"Patience is a Super Power" - "The Money is in the waiting"
Showing posts with label GM. Show all posts
Showing posts with label GM. Show all posts

Saturday, August 16, 2025

If North American consolidation in the REE/Li market is in the cards, AVL looks to be a consolidation lottery ticket!

 

 

Avalon Advanced Materials (TSX: AVL)

Consolidation Driver in the North American REE & Lithium Markets

(Some penny stocks shouldn't be overlooked. I believe AVL is one of those)


1. Strategic Position in REEs

  • Nechalacho Project (NWT, Canada):

    • One of the most advanced REE deposits in North America.

    • 2013 DFS gave an after-tax NPV of ~USD $900M (~C$1.2B).

    • Contains both light and heavy REEs critical for defense, communications, and EV motors.

    • Currently split with Vital Metals (North T Zone) → clear consolidation target for a single operator.

  • AVL’s Basal Zone holds the majority of resources, positioning the company as a natural consolidator or takeover target.


2. Strategic Position in Lithium

https://www.vmcdn.ca/f/files/nob/avalon-advanced-materials-thunder-bay-site-sign-2.png%3Bw%3D960https://www.vmcdn.ca/f/files/nob/avalon-thunder-bay-site-placement-map.png%3Bw%3D960
  • Thunder Bay Lithium Hydroxide Facility (Ontario):

    • 2024 PEA showed C$4.1B after-tax NPV and 48% IRR.

    • Only planned midstream processing hub linking Ontario/Northern lithium deposits with Southern Ontario EV/battery manufacturing.

    • A rare “ready-made” piece of infrastructure for OEMs or lithium miners seeking to capture IRA credits.

  • Lithium Deposits: Separation Rapids (Kenora), Snowbank, and Lilypad → resource pipeline for Thunder Bay facility.


3. Why Avalon is a Consolidation Prize

  • Few companies combine REE + lithium assets in one portfolio.

  • AVL offers both upstream resources (REEs, lithium deposits) and midstream processing (Thunder Bay).

  • Consolidating AVL allows a buyer to secure:

    • Long-life REE supply (Nechalacho).

    • A North American lithium hydroxide plant.

    • Eligibility for U.S./Canadian government incentives under the IRA and Canadian Critical Minerals Strategy.


4. Potential Suitors & Rationale

  • Critical Metals (CRML): Synergy with Tanbreez (Greenland); cross-Atlantic REE strategy.

  • Vital Metals (VML): Logical consolidator of Nechalacho (eliminate split ownership).

  • MP Materials (MP): U.S. REE giant; Avalon secures Canadian REE + lithium foothold.

  • Lynas Rare Earths (LYC): Expansion into North America to diversify from Australia.

  • Lithium Americas / Piedmont Lithium: Thunder Bay plant is the missing midstream link.

  • Tesla, GM, Ford: Direct EV/battery makers securing feedstock & processing capacity.


5. Buyout Valuation & Escalation Potential

  • Current Market Cap: ~C$22–25M (@ ~C$0.04/share).

  • Risk-adjusted strategic value: ~C$300–600M (C$0.50–0.85/share).

  • Likely opening bid: ~C$1/share (~C$637M).

  • If multiple suitors compete: Escalation toward C$1.75–2.10/share (~C$1.1–1.3B).

  • Extreme scenario (Tesla/MP with gov’t backing): Possible bid north of C$2/share if Thunder Bay DFS confirms economics + IRA/Defense contracts lock in demand.


6. Investment Thesis

  • Underappreciated value: Market assigns only ~C$25M to assets with multi-billion NPVs.

  • Strategic location: Canada = politically secure jurisdiction, aligned with U.S. supply-chain policies.

  • Consolidation catalyst: Split ownership at Nechalacho and fragmented lithium supply chain make AVL a natural acquisition target.

  • Bidding war potential: With REE + lithium both on the strategic critical list, more than one suitor is almost inevitable.


Conclusion

Avalon (AVL) is grossly undervalued relative to its assets. From a consolidation standpoint, it represents one of the few opportunities for REE and lithium players to secure a vertically integrated North American platform.

  • Entry today (~C$0.04/share) offers exposure to a potential 25×–50× re-rating if a takeover unfolds.

  • A realistic acquisition could settle around C$1–1.25/share, with upside to C$2/share in a competitive bidding war.


👉 In short: AVL is a textbook “strategic consolidation play” in the REE market, with built-in lithium upside. The mismatch between current valuation and strategic value makes it highly attractive for patient investors — and a natural spark for a bidding war.


The three most likely suitors (MP Materials, Lynas, and CRML) would gain by acquiring Avalon Advanced Materials (AVL), and that could push bidding toward the C$2/share mark.


Takeover Case Comparison: Who Benefits Most from Buying Avalon (AVL)?


1. MP Materials (NYSE: MP)

Profile: Largest U.S. REE producer (Mountain Pass, California), backed by U.S. defense and IRA policies.

What They Gain From AVL:

  • Nechalacho REE deposit: Adds a second North American REE source, diversifying away from Mountain Pass.

  • Thunder Bay lithium hydroxide facility: Midstream processing capacity in Canada → critical for EV battery OEM contracts.

  • Canadian footprint: Strengthens IRA eligibility and helps qualify U.S. automakers for mineral sourcing credits.

  • Geopolitical leverage: Control over both U.S. and Canadian REEs makes MP the undisputed North American champion.

Why They Might Pay Up:

  • MP has the balance sheet (US$5B+ market cap) and political support to pay C$1.50–2.00/share for AVL if it locks out Lynas or CRML and secures Canada as a “REE & lithium fortress.”


2. Lynas Rare Earths (ASX: LYC)

Profile: World’s largest REE producer outside China (Mount Weld mine, Australia), with Japanese government support.

What They Gain From AVL:

  • Nechalacho REE deposit: A second production center outside Australia → diversification + North America expansion.

  • Thunder Bay facility: Processing hub ties them into the EV battery value chain — an area where Lynas currently lacks direct presence.

  • Strategic partnerships: Japanese offtakers (Toyota, Sojitz, JOGMEC) could be extended into Canada.

  • Geopolitical insurance: A hedge against China disruptions and over-reliance on Australia/Malaysia operations.

Why They Might Pay Up:

  • Lynas is under pressure to expand capacity in Western-friendly jurisdictions.

  • Could justify C$1.25–1.75/share, possibly more if MP enters the bidding.


3. Critical Metals Corp. (NASDAQ: CRML)

Profile: Developer of the Tanbreez REE project in Greenland, currently advancing a Definitive Feasibility Study (DFS).

What They Gain From AVL:

  • Nechalacho REE deposit: Complements Tanbreez, giving CRML two of the world’s largest non-China REE resources.

  • Thunder Bay facility: Instant midstream processing — CRML’s missing piece for vertical integration.

  • Lithium exposure: Expands portfolio beyond REEs, adding lithium hydroxide production → higher relevance to EV/battery markets.

  • U.S./Canadian critical minerals politics: Strengthens case for DOE/DoD funding, partnerships, and offtake deals.

Why They Might Pay Up:

  • CRML is smaller than MP or Lynas, so financing a C$1–2/share bid would require partnerships or equity raises.

  • But the strategic synergy is enormous — owning both Tanbreez and Nechalacho could make CRML a takeover target itself later.

  • Likely to bid in the C$1.00–1.25/share range, but might stretch higher if MP/Lynas enter the fight.


Who Would Push the Bidding War Toward $2?

  • MP Materials: Most likely, because of financial capacity and U.S. strategic interest.

  • Tesla or GM/Ford (dark horses): If they step in for vertical integration and secure lithium hydroxide, they could shock the market with a C$2+ bid.

  • Lynas: Would bid aggressively if threatened by MP’s Canadian expansion.

  • CRML: May trigger the bidding, but less likely to win against giants without financial partners.


Investment Takeaway

  • AVL’s unique REE + lithium + midstream combo makes it the only Canadian consolidator play with immediate strategic relevance.

  • Base case: Takeover at C$1–1.25/share (C$637M–800M).

  • Bidding war case: Escalation to C$1.75–2.00/share (~C$1.1–1.3B).

  • Extreme upside: If OEMs or governments step in, C$2.50–3.00/share is possible, though less likely until DFS updates are complete.


👉 This is why AVL at ~C$0.04 today looks like a consolidation lottery ticket



the downside is limited, but the upside is multiples higher if a bidding war ignites

Ed Note: Disclosure: We've been acquiring shares in AVL UCU CRML

Related Articles:

REEs are critical to all cutting edge technologies now and early investors should be rewarded! We just took a small position in our 4th REE stock-CRML


Thursday, March 20, 2025

We've been adding to our Chargepoint position under a buck. Here are some reasons why we like CHPT stock

 


ChargePoint Holdings Inc. (CHPT) remains a significant player in the electric vehicle (EV) charging industry, but it faces both challenges and opportunities as it moves forward.​

Financial Performance

In the fourth quarter of fiscal year 2025, ChargePoint reported revenue of $102 million, bringing the full fiscal year revenue to $417 million. This represents an 18% decrease compared to the previous fiscal year. However, the company's subscription revenue grew by 14% year-over-year to $38.3 million in the fourth quarter, indicating a positive trend in recurring revenue streams. Additionally, ChargePoint improved its gross margin to 28% in the fourth quarter, up from 19% in the same period the previous year.

Strategic Partnerships and Initiatives


ChargePoint has been proactive in forming strategic partnerships to enhance its market position. In December 2024, the company collaborated with General Motors to install up to 500 DC fast-charging ports across the United States by the end of 2025. These stations will feature ultra-fast charging capabilities and ChargePoint's Omni Port technology, accommodating various EV models without the need for adapters.investors.chargepoint.com+12The Verge+12Investopedia+12Investopedia+1The Verge+1

To address security concerns, ChargePoint introduced cut-resistant cables in January 2025. These cables are designed to deter theft and vandalism, ensuring the reliability of charging stations. The company also launched "ChargePoint Protect," a security software that detects tampering in real-time and alerts station owners, further enhancing the security of its infrastructure.The Verge

Market Position and Outlook




ChargePoint continues to hold a strong position in the EV charging market, serving over 4,000 commercial and fleet customers and having delivered more than 87 million charging sessions to date. The company has been expanding its network, with more than 342,000 places to charge across North America and Europe as of March 2022.investors.chargepoint.com+1The Verge+1investors.chargepoint.com+1Wikipedia+1

The EV market is projected to grow substantially in the coming years, with EVs expected to account for 9.9% of new vehicles sold in 2025 and 29.2% by 2030 in the U.S. and Europe. This anticipated growth presents a significant addressable market for ChargePoint.investors.chargepoint.com

Stock Performance

As of March 20, 2025, ChargePoint's stock is trading at approximately $0.70 per share. The stock has experienced volatility, reflecting the company's financial performance and broader market conditions. Analyst opinions vary, with some expressing optimism about ChargePoint's long-term prospects, while others remain cautious due to the company's recent financial challenges.WSJBarron's

ChargePoint Holdings Inc (CHPT)
$0.71
+$0.00(+0.68%)Today
Key Metrics

Open0.70
Day Range0.68 - 0.71
52 Week Range0.56 - 2.44
Volume5.2M

Conclusion

ChargePoint remains a viable company with a solid foundation in the EV charging industry. While it faces challenges such as recent revenue declines, the company's strategic initiatives, partnerships, and improvements in operational efficiency position it well for future growth. The expanding EV market offers substantial opportunities, and ChargePoint's efforts to innovate and adapt to market needs are crucial for its continued success.Stock Titan

Added to our position in Chargepoint (CHPT) this week as growth and growth prospects shine for this first mover in the EV Charging Market!


Monday, June 6, 2011

Ballard fuel cells to power German auto giants new push!

Cutaway illustration of a fuel cell carImage via Wikipedia
Canadian Fuel Cells to Power German Autos2 hours ago by CNW Group
 Daimler has announced that it will outfit its hydrogen fleet with fuel cells produced in Canada. Global engagement in this industry is steadily increasing. In Germany, initiatives like the Clean Energy Partnership (CEP) already have the biggest automakers worldwide onboard.

Both Toyota and Honda recently joined the likes of BMW, Daimler, Volkswagen, GM and Ford in the CEP. Chemical companies involved in hydrogen production and other stakeholders are also involved. Germany Trade & Invest is holding an investor event on June 7 in Vancouver to highlight business opportunities for international companies in Germany's budding fuel cell industry, especially in the growth regions of eastern Germany.

"Germany's economy is booming and the fuel cell industry is on the verge of a major breakthrough. International companies and government initiatives have created the optimal conditions for companies to prosper, especially in Germany's high-tech eastern regions," said Dr. Juergen Friedrich, Chief Executive of Germany Trade & Invest in Berlin.

Daimler, in a joint venture with Ford and Ballard Power Systems, has created a subsidiary called the Automotive Fuel Cell Cooperation (AFCC). At its site in Burnaby near Vancouver, fuel cells for the B-Class F-CELL and the Citaro FuelCell Hybrid city bus will be made. Dr. Andreas Truckenbrodt, CEO of AFCC, along with Geoff Budd of Ballard Power Systems, will highlight the latest developments and business opportunities in Germany at the June 7 event. Alongside some of the auto industry's top players,

  Germany has simultaneously created an excellent framework for investors with generous public programs to support the further development and implementation of fuel cell technology. Funding of EUR 700 million has been made available so far - the biggest program of its kind in Europe. Last month the federal government announced a further EUR 200 million for research in storage technologies including fuel cells.

Germany already features over 300 companies and 65 research institutes specializing in fuel cell technology as well as 70 percent of Europe's fuel cell fleet. Germany Trade & Invest is the foreign trade and inward investment promotion agency of the Federal Republic of Germany. The organization advises foreign companies looking to expand their business activities in the German market. It provides information on foreign trade to German companies that seek to enter foreign markets.

To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/June2011/06/c9652.html
SOURCE: Germany Trade and Invest
SOURCE: Auto News

Germany Trade & Invest Andreas Bilfinger Email:andreas.bilfinger@gtai.com T:
+49(0)30-200099-173 F: +49(0)30-200099-111
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