Investor Insight

Its focus on the exploration and development of high-demand critical metals, supported by a sustainable proprietary processing technology, puts Coniagas Battery Metals in a strategic position to leverage the rapidly expanding battery metals market and increase shareholder value.

Overview

Coniagas Battery Metals (TSXV:COS) is a Canadian company focused on developing a world-class critical minerals project. The name Coniagas is an acronym for various symbols on the periodic table such as – cobalt (Co), nickel (Ni), silver (Ag), and arsenic (As). The company is formed from the spin-off of Nord Precious Metals’ (TSXV:NTH) Graal property in Quebec.

Coniagas is also planning to build a processing facility in Quebec utilizing its proprietary process known as Re-2Ox. It is a closed-loop hydrometallurgical process that extracts metals without any discharge or smelting, thereby exceeding environmental compliance standards. The processing facility will help Coniagas convert the mined minerals into battery-grade metals. In May 2024, Coniagas identified promising, offshore source material for evaluation and processing using its advanced Re-2Ox hydrometallurgical process. This is a significant step towards the company’s goal of establishing a full-scale production facility in Quebec.

The Graal project represents a potential new nickel mine in Quebec with several advantages. First, the nickel at Graal is contained in sulfides that are easier and cheaper to process into battery grade nickel than nickel in laterite deposits. Second, mining at Graal will be an open pit, which is very economical compared to other nickel sulfide deposits found deep underground. Third, the project will also generate substantial copper and cobalt as by-products that will improve the project’s economic viability and deliver a low-carbon, environmentally friendly supply of critical metals for the energy transition.

The project’s location in Quebec also presents several advantages. The province is a Tier 1 mining jurisdiction and ranked fifth in the world for investment attractiveness in the Fraser Institute’s 2023 survey. Furthermore, access to excellent infrastructure in terms of hydroelectricity, roads and ports is a huge positive.

The Graal project fits perfectly into the Canadian government’s Critical Minerals Strategy that aims to create domestic supply sources of critical minerals in the country. Currently, the supply of these critical minerals is dominated by countries such as China, Russia, Indonesia, Peru, Chile and Congo, which either have rising tensions with the West or are characterized by political instability. Graal is in a much safer jurisdiction and is ideally positioned to become a reliable supplier of clean energy metals.

The demand for critical minerals required for energy storage and electric vehicle applications is expected to grow by around 30 times between 2020 and 2040, according to a report by the International Energy Agency. The report indicates copper demand to be 55 percent higher than the 2022 supply. Likewise, the 2030 demand for nickel is expected to be 67 percent higher than the 2022 supply, and for cobalt 147 percent higher than the 2022 supply levels. Coniagas is well positioned to benefit from this supply-demand imbalance and offers investors an excellent opportunity to participate in the clean energy transition.

A secondary project, which may eventually be brought into the Coniagas portfolio, is the Lowney-Lac Edouard project in Quebec, a prospective nickel-copper property near Rio Tinto. The project is currently owned by Nord Precious Metals, which was the parent company of Coniagas.