A battery metals play with a green twist that has significant early revenue and profit potential
The founding principle of the business was straightforward: the rise of the electric vehicle (EV) would inevitably put a strain on the constituent elements that go into the power units.
Stanbury also knew that one important commodity – cobalt – presented challenges given 70% of the world’s output comes from the Democratic Republic of Congo, one of the most difficult places in the world politically to operate.
This why he acquired around 14,000 acres in Idaho, prospective for the metal in a market that was ready to explode.
What he hadn’t expected at the time was for the Americans, obsessed with energy security, to be so slow on the uptake.
“While the market has grown exponentially in the last five years, I was surprised how little homegrown production there was,” says chief executive Stanbury.
Four high-potential projects
Idaho is one of four resource projects. The others cover the battery metals waterfront – nickel, copper, cobalt and lithium. Two are close to the European market where mineral can be shipped cheaply and easily to end-users.
The outlier, a nickel-copper-cobalt deposit in Cameroon, is in one of Africa’s most business-friendly countries with access to developed export facilities.
All are in the sweet spot of the current commodities boom. For example, demand for lithium continues to outweigh supply, which means the prices are only headed in one direction – up.
The boom in the copper market has seen the price of the red metal double in value in the past year, while benchmark cobalt prices have surged 65% so far in 2021.
As for the TM’s assets, each one has the potential to be a company-maker.
It owns the Emperium Project, one of the largest land positions along the famous Idaho Cobalt Belt; a dormant nickel-copper-cobalt mine in Northern Spain; a lithium deposit in Ireland; and a near-surface orebody in Cameroon, where it is hunting for lookalikes.
Adding value to assets
“The idea is to is to add value and get them far enough along where we might look for vend-in partners; we have different ideas [for each asset],” says Stanbury.
In Ireland, for example, the Leinster Massif, is ‘downstrike’ from a pegmatite-hosted lithium project being developed by China’s Gangfeng, which is “proactively chasing blocks”.
“If we get good results [in Ireland] they may look to take us out,” says Stanbury.
Collectively, the assets, which are in the formative stages of development, have an attributable value of around £21mln, which will grow rapidly as their potential is unlocked by drill programmes and possible partnerships.
The real near-term kicker, and one that has significant upside, is the company’s Recyclus business, which owns technology that allows it to recycle both lead-acid and lithium-ion batteries.
The opportunity is a potentially huge one with batteries posing a major waste headache and lithium-ion manufacturers for the first time scrambling to use reconstituted material with basic battery metals in short supply.
Recyclus plans to grow from an initial 10,000 tonnes of lead-acid capacity to 60,000 tonnes in five years and to 20,000 tonnes from 5,000 in the lithium-ion space in the same time-scale.
At the moment it is looking at a site in Teesside for the former and Coventry for the latter.
TM is raising pre-IPO funding to invest in the plant build-out. By the time it joins the market in the summer it hopes to have banked £5mln, with a further £1mln arriving via the listing in London.
The potential returns from the investment prompt a double-take. In year one, TM is predicting Recyclus will turn over £9.6mln, rising to £28.5mln and then almost £55mln by year three. It will be profitable by year-two, the company reckons with net earnings of £5.4mln, rising then to £15.3mln.
The top-line could grow to £220mln by year five, TM estimates. That sort of growth could propel the group into the ranks of the mid-caps very quickly.
“There’s going to be a lot of news flow….This is going to be huge, exciting, first-to-market story,” says Stanbury.
For more information on the IPO click this link.
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