mine project is a very complex and extremely large project. A wide variety of interests from several parties need to be coordinated. NOWEA ENERGY INC. with a current stake of 10% is not a majority shareholder. This means that NOWEA ENERGY INC. has to comply with the decisions of the majorities within the scope of its participation. NOWEA ENERGY INC. is also subject to strict and restrictive confidentiality. Therefore NOWEA ENERGY INC. is unfortunately not allowed to inform the public in the way it would like to and detailed information may not (yet) be disclosed. We ask for your understanding.
Exploration Drilling, NPV Net Present Value:
We are therefore pleased to inform that a total of 61 exploration wells over a distance of almost 16,000 meters have been finalized in the meantime. Of these, a total of 50 exploration wells over a total length of more than 12,000 meters could be drilled in 2021. Based on the available results, the planned mine is expected to be able to produce a maximum of 250,000 tonnes of boron oxide and 25,000 tonnes of lithium carbonate per year. The 10-year net present value (NPV) is currently estimated to be between US$1.0 billion and US$2.0 billion, resulting in an internal rate of return of 28-34%.
Private equity company joined as strategic investor:
We are further pleased to inform that in the meantime an internationally operating private equity company (approx. EUR 3 billion turnover in operating business in 2020) has joined the mining company as main shareholder. The portfolio of this company includes some of the most innovative European companies active in the field of e-mobility and energy transition. This should generate further tactical and strategic added value and will accelerate the development of the mining company.
We are also pleased to inform that the updated evaluation of the mining company by PwC Pricewaterhouse Coopers is expected next month. As PwC is working very carefully, the scenarios and possible valuations are each cross-checked by external specialists. PwC is therefore dependent on timely input. Unfortunately, this is not always the case and delays have already occurred and may occur in the future. Nevertheless, the assessment is nearing completion. However, quality goes before haste.
Market Environment / Analyst Opinions:
Simple numbers make it impossible not to be optimistic about lithium in the long term. Worldwide today there are 1.4 billion cars on the roads, and currently only about 10 million of them are electric cars.
"The oil of the 21st century" - that's how many analysts now refer to this raw material, which strictly speaking is not an energy raw material at all, but a light metal: Lithium. But in terms of importance, lithium is actually outstripping oil. Without lithium, nothing works in electricity storage. Complete electromobility is inconceivable without this raw material. The bad news is that while the market was oversupplied just two years ago, lithium is short now. So scarce, in fact, that prices have reached a new record high. The world market price for lithium carbonate has risen by around 200% in the past 12 months; and the trend is still upwards - and from our point of view, this is: very good news.
A rush of lithium mergers and acquisitions is on the cards for 2022, following deals worth more than US$8 billion in 2021, analysts say, with major ASX-listed miners increasingly competing with Beijing-backed players to expand their exposure to the battery metal. It remains exciting. Jack Gabb, metals and mining analyst at Bank of America, spoke of a "scramble for resources" on the back of a strong fundamental outlook for lithium demand.
Our investment portfolio in general:
In addition to these positive developments in our "main investment", there has also been quite positive progress in our investment portfolio "Oil and Gas projects, USA". Further information will be provided in near future.