Mining
Project Generators: Exploration Risk for a Lower Cost
Project Generators: Exploration Risk for a Lower Cost
Sponsored by: Altus Strategies
In a bear market for junior miners, exploration capital can be hard to come by. However, one type of company strategy does its best to bypass this risk and fund multiple projects without having to constantly raise capital through equity.
Enter the Project Generator model. How does it work? Basically, a company gets more established companies with substantial capital to joint venture on its wide portfolio of properties. The funding companies have the money to spend and may not have a depth of exploration projects themselves. Therefore, it can be a perfect match for both parties.
The downside of this model is that shareholders of the project generator do not get all of the discovery upside, but the benefits are still quite numerous. First, it decreases dilution risk by having much of the exploration capital provided by majors and midtiers. Also, it spreads the odds of making a discovery to a portfolio of multiple properties and commodities, rather than just focusing on one which may or may not work out. Last, by having the big boys come in on projects, shareholders have reassurance of the technical validity and due diligence of prospects.
There is some very supportive data for the model as well. Over the last five years, shares in project generators are up 121% while shares in listed juniors (under $50 million market cap) are down -55%. Project generators also have more skin in the game (11.0% vs. 7.6%) and are able to secure more overall funding on average.
Mining
Why Copper and Nickel Are the Key Metals for Energy Utopia
With more renewables and EVs plugging into the grid, copper and nickel are essential building blocks for the energy transition.
Copper and Nickel: The Key Metals for Energy Utopia
The raw materials required to transport and store clean energy are critical for the energy transition. Copper and nickel are two such metals.
Copper is essential for the transmission and distribution of clean electricity, while nickel powers lithium-ion batteries for EVs and energy storage systems.
The above infographic sponsored by CanAlaska Uranium explores how copper and nickel are enabling green technologies and highlights why they are essential for a utopian energy future.
Copper: Transporting Clean Energy
When it comes to conducting electricity, copper is second only to silver. This property makes it an indispensable building block for multiple energy technologies, including:
- Electric vehicles: On average, a typical electric car contains 53kg of copper, primarily found in the wirings and car components.
- Solar power: Solar panels use 2.8 tonnes of copper per megawatt (MW) of installed capacity, mainly for heat exchangers, wiring, and cabling.
- Wind energy: Onshore wind turbines contain 2.9 tonnes of copper per MW of capacity. Offshore wind turbines, which typically use copper in undersea cables, use 8 tonnes per MW.
- Power grids: Copper, alongside aluminum, is the preferred choice for electric transmission and distribution networks due to its reliability and efficiency.
BloombergNEF projects that, due to its expansive role in clean energy, the demand for copper from clean energy applications will double by 2030 from 2020 levels. The table below compares annual copper demand from clean energy, in tonnes, in 2020 vs. 2030:
| Year | Power Grids | EV batteries | Wind | Solar | EV charging | Total (tonnes) |
|---|---|---|---|---|---|---|
| 2020 | 1,700,000 | 210,000 | 165,000 | 83,000 | 4,200 | 2,162,200 |
| 2030P | 2,000,000 | 1,800,000 | 352,000 | 104,000 | 47,100 | 4,303,100 |
Although power grids will account for the largest portion of annual copper demand through 2030, EV batteries are projected to spearhead the growth.
Nickel: Powering Lithium-ion Batteries
Nickel is a key ingredient in lithium-ion batteries for EVs and stationary energy storage systems. For EVs, nickel-based cathodes offer more energy density and longer driving ranges as compared to cathodes with lower nickel content.
According to Wood Mackenzie, batteries could account for 41% of global nickel demand by 2030, up from just 7% in 2021.
| End-use | 2021 % of Nickel Demand | 2040P % of Nickel Demand |
|---|---|---|
| Stainless steel | 69% | 45% |
| Battery precursors | 7% | 41% |
| Other | 24% | 14% |
Nickel-based cathodes for lithium-ion batteries, including NMC (Nickel Manganese Cobalt) and NCA (Nickel Cobalt Aluminum), are prevalent in EVs and make up more than 50% of the battery cathode chemistry market.
A Bright Future for Copper and Nickel
Both copper and nickel are essential building blocks of EVs and other key technologies for the energy transition and ultimately energy utopia.
As more such technologies are deployed, these metals are likely to be in high demand, with clean energy applications supplementing their existing industrial uses.
CanAlaska is a leading exploration company with a strategic portfolio of uranium, nickel, and copper projects in North America. Click here to learn more.
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