On Wednesday, September 16th, Nevada’s Pure Energy Minerals (CVE:PE.V) / (OTCMKTS:HMGLF) & (FRA:AHG1) announced the signing of an agreement with Tesla Motors Inc (NASDAQ:TSLA). To say that this is blockbuster news for the Company would be the understatement of the decade and in fact might not even suffice. Each agreement between Tesla and a junior company is unique. For the avoidance of doubt, here’s key parts, of the press release, quote, (modestly shortened by me).
“…the Company has entered into an agreement with Tesla Motors Inc. for the potential supply of lithium hydroxide that Pure Energy Minerals plans to produce from the Company’s Clayton Valley, Nevada Lithium Brine Project. Pure Energy will conduct mining studies in the forms of, Preliminary Economic Assessment, Pre-Feasibility Study OR Feasibility Study to confirm the technical and economic viability of the Project.”
The press continues, quote, (modestly shortened by me)
“Provided that Pure Energy meets terms and conditions related to project’s quality and timing of delivery, the Agreement establishes a commitment for annual purchase volume over 5 years by Tesla and/or its authorized purchasers. The Agreement sets a pre-determined price that is below current market rates and aligned with Tesla’s goal to reduce the cost of its lithium ion batteries. The supplied lithium will be used in the battery cell manufacturing process of Tesla’s rapidly growing electric vehicle and stationary storage units. Any deliveries from Pure Energy will cover a portion of Tesla’s needs with the remainder to come from other sources.”
Robert Mintak, Pure Energy CEO, commented,
“This agreement with Tesla is a significant milestone that validates Pure Energy’s lithium brine project and business development model, and is an important step in the development of the Project. Pure Energy is aligned with both Tesla’s and the State of Nevada’s development objectives, and we hope to positively contribute to Nevada’s booming clean energy based economy.”
This agreement represents much more than merely a potential off-take partnership. This is a HUGE vote of confidence for Pure Energy Minerals (PE.V) / (HMGLF) & (AHG1.DE), its shareholders, future investors, (including new looks from institutions) and prospective strategic partners. Consider the relative ease Pure Energy will now have with this Tesla news in their back pocket. Consider the relative ease for Pure Energy Minerals (PE.V) / (HMGLF) & (AHG1.DE) to obtain financing when that need arises. Consider the ability of the Company to move rapidly with Nevada State officials on permits and approvals. For these reasons and more, this single press release is worth more than any other news possible.