The United States is in dire need of domestic energy minerals. Metals like nickel, copper, and cobalt are critical components of America’s energy storage infrastructure, making up 15.7% (64lbs), 10.8% (44lbs), and 4.3% (10lbs) of EV batteries, respectively.
However, the US imports virtually 100% of its consumed nickel despite the average lithium-ion battery requiring 5x more nickel than lithium. By 2030, Indonesia and China are projected to control 71% of the nickel market, highlighting a major weakness and global dependence on the prevailing American economy.
With the US Government striving for energy security in an environmentally sustainable way, significant changes are necessary to meet the stringent requirements outlined in the Inflation Reduction Act. For this reason, an S&P Global study projects that US demand for nickel, cobalt, and lithium will be 23x higher in 2035.
But who will US manufacturers turn to if they plan on meeting their energy storage objectives?
Alaska Energy Metals (CA: AEMC.V)(USA: AKEMF) offers a solution as a domestic explorer of key energy metals in Alaska’s tier-1, pro-resource jurisdiction. The company’s 100%-owned Nikolai Project contains an indicated 3.9 billion pounds of nickel (US$33.86 billion at $8.7335/lb (04/30/2024)), 1.3 billion pounds of copper, and other rare earth minerals, making it one of North America’s largest nickel deposits.
As the US pushes for greater energy dependence, AEMC is positioned perfectly to support this long-term production strategy. With a market cap of CA$13 million, it is in rare territory for investors seeking to capitalize on the energy boom before it goes parabolic. To understand why AEMC looks attractive and undervalued at its current valuation, continue reading below.
Business Overview: AEMC’s 100%-Owned Nikolai Project
Nickel is a fundamental component of America’s energy storage infrastructure. It offers many technical advantages including a high energy density, long cycle life, and high safety performance. This makes it an excellent choice for manufacturers aiming to deliver the highest quality batteries.
But nickel is difficult to obtain and most international suppliers (e.g. China and Indonesia) fail to meet the ESG standards set by the US Government. This puts major constraints on the US nickel supply causing it to be one of the most highly sought-after minerals; on the US’s medium-term (2025-2035) criticality matrix, it ranks as one of the highest supply risks to energy-importance metals in the world.
That is why businesses like Alaska Energy Metals are indispensable to the US economy. Their nickel deposits offer a plentiful supply of high-quality nickel that is dependable, accessible, and sustainable. Without it, the US would be facing a massive mineral shortage that would up-end its ambitious clean energy initiatives.
But, even more important, AEMC’s research and exploration efforts provide mining institutions and battery manufacturers with key insights into its mineral deposits, both in quality and scale.
In March 2024, the company released its updated NI 43-101 Mineral Resource Estimate (MRE) that analyzed the economic potential of its Nikolai Project. This was the product of a 2023 drill program consisting of eight diamond drill holes totaling 4,138 meters (13,576 feet) in the Eureka Zone, and the acquisition of an extensive database that contained data on 35 historical drill holes performed between 1995 and 2012.
The results of the company’s updated NI 43-101 Mineral Resource Estimate were as follows:
Indicated MRE:
- 813 million tonnes grading 0.29% NiEq containing:
- 3.877 billion pounds (1.758 million tonnes) of nickel
- 1.276 billion pounds (578,783 tonnes) of copper
- 303 million pounds (137,438 tonnes) of cobalt
- 4.0 million ounces of platinum, plus palladium and gold
Inferred MRE:
- 896 million tonnes grading 0.27% NiEq containing:
- 4.225 billion pounds (1.916 million tonnes) of nickel
- 1.040 billion pounds (471,736 tonnes) of copper
- 327 million pounds (148,324 tonnes) of cobalt
- 3.4 million ounces of platinum, plus palladium and gold
From the updated MRE, Alaska Energy Metals introduced 813 million tonnes of indicated resource; increased its inferred resource by 180%; reduced the Eureka Zone’s strip ratio from 3.7:1 to 1.5:1 (improved the project’s economics, and lowered its carbon footprint); and identified a higher-grade core zone at a grade of 0.34% NiEq. They are doubling down on these efforts with another drilling campaign (15,000m) planned in 2024.
Combined, these investments in exploration showcase the significant value that the Nikolai Project has to offer. With this information, mineral extractors, battery manufacturers, and the US government can maximize these strategic deposits to their fullest potential.
As this is one of two projects Alaska Energy Metals owns (i.e. Angliers-Belleterre nickel-copper project, Quebec), the company is expected to add a meaningful supply to its already impressive energy mineral asset base. With the technical expertise to match, AEMC is poised to capitalize on these domestic infrastructure developments.
Exploring Alaska Energy Metals’ Leadership Team
Spearheading Alaska Energy Metals’ operations and project development is President, CEO, and Director, Greg Beischer. Greg is a seasoned explorationist with over 30 years of experience as a geologist and mining engineer technologist.
Mr. Beischer’s connections to Alaska’s mining industry date back to 1995 when he explored the Nikolai Project’s deposits with INCO; the same property AEMC owns today. During this time, he developed extensive expertise in the geology of magmatic nickel-copper–platinum deposits.
Leveraging his experience, he then worked with the Bristol Bay Native Corporation where he forged strong connections throughout Alaska’s mining industry. Mr. Beischer is the past President of the Alaska Miner’s Association, sits on the Board of Alaska’s Resource Development Corporation, and serves on the Alaska Minerals Commission. He is also the founder of Millrock Resources, a successful project generator corporation that raised over US$50 million from major mining companies, junior explorers, and investors in a 15-year.
As you can see, Mr. Beischer’s technical expertise, executive experience, and close ties to Alaska’s mining industry make him the ideal candidate for leading Alaska Energy Metals. With a proven track record, one can have confidence knowing that he serves shareholders with integrity and delivers on the objectives laid out by the company.
What is Alaska Energy Metal’s Biggest Risk?
Indonesia and China’s reign over the nickel market is ending. But it does not mean they will not put up a fight. With the United States Government waking up to its mineral dependencies and the environmental risks posed by international players, the nickel duopoly of Indonesia and China is making one last-ditch effort to maintain its market dominance.
According to Rick Mills via Mining.com, Indonesia and China are pushing the supply of nickel into a surplus to drive down the price and weaken global competition. This has had an adverse effect on the nickel market at large forcing many producers to write down their business in the near term.
However, this negative price pressure won’t last forever. China and Indonesia’s production pump is a short-term solution that will hurt them and bode well for companies like Alaska Energy Metals over the long run.
This case study highlights why the United States must seek out domestic suppliers and how some international players fail to respect the environment in pursuit of profits. However, market manipulation will one accelerate the government and industry’s ambitions to reduce their dependence on international suppliers while promoting more ethical business practices that benefit all of human civilization.
A clean energy revolution is inevitable. The Inflation Reduction Act commits more than US$365 billion in energy security and climate change programs and the US government is working diligently to onshore an integrated nickel to EV supply chain by 2027.
Though Indonesia and China may push down prices for now, it is clear that consumers and producers must adopt a more environmentally conscious approach. If countries fail to consider the consequences of unethical business practices, they must accept that their operations will be unsustainable in the long run.
On the other hand, organizations like Alaska Energy Metals which comply with environmental regulations and provide a cleaner source of nickel, offer the best solution for meeting the United States’ energy and climate objectives. While they may have to endure a few short-term headwinds, there is no denying that domestic explorers and miners stand to benefit the most from this transition in the end.
Final Thoughts: Should You Add AEMC to Your Radar?
Investing in a domestic supply of energy metals is fundamentally important to the United States both from a strategic and environmental perspective. With an indicated 3.9 billion pounds of nickel and a total inferred resource of 896 million tonnes (@ 0.27% NiEq), Alaska Energy Metals is a key supplier for both the US government and battery manufacturers at large.
At a market cap of just CA$13 million, and one of the largest nickel deposits in the North American market, the company seems grossly undervalued and poised to benefit tremendously from the investments and incentives laid out in the Inflation Reduction Act. This will be further catalyzed by the company’s 2024 drilling campaign, which will unlock more value for AEMC through its Nikolai Project. Moreover, the Angliers-Belleterre nickel-copper project serves as an additional strategic asset that will bolster the business further into the future.
If you’d like to learn more about Alaska Energy Metals (CA: AEMC.V)(USA: AKEMF), you can access its website here.
Disclosure/Disclaimer:
We are not brokers, investment, or financial advisers; you should not rely on the information herein as investment advice. If you are seeking personalized investment advice, please contact a qualified and registered broker, investment adviser, or financial adviser. You should not make any investment decisions based on our communications. Our stock profiles are intended to highlight certain companies for YOUR further investigation; they are NOT recommendations. The securities issued by the companies we profile should be considered high risk and, if you do invest, you may lose your entire investment. Micro Math Capital has been compensated for content creation, amounting to seventeen thousand four hundred seventy-six Canadian dollars. Micro Math Capital owns zero shares in Alaska Energy Metals, but its owners reserve the right to buy and sell shares in Alaska Energy Metals without further notice, which may impact the share price. Please do your research before investing, including reading the companies’ public filings, press releases, and risk disclosures. The company provided information in this profile, extracted from public filings, company websites, and other publicly available sources. We believe the sources and information are accurate and reliable but we cannot guarantee it. The commentary and opinions in this article are our own, so please do your research.
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