Montana Project Poised to Bolster U.S. Critical Mineral Supply

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Stillwater Critical Minerals Corp. (PGE:TSX.V; PGEZF:OTCQB; J0G:FSE) provided an update on its applications for U.S. federal funding, emphasizing its role in bolstering domestic critical mineral supply chains. The company noted the growing bipartisan focus on securing U.S. inventories and processing capabilities for critical minerals, essential for both economic and national security. This includes the establishment of the Strategic and Critical Materials Board of Directors by the Department of Defense (DoD).

Stillwater highlighted its flagship Stillwater West project in Montana as potentially a pivotal contributor to domestic supply. The project hosts a significant inventory of nine critical minerals recognized by the U.S. government, including nickel, copper, cobalt, and platinum group elements. The company noted that the United States currently relies heavily on imports for these resources, underscoring the urgency of domestic production and processing.

In 2024, Stillwater took significant steps to align with federal priorities, including submitting a white paper in response to a specific Open Announcement call by the Defense Industrial Base Consortium (DIBC) and applying for funding under the general Defense Production Act (“DPA”) Title III program. The company also expanded its partnerships with government research institutions, such as Cornel University and the Lawrence Berkeley National Laboratory, through grants from the Department of Energy's ARPA-E program. Additionally, Stillwater secured further investment and technical support from Glencore, reinforcing its project's advancement. 

Michael Rowley, Stillwater's president and CEO, expressed optimism about the bipartisan support the company received in discussions with U.S. officials, including those from Montana. He stated in the news release, "We have applied to the U.S. government for substantial grant funding to accelerate the advancement of Stillwater West to become a cornerstone of U.S. critical mineral supply as the country moves quickly to reduce its dependence on imports."

Critical Minerals: Paving the Way for a Clean Energy Transition

According to the International Energy Agency (IEA), demand for critical minerals saw robust growth in 2023, with lithium demand rising by 30%. Other minerals like nickel, cobalt, graphite, and rare earths saw increases of 8-15%. The combined market value of these minerals is projected to more than double, reaching an estimated US$770 billion by 2040 in the IEA's Net Zero Scenario. This trajectory highlights the urgent need to develop resilient and sustainable supply chains for these essential materials.

Chris Temple of The National Investor noted that Stillwater has been "fleshing out a substantial resource of base metals more broadly, almost half of which is nickel." 

Investment in critical minerals continues to grow, albeit at a moderated pace compared to previous years. The IEA reported a 10% increase in investment in 2023, with lithium specialists seeing a particularly sharp rise of 60%. Exploration spending also climbed by 15%, led by Canada and Australia, signaling a global effort to secure and expand supply chains.

The geopolitical significance of critical minerals has become increasingly evident. According to Ahead of the Herd on December 12, the U.S. has taken steps to reduce its reliance on foreign sources by invoking the Defense Production Act and other measures to bolster domestic production. However, as noted in the same report, China's dominance in processing critical minerals, including its control over 60-70% of global lithium and cobalt supplies, continues to pose a strategic challenge. Recent Chinese restrictions on exports of materials like gallium and graphite further underscore the vulnerability of supply chains.

In Canada, critical minerals are positioned as a strategic asset in trade negotiations and energy transition efforts. According to Canada's National Observer on January 10, Ottawa has recognized the importance of these resources, investing CA$3.8 billion in exploration, processing, and research initiatives. However, industry experts like Frik Els of Adamas Intelligence caution that Canada's critical minerals sector remains underdeveloped relative to its potential, with limited volumes of key materials like lithium currently available for export. Fast-tracking mine permitting and regulatory processes is essential to scale up production and meet rising global demand.

Stillwater's Role in Strengthening Domestic Mineral Supply Chains

As outlined in Stillwater Critical Mineral's Investor Presentation, the Stillwater West project is strategically positioned to capitalize on the growing demand for critical minerals driven by the global shift toward electrification and green energy. The company is advancing several initiatives to further develop the project. Recent drilling campaigns in 2023 have shown substantial resource expansion potential, with wide intervals of mineralization, including high-grade zones that confirm the scalability of the resource. These results have laid the groundwork for further exploration and a planned resource update.

Collaborations with Glencore and Cornell University have introduced innovative approaches to resource development, including carbon sequestration and advanced critical mineral recovery methods. These partnerships, supported by ARPA-E grants, align with the company's commitment to environmental sustainability and long-term project viability. Additionally, the U.S. government's efforts to secure domestic critical mineral supply chains provide a supportive policy environment, offering funding opportunities and regulatory backing for projects like Stillwater West.

As one of the largest undeveloped nickel resources in the United States, Stillwater West is positioned to address rising nickel demand driven by electric vehicle adoption and supply chain diversification. The project's combination of robust geology, strategic partnerships, and favorable market conditions reinforces its potential to become a cornerstone of domestic critical mineral production, contributing to national sustainability and security objectives.

Expert Analysis Underscores Stillwater's Strategic Value

On January 9, Chris Temple of The National Investor noted that Stillwater has been "fleshing out a substantial resource of base metals more broadly, almost half of which is nickel." Temple emphasized the company's strong foundation, stating that it possesses "an existing, substantial polymetallic resource," with additional support from major industry players like Glencore. He also highlighted the increasing attention from both industry and government, suggesting that these factors could receive further boosts under potential new policy frameworks.

While acknowledging challenges in the development process, Temple pointed out that CEO Mike Rowley has consistently emphasized a favorable cost equation for the project, especially compared to other operators in the region. According to Temple, "The reasons for being in this name far outweigh the hoops still to be jumped through," reflecting his positive outlook for the company's future.

Ownership and Share Structure

Management and insiders own approximately 20% of Stillwater, according to the company.

Executive Chairman and Director Gregory Shawn Johnson owns 2.86%, President and CEO Michael Victor Rowley owns 2.56%, Independent Director Gregor John Hamilton owns 1.65%, Independent Director Gordon L. Toll owns 0.44%, and Vice President of Exploration Daniel F. Grobler owns 0.23%, according to Reuters.

Institutions own approximately 25% of the company, high net-worth investors own about 37%, and Glencore Canada Corp. owns 15.4%. About 18% of the company's shares are in retail, Stillwater said.

There are about 227 million shares outstanding with 174.5 million free float traded shares, while the company has a market cap of CA$36.33 million and trades in a 52-week range of CA0.1000 - CA0.2200.