While the pandemic tanks oil and gas, decimating demand, and even precious metals aren’t feeling the safe-haven love they’re used to, critical minerals have become the holy grail, and one, in particular, could become the post-pandemic tech gold.
Oil prices are still free-falling, even after an OPEC+ deal ended the oil price war.
Gold prices are up 7% so far in April, but it’s still nothing for the once-favored safe-haven asset, and UBS expects a reversal soon.
Critical metals, on the other hand, will inform world technological superiority, and when the dust settles on the coronavirus pandemic, the battle for world domination will continue with a fury like never before, spurred on by national security interests.
But one of these metals is so critical, and so rare, that it’s very hard to put a price on it.
That metal is cesium, and it’s essential to America’s quest to win the 5G race--the No. 1 most important global competition so far this century.
Yet, America has none.
That fact makes one particular junior miner--Power Metals (TSXV:PWM,OTC:PWRMF)--potentially one of the most critical companies in this space to emerge from the COVID-19 crash.
Why? Because it just started drilling in February for the only potential cesium mine that China doesn’t already control.
In August 2018, while exploring for lithium, PowerMetals discovered pegmatites at West Joe Dyke and intersecting high-grade cesium mineralization in six drill holes.
Why Cesium Is Immune To Pandemic
Cesium is immune because its applications are critical to almost everything that comes next, including advances in healthcare, defense, and the 5G revolution.
For the healthcare industry, it’s vital in strategic organic chemistry, including in x-ray radiation for cancer treatments.
For the oil and gas industry, it’s vital for drilling fluids that prevent blow-outs in high-temperature, high-pressure wells.
For a huge lineup of commercial and industrial, cesium’s applications are many and varied, from catalyst promoters, glass amplifiers, and photoelectric cell components, to crystals in scintillation counters, and getters in vacuum tubes.
But in terms of world dominance, it’s all about time, and 5G. It’s the “cesium standard” that allows us to measure time accurately. That means it’s the key to mobile networks, the internet, and GPS.
This also means that without cesium, the global 5G war cannot be won.
For the most part, the average person only has a cursory understanding of what 5G means, and how it could transform the global balance of power. But 5G without cesium doesn’t work. The new 5G cellular wireless tech will transfer data and the correct time faster than ever before--fast enough and accurately enough to transform industries.
In other words, 5G technology will rule the world because it can create a continuous, real-time connection for every single device that exists and every single device that will be made because of it. For digital healthcare, it will forge advancements in real-time connections for the biggest advances in things like pacemakers, among many other things.
Cesium is a critical element in all of this, and it could mean the difference between real-time responsiveness and 5G failure.
The battleground for 5G is also a battleground for cesium, and so far, China is winning by a landslide.
But while cesium is completely insulated from a global pandemic such as that taking down every other industry in the world, from a North American perspective, it matters little that it’s insulated or not when China controls almost 100% of the world’s supply.
The China Problem
When the dust settles on the coronavirus pandemic, the world isn’t likely to be more unified or to view cooperation as the new way forward. Instead, China particularly is more likely to pursue policies that are more focused on national security than ever.
Washington’s battle against China’s 5G giant, Huawei, may have seemed petty to some, but this is the United States’ way of playing catchup when it dropped the ball on critical metals like cesium. While the US refused to play along with China’s Huawei-led plans for 5G domination, Europe was embracing the giant. COVID will likely change that, too. Right before the pandemic, the UK had agreed to allow Huawei to build out the country’s 5G networks, and Germany and France were on the cusp of similar deals. These deals would have given Beijing a strategic hold on European 5G, not to mention European telecoms in general.
COVID-19 has the potential to put the brakes on this Chinese progress in Europe, but North America still has a major cesium problem to deal with.
Beijing is well aware of the power it holds through its monopoly of critical metals.
Cesium was only added to the United States list of critical minerals in 2018 despite the fact that it will lead the 5G revolution, a revolution that will generate trillions of dollars in new products along the way.
Despite the fact that it is so strategic, there are only three pegmatite mines in the world that can produce it: Tanco in Manitoba, Bitika in Zimbabwe, and Sinclair in Australia. Two of them, Tanco and Bitika, are no longer producing, and the stockpiles at Tanco and Sinclair are largely controlled by China.
Not only is there limited supply, but there are a very limited number of companies in the supply chain itself.
That positions Power Metals to potentially be a major North American supplier of cesium right at the crucial moment in the 5G revolution. Known for its major hard rock lithium deposit in Canada, Power Metals hopes to very soon be known as the company that broke China’s monopoly on the critical metal.
Power Metals is sitting on what could become only the fourth deposit of its kind in the world, with 100% ownership in the Case Lake property in Northeastern Ontario, where it has made a discovery of high-grade cesium mineralization.
The company discovered the pegmatites at West Joe Dyke in August 2018, intersecting high-grade cesium mineralization in six drill holes when it was targeting lithium instead.
In February, right before the COVID-19 outbreak turned into a pandemic, Power Metals started drilling, and it’s world-class geologist, Dr. Julie Selway, says the three properties the company is drilling are hoped to have similar finds to the strategically important Sinclair mine in Australia.
“They are shipping their resource, which they say is higher than 10% cesium-oxide, and ours have some that are between 12% and 14% of cesium-oxide,” Selway, a key geologist for the Ontario Geological Survey during the tantalum boom of the early 2000s, and now VP of exploration for Power Metals, told Oilprice.com.
Power Metals has intersected cesium (Cs) mineralization in 6 drill holes on West Joe Dyke, with “exceptionally high-grade” Li and Ta intervals. They also found Cs mineralization in drill core samples in the first new dyke below Main Dyke, as well as in the drill core in Northeast Dyke.
Now, they’re working to expose, sample and assay that cesium mineralization on the surface outcrops to find more cesium-bearing pegmatite dykes nearby. When and if they do, it stands a good chance of disrupting the Chinese control of cesium to give North America a leg up in the 5G war, and beyond.
While cesium may just be the most critical of critical metals, it’s worth taking note of some of the others fueling the next generation of technology, as well.
Other companies looking to capitalize on the renewed race for critical metals:
Teck Resources (NYSE:TECK, TSX:TECK)
Teck Resources is Canada’s largest diversified mining company. It has operations across North and South America. It will play a key role in the emerging battery metal revolution, as a key supplier of both copper and zinc. Not only is Teck resources diverse, it also has a long history of success in the metals market.
One of Teck’s lesser known strengths lays in its production of three metals essential in semiconductors and transistors. Teck is one of the world’s largest producers of the lesser-known but incredibly important metals, germanium and indium. Without these, the technological revolution would be at a stand-still.
Turquoise Hill Resources (NYSE:TRQ ,TSX:TRQ)
Turquoise Hill Resources is another Canadian miner with an international reach. It primarily produces gold and copper, two essentially resources in the tech boom, but it also producers uranium, rhenium, and molybdenum which are often overlooked in today’s major metals markets.
While most people know that uranium is absolutely essential in today’s nuclear power generation, they may not know much about rhenium and molybdenum. These two elements also play a critical role in our development of cleaner energy, and will likely grow in demand over time.
Magna International (NYSE:MGA, TSX:MG)
Magna International is may just be one of the more underappreciated players in the critical metal showdown. While it doesn’t produce metals itself, it is a leading supplier of mobility technology for automakers. That means it uses a lot of these metals, and its secure supply chain and partnerships in the space are incredibly important.
With operations in over 27 countries, Magna has the potential to supply every automaker in the world, and they’re well on their way in doing so.
Agnico Eagle Mines Ltd (NYSE:AEM, TSX:AEM)
Agnico Eagle Mines is one of Canada’s top gold producers. And while did not make the critical metals list, there is a huge push for it to be included. Why? Because the iconic yellow metal is not only used in numerous electronics, but it also carries tremendous geopolitical weight. Just last year, a number of countries, including China and Russia, stockpiled gold in record amounts.
Though gold is a flashy metal often associated with wealth, it is also one of the world’s most widely beloved safe haven assets. To put it simply, gold fares well in times of crisis. And it always has.
Pretium Resources (NYSE:PVG, TSX:PVG)
Like Agnico, Pretium is another one of Canada’s premier gold miners. Pretium has an impressive portfolio and if you can catch the stock while the price is right, there could be huge opportunity for upside. Additionally, construction and engineering activities at its top location continue to advance, and commercial production is targeted for this year.
With things seemingly taking a turn for the worst on a global level, Pretium’s forwarding thinking approach leaves it in a prime position to weather the storm and emerge even stronger than ever before.
By. Lynsay Birdall