Grid Metals Poised to Capitalize on Lithium and Base Metals Demand

• Grid Metals (GRDM) is a TSXV-listed company specializing in exploring and developing lithium and nickel projects in Manitoba, Canada.
• GRDM recently raised funds primarily for drilling at their lithium property to delineate a resource and has two drills active at the site.
• The company is considering a short-term milling agreement with the Tanco mine, which will require a smaller resource and offer a faster route to production, providing early revenue for GRDM.
• Beyond lithium, GRDM is also co-developing nickel and copper projects. A central mill will process resources from two pits, with a combined 40 million tons currently identified.
• The company's strategy is to establish itself as a leader in lithium exploration and development in southeast Manitoba, targeting a resource size of 10-15 million tons, while also advancing its base metal projects.

Grid Metals is an exploration and development company focused on lithium and nickel in Manitoba, Canada. The company has several promising projects that position it well to benefit from the rising demand for metals needed in electric vehicle and battery production.

Advancing Lithium Project Towards Near-Term Production

Grid Metals is advancing its lithium project in southeast Manitoba with the aim of commencing production in the next 18-24 months. The company is currently drilling to expand the resource and will target 10-15 million tonnes in the initial resource estimate expected by mid-2023.

Grid is pursuing a faster path to production by negotiating an agreement for toll milling with the nearby Tanco mine. Under the tentative agreement, Grid and Tanco would split costs and profits evenly. This avoids the need for Grid to finance its own processing plant and can expedite near-term lithium production.

With lithium prices around $1,000/tonne, toll milling 200,000 to 500,000 tonnes per year could generate substantial revenue for Grid. The company can use this cash flow to further expand its lithium operations and advance its nickel-copper project.

Advancing Nickel-Copper Project with Strong Economics

Grid's Makwa nickel-copper project is located adjacent to the lithium ground. It hosts a 40 million tonne resource amenable to bulk underground mining. The company will release a Preliminary Economic Assessment (PEA) in the next few months and is targeting annual production of 1-1.5 million tonnes.

At the projected scale, the nickel-copper project requires an estimated $250-$300 million in capital versus over $700 million for larger projects. The relatively small upfront capital combined with the infrastructure in place makes Makwa an economically attractive development project.

Grid sees strong interest from electric vehicle manufacturers and battery producers in securing North American nickel and copper production. The company is positioned well to attract an industry partner to help finance the construction of the mine.

Right Team and Location to Capitalize on Opportunity

An experienced management team along with strategic investors positions Grid well to advance these projects successfully. President and CEO Robin Dunbar has over 25 years of experience including bringing an Australian nickel mine into production. Grid recently completed strategic financing with investors that have a strong track record in lithium. This provides capital and connections to accelerate development.

The location in Manitoba, Canada provides access to stable mining jurisdiction, infrastructure, skilled workforce and electric grid capacity. Major lithium and nickel hubs are expected to develop in central Canada to supply critical minerals for EV supply chains.

With promising projects and the right team and location, Grid Metals has a favorable outlook. Near-term lithium production can provide cash flow to expand resources and advance the base metals project. Grid merits consideration as a way for investors to capitalize on rising battery metals demand.

The Investment Thesis for Grid Metals

Leverage to EV/Battery Growth TrendsGrid's lithium and nickel projects stand to benefit from surging demand for these metals in electric vehicles and lithium-ion batteries. Major projections forecast multi-fold growth in EV sales and lithium-ion battery installations over the next decade. Investing in a company with assets leveraged to these high-growth trends provides upside exposure.

Near-Term Cash Flow PotentialThe ability to potentially commence lithium production within 18-24 months through toll milling provides Grid with a faster path to generating revenues. Many junior miners can experience extended delays before turning their projects into cash-flowing assets. Grid's strategy could reward investors with nearer-term cash flow.

Strong Economics for Nickel-Copper ProjectThe preliminary estimates for Grid's Makwa nickel-copper project point to favorable economics with estimated capital costs significantly below comparable projects. The strong project economics combined with the rising demand for nickel bolsters the investment case.

Experienced Management TeamGrid's management has extensive experience exploring, permitting, developing, and operating mining projects. This experience improves the probability of successful execution across Grid's lithium and nickel initiatives. The recent strategic financing also brought in partners with proven lithium project development experience.

Based on these factors, Grid Metals appears positioned as an attractive investment opportunity within the battery metals mining space. The projects, timelines, economics and team provide a compelling case for investors seeking leveraged exposure to EV battery metal demand growth in the years ahead.