Co. Resuming Production at Spanish Flagship After Merger

Source: Streetwise Reports 04/29/2024

After its business combination agreement with Strategic Minerals Corp. is completed, IberAmerican Lithium Corp. plans to resume production at Strategic’s flagship Penouta Project in Spain. One analyst says it’s a great time to look at the company’s shares.

IberAmerican Lithium Corp. (IBER:CBOE; IBRLF:OTCQB) announced that after its business combination agreement with Strategic Minerals Corp. is completed, it plans to resume production at Strategic’s flagship Penouta Project in Spain.

IberAmerican also announced a planned amalgamation with its wholly-owned subsidiary, IberAmerican Resources Inc., and a plan to change its name from IberAmerican Lithium Corp. to IberAmerican Resources Inc.

“Upon completion of the proposed transaction, we intend to promptly resume production in Section B, generating immediate cash flow,” said IberAmerican Chief Executive Officer Campbell Becher. “Concurrently, we are dedicated to executing essential capital investments to bolster production efficiencies, laying the groundwork for the reactivation of operations in the expansive Penouta resource within Section C later this year. As we approach the finalization of the proposed transaction, we are assembling a talented team of technical and marketing experts. Our goal is to harness the full potential of this remarkable green earth resource and extract maximum value for our stakeholders.”

Strategic is a distressed asset that was a “gift,” Becher has said. “There’s a ton of opportunity here, with real low-hanging fruit solutions.”

Becher said his team plans to bring the mine back to steady production of tin and other metals, which could be an important catalyst for the company.

“Telling investors that you have a cash-flowing asset is a different story than telling investors you’ve got a drill hold that doesn’t have cash flow, it’s a cost center, not a revenue center,” Becher said. “So, we’re looking to build out some revenue centers here, as well.”

“With the picture for IberAmerican now considerably clearer and brighter, we stay long, and this is thought to be a good point to buy or add to positions,” Technical Analyst Clive Maund wrote.

Technical Analyst Clive Maund wrote on the date of this article that while he recommended the stock on fundamental and technical grounds on March 11, “the recommendation was rather too early as it went on to drop to a lower level before completing its odd-shaped Cup and Handle base.”

“Yet the basic idea was correct, for it has just last week broken out upside from the pattern due to the rapidly improving fundamental situation for the company,” Maund wrote.

The remaining hurdle to clear before the stock is freer to advance is the resistance shown at the upper boundary of the entire pattern, he noted.

“With the picture for IberAmerican now considerably clearer and brighter, we stay long, and this is thought to be a good point to buy or add to positions,” Maund wrote.

The Catalyst: Elements for the Energy Transition

On its website, Strategic said it extracts tin, tantalum, and niobium.

Tin is a key industrial metal used for everything from solder to alloys, including in electric vehicles (EVs). The market size for the metal is estimated at 418.4 kilotons in 2024, and it is expected to reach 475.46 kilotons by 2029, according to Mordor Intelligence, at a compound annual growth rate (CAGR) of 2.59%.

“Tin is used in the electronics industry as a solder and is often used in various purities and alloys, generally with lead and indium,” Mordor noted. “About 50-70% of the overall tin produced is used in the electronics and electrical industry in various products, such as mobiles, tablets, computers, watches, clocks, and other consumer electronic devices.”

Tantalum and Niobium, almost always found together, are both considered technology-critical elements by the European Union.

Becher said there are other potential revenue sources from industrial minerals at the mine.

“We’ve got quartz, mica, and feldspar, which are all very sought after in Spain that we haven’t even talked about,” Becher said. “What are we going to do with those assets?”

Lithium itself is critical for the clean energy transition that is being sought worldwide. Battery storage using the element will be “pivotal” in reducing carbon footprints globally, according to Energy5.

The market for the metal is projected to grow from US$2.5 billion in 2023 to US$6.4 billion by 2028 at a compound annual growth rate (CAGR) of 20.4% from 2023 to 2028, according to a report by Markets and Markets.

Citing demand for use in electric vehicles and storage batteries as key drivers, Katusa Research predicted the lithium market could have a major breakout this year.

“The opportunity in lithium is more electric than ever,” Katusa wrote. [OWNERSHIP_CHART-10906]

Ownership and Share Structure

Reuters provided a breakdown of the company’s ownership and shareholder information, where management and insiders own approximately 13.01% of the company.

According to Reuters, Independent Director Miguel Angel de la Campa owns 5% of the company with 5.48 million shares, CEO Becher owns 4.18% of the company with 4.58 million shares, Chairman Eugene C. McBurney owns 3.88% of the company with 4.25 million shares, and Independent Director David Young owns 0.18% of the company with 0.20 million shares.

About 27.86% of the company is held by institutions.

Delbrook Capital Advisors Inc. owns 17.81% of the company with 19.50 million shares, and Brockville International Holdings Ltd. owns 10.05% of the company with 11.00 million shares.

Reuters reports that there are 109.5 million shares outstanding and 84 million free float traded shares, while the company has a market cap of CA$19.16 million and trades in a 52-week range of CA$0.07 and CA$0.40.

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Important Disclosures:

1. IberAmerican Lithium Corp. has a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of IberAmerican Lithium Corp.
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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( Companies Mentioned: IBER:CBOE; IBRLF:OTCQB, )