Patriot Battery Metals and Volkswagen Partner Up on Canadian Lithium

However anyone feels about the improbable political comeback of Donald J. Trump, it underscores the next leg in what Neil Howe describes as a Fourth Turning. 

There will be a lot of volatility but there is also the potential for a lot of opportunity. 

Which brings me to big news out of the James Bay region this morning and its leading lithium explorer Patriot Battery Metals (TSX: PMET) (OTCQX: PMETF).

The company announced this morning that Europe's largest car manufacturer,  Volkswagen Group, through its holding and financing company, Volkswagen Finance Luxembourg S.A., will invest C$69 million to acquire 9.9% of Patriot's issued and outstanding common shares.

At a 65% premium to the 30-day average. No warrants, no broker fees. 

The deal is a transformational deal for not only Patriot but the entire region.

The details are important. They include a binding offtake commitment to be entered into with Volkswagen's 100%-owned vertically integrated battery manufacturer, PowerCo SE, to supply 100,000 tonnes of spodumene concentrate (SC5.5 target) per year over a 10-year term, representing ~25% of the estimated Stage 1 or ~12.5% of combined Stage 1 and Stage 2 production from the Shaakichiuwaanaan Lithium Project in Quebec.

Offtake is expected to supply PowerCo's cell production activities in Europe and North America , including its battery cell factory in St. Thomas, Canada, with production capacity of up to 90 GWh.

That detail is important. I’ve been banging the table that the need to establish independent critical metals supply chains would demand a premium for projects with scale in top-notch jurisdictions.

Which is why the two companies are also entering into a Memorandum of Understanding ("MOU") signed to establish an ongoing strategic relationship between PowerCo and Patriot to jointly explore and collaborate on shared strategic objectives, including opportunities for the future development of the Shaakichiuwaanaan Project centred around establishing a cost-competitive, sustainable, and ESG-compliant battery supply chain that will attract government support and incentives and the potential development of a chemical conversion facility (emphasis mine).

Last but not least, there’s this nugget: Following completion of the Feasibility Study for the Shaakichiuwaanaan Project, Volkswagen may contribute additional financing to support the Shaakichiuwaanaan Project in return for additional offtake on terms to be mutually agreed.

There is massive exploration upside on an already world-class project with both open-pit and underground high-grade options. There is community support, there is governmental support, and now there is a dance partner that just issued a shot across the James Bay bow.

2025 is going to be a transformational year whether it’s lithium, copper, gold, silver, uranium, crypto, etc. There is opportunity to be had amongst the coming volatility. 

Let’s get it!

Gerardo Del Real

Gerardo Del Real
Editor, Daily Profit Cycle