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NRG METALS INC COM NPV (OTCMKTS:NRGMF) Is On The Move

NRG METALS INC COM NPV (OTCMKTS:NRGMF) Is On The Move
Written by
Jim Bloom
Published on
October 25, 2017
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Investors and analysts are hot on the tail of NRG METALS INC COM NPV (OTCMKTS:NRGMF).In October 2017 alone, the price has remained on an unprecedented steady rise that has seen its price triple in value.In today’s article, we unravel the news behind NRG Metals, revealing how management was able to restructure its finance, boost liquidity and expand its capital base between 2015 and 2016.The stock’s price movement is shown in the graph below: NRGMF Daily ChartRecent news of its strategic alliance with high-tech enterprise, Chemphys Chemical Industry Co, an initial contract for drilling with AGV Falcon Drilling SRL, and its ownership of a large amount property in the Argentina lithium triangle have raised market expectations of the company’s future performance.BusinessFor readers who would require some information on NRG Metals, here is a brief profile of the company.NRG Metals Inc.was founded on June 20, 1995 and is headquartered in Vancouver, Canada.The company engages in the identification, acquisition and exploration for lithium brine mineral in Argentina, Chile and Bolivia. In addition to the now famous Salar Escondido lithium project, the Company is evaluating the 3,287 hectare Hombre Muerto North lithium project in Salta, Argentina.As announced in a press release dated July 13, 2017, the Company has filed an Environmental Impact Study and applied for permits to drill for the Hombre Muerto North Project.NRG Metals Inc. currently has approximately 68 million shares issued and outstanding, and trades on the TSX Venture Exchange under symbol NGZ, on the OTC QB Market under symbol NRGMF, and on the Frankfurt Stock Exchange under symbol OGPN.In recent years, a large number of lithium junior exploration and existing producers have flocked to the South American region to participate in a new wave of growth. This boom is driven by the high demand for lithium which has become key manufacturing component for automakers and battery manufacturers as they commit to an electric future.Recent DevelopmentsOn September 18 2017, NRG Metals announced that it awarded a contract for the initial drilling at its Salar Escondido lithium project in Catamarca province, Argentina to AGV Falcon Drilling SRL of Salta, Argentina. AGV has extensive experience in the drilling of salar targets in Argentina, including the Rincon, Cauchari and Rio Grande salars.Drilling on the first hole, which was targeted to be drilled to a depth of 350 m, was scheduled to commence in late September or early October after a shallow drill water well had been completed. The Salar Escondido project comprises mining concessions totaling approximately 29,180 hectares (72,100 acres) located 280 km southeast of the provincial capital of Catamarca.The Salar Escondido is a large basin, roughly 20 by 40 kilometers in size, which is mostly covered by a series of overlapping alluvial fans. NRG’s technical team believes that a large salar with an area of at least 700 km2 developed in the basin about 2 million years ago.Only a small portion of the original brine salar is presently exposed at surface in a small saline lake in the southwest portion of the basin. The brine in the lake contains anomalous lithium values.In 2016, the company tested the paleo- salar hypothesis by conducting a Vertical Electric Sounding (VES) geophysical survey over the central part of the basin. The survey detected an extensive zone of very low resistivity (shown in pink in the following illustration). The Company believes this zone represents a paleo-salar saturated with saline brine that may contain lithium. NRG Metals Inc also announced that has it entered into a Letter of Intent ("LOI") with ChengduChemphys Chemical Industry Co. Ltd. The purpose of the LOI is to combine the development expertise of NRG, with the high purity processing expertise of Chemphys.As a part of this process, the two parties intend to complete a private placement as d for the financing of the Hombre Muerto North Lithium Project (HMNLP), which is currently under exploration. The intent is to quickly evaluate the project, and if deemed feasible (upon the completion of exploration and due diligence, and satisfactory studies which may include a Preliminary Economic Assessment), rapidly move the project into production.In addition, NRG has agreed to an off-take agreement with Chemphys for the sale of any lithium produced at HMNLP, as well as a first right of refusal and first right of offer for the sale of lithium produced at any other projects that NRG moves forward, board representation and certain anti-dilution provisions and a use of proceeds agreement.Financial PerformanceThe firm’s focus on expansion has slowed down its revenue generation in recent years. However, its lack of profitability has not affected its liquidity position as it currently has cash and short term investments worth $1.53 million according to its financial reports. At the end of December 2016, its current ratio was as 4.125, much higher than the common industry recommendation of 1. This level of liquidity puts the firm in a position to fund its other projects and invest in viable opportunities for expansion or diversification.NRG Metals Inc completed a non-brokered private placement of 4,500,000 units at a price of CAD$0.10 per unit, raising gross proceeds of $450,000. This has allowed the firm to continue its trend of expanding its capital base. From equity of $231,000 in 2015, the firm has now expanded to $1.18 million in 2016.ConclusionNRG Metals has lot of investment in an area of high demand. This has put the company in a position to produce rewards for investors. It is expected that the stock’s value will remain on the rise as the market becomes more aware of its potential.We will be updating our subscribers as soon as we know more. For the latest updates on NRGMF, sign up below!Image courtesy of dani l'explorateur via FlickrDisclosure: We have no position in NRGMF and have not been compensated for this article.

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