GreenRoc shoots up 52% in a day. Here's who's next.
Good morning MINING AIM and welcome to your crystal ball.
I have covered GreenRoc in the past - Amitsoq has exceptional graphite, and like another underappreciated graphite play (Blencowe), better days are ahead. For those out of the know, GROC enjoys Amaroq as a neighbour, and should be much higher already.
Here's some context: GreenRoc has fallen substantially since the IPO, but has now signed a LOI with Otra Holding a/s, the owner of Eyde Materials Park in southern Norway, a sustainable industrial park focused on the battery value chain and the green transition, to reserve an area of 100,000m² for GreenRoc's Active Anode Materials plant.
There is no chance this letter would be signed without Otra being at least moderately confident it would get built.
And it's confident, because GROC has also applied for 'Strategic Project' status under the EU's Critical Raw Materials Act, covering both the Amitsoq Graphite Mine and the AAM Plant. Applications are being processed during the autumn and successful projects will start to be announced before the end of the year.
Priority permitting? Yes please.
GROC has also submitted its final Project Description to the Greenlandic Government for approval, prior to public consultation - and expects its Exploitation Permit in due course.
Remember, this is all just for show really - there's no wildlife, the asset has been worked at before, and AMRQ next door has had zero issues.
Financial support via EU grant funding? I love grant funding.
I love grant funding so much, that I have been highlighting what's been happening for years.
China quietly took control of the entire global supply of strategic minerals.
The west decided that China would never weaponise supply.
China has weaponised rare earths, graphite, antimony and (soon tungsten), via export bans of various severities.
The EU has (much like a homeowner delaying fixing anything) decided to pay way too much, way too late to get some supply back.
It's the same story with Germany shutting down every nuclear plant and relying on Russia for gas. Looked at the German economy recently? It's come down with symptoms of 'idiots in charge.'
It's the same across the US, Australia and anywhere else...
But the bottom line is that the EU Act sets benchmarks for domestic capacities along the strategic raw material supply chain and for diversifying EU supply:
EU extraction capacity of at least 10% of the EU's annual consumption of strategic raw materials
EU processing capacity of at least 40% of the EU's annual consumption of strategic raw materials
EU recycling capacity of at least 25% of the EU's annual consumption of strategic raw materials
Not more than 65% of the Union's annual consumption of each strategic raw material to rely on a single third country for any relevant stage of the value chain.
If it's going to do this, it will be expensive.
Not to mention impossible, but who cares about logistics right?
How are strategic projects getting funded?
Tons of ways.
The Strategic Technologies for Europe Platform (STEP) scope comprises digital technologies, clean technologies and biotechnologies as well as the critical raw materials needed for their respective value chains. Strategic Projects under the Critical Raw Materials Act are explicitly included in its scope, making them eligible for support under cohesion policy funds (for example, the European Regional Development Fund, Cohesion Fund, European Social Fund Plus, and the Just Transition Fund).
Strategic Projects can also be funded under the Innovation Fund or the Recovery and Resilience Fund.
Additionally, investments in the critical raw materials value chain are eligible under InvestEU. For Strategic Projects outside the European mainland, the Global Gateway and the European Fund for Sustainable Development plus (EFSD+) can also be used.
And any projects designated can also benefit from State Aid, as the EU is arguing (perhaps superfluously) that under the Temporary Crisis and Transition Framework, member states can support investments for the production or recycling of critical raw materials that are necessary for the manufacturing of strategic equipment.
In other words, they're throwing the rules out as supply of metal is more important than political ideology.
To the tune of hundreds of millions of potential dollars in 'free' cash.
Never thought I'd see the day. There's masses of grant funding - and even after the rise, GreenRoc is only at a piffling £3 million market capitalisation - the CEO would never sell the asset, but he could get more for it today in cash.
So who's next?
Two candidates.
And Metals One.
Both have solid assets - covered in depth, just click the links.
Both plan to apply for this status.
Both have miserably low share prices compared to their assets, just like GreenRoc.
You heard it here first.
And from GROC CEO Stefan Bernstein:
'I am very pleased that our search for the best location for our AAM plant has ended with such an attractive location. Norway has amongst the lowest energy prices in Europe and also the lowest CO2 emission per unit of produced electrical energy. Eyde Material Park has been able to offer flexible terms which allows us to plan ahead for the coming time. Another attraction is that Norway has a National Battery Strategy with a variety of financial and other support programs in place to help industries such as ours, to get started. In addition, Norway has a long tradition of hosting heavy processing industries and has all the necessary regulations in place to ensure that such activities are undertaken with due respect for working conditions as well as the environment.
It is also with great anticipation that we have filed our applications for both our Amitsoq Graphite Mine and our future Graphite AAM Plant to be designated as Strategic Projects under the EU's Critical Raw Materials Act. Becoming a Strategic Project will not only provide access to the public financing of our work programmes but also enhance our profile and attractiveness to potential offtakers and other strategic partners.
And who's got assets in Norway (and Sweden)?
Kendrick Resources.
And Metals One.
The EU will throw cash at these companies like it's taxpayer money, and only the Nordics (and Germany) are set up to benefit. Ever tried to set up a mine in Portugal or Serbia? Ask around. But Norway, Sweden and Finland welcome the investment with open arms (as long as you look after those pesky reindeer).
You've been given the roadmap.
It's like shooting fish in a barrel.
- Charles Archer, 27/8/2024