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My #1 Vanadium Stock – Stina Resources

Advertorial by Keith Schaefer
 
Timing is everything in the Markets.And that’s what I think makes Stina Resources one of the most compelling investments of the next year.You see, they’re buying one of the world’s leading vanadium battery suppliers, just as large-scale energy storage is starting its growth curve.

This couldn’t have been scripted better for investors.  

The founder of a large global machine tool company in Europe – Gildemeister —used a vanadium battery in his own solar plant factories.  He liked it so much, he took on developing and marketing vanadium batteries as a pet project.

And he met with great success!  They built a very efficient battery, with many different sizes, and sold more than 100 units.  They are now installed in Singapore, Siberia, Colorado and the Kalahari Desert—among dozens of other locations.

But the battery company didn’t make money—because it wasn’t run like a business.  It was an ethical R&D project for a wealthy businessman.

So when the big Gildemeister machine tool company was sold, the new owners didn’t want the energy market side, and put it up for sale.

Now Stina Resources is taking it over—just as large scale energy storage is becoming one of the biggest investment themes of our time.

To this day, Gildemeister batteries—being rebranded as Enerox—is one the leading vanadium battery companies in the world.  There’s a management team in place—with over 30 employees—ready to burst out of the doors to chase down and close dozens of sales leads on vanadium batteries around the world.

 
While Gildemeister/Enerox sought financing…the Market came to them.  A buzz started developing around vanadium batteries, which are more accurately called Vanadium Redox Flow Batteries, or VRBs.The world is realizing it needs this large-scale energy storage to make the push to renewables—wind and solar—economic. I spoke with the new CEO of Enerox, Stefan Schauss, asking him where the biggest short term opportunity is for their VRBs.

“We see one big vertical market is the PV plus storage (PV = PhotoVoltaic, ie solar),” he said over Skype from his office in Vienna, Austria.  “It goes very well in the combination. The solar plus storage is everywhere, because people have seen how solar can wreak havoc if it means uncontrolled delivery of energy to the grid. Storage is now mandated in many, many public tenders.”

Schauss says Enerox is well positioned for growth, with a pipeline of more than 100 projects worth about Euro 430 million (US $530 million).

Now, nobody should think little Stina will generate 400 million or even 100 million Euro in revenue this year.  But it does speak to the demand the company is seeing for its VRBs around the world. Especially with global projections for energy storage in the range of US $18 billion by 2023.

 
“With the vanadium redox flow battery, Stina is putting together the portfolio that we can deliver for the whole value chain in order to bring assets completely as a turn-key solution into the grid system.”

Being a research company for so long, the new Enerox has 19 active patent families, all developed in-house.  

The result is a plug & play “cube”, like you see in the picture above. There’s big ones (up to 10 MW) and small ones (100 KW) and customers can put as many of them together as needed—it’s called ‘clustering’—to store as much energy as required.  It’s got a small footprint yet it’s very scalable, and what Schauss says that is really important is that it’s flexible for any environment.  They have installations in both arctic and desert conditions.

I’m not sure I’ve got across to you how different VRBs are from lithium and cobalt batteries.  The energy in a VRB is in liquid form, an electrolyte, and as this fluid goes back forth across a membrane, it loses or gains electrons, generating electricity. 

It was developed in the mid-2000s, then trialed and tested in the early years of this decade and has been getting early adopter installations since 2015.

VRBs are discreet, they’re scalable, they last for 20 years with little or no maintenance, they can be recycled to then go another 20 years. They create very green electricity for remote communities — and they let renewable energy be seamlessly integrated into the modern world.  So they can be used everywhere.

VRB’s are much bigger in Asia right now than North America.  The most notable vanadium-flow battery is probably a 200 MW system being built on the Dalian peninsula in China, which will serve 7 million residents. 

Costing $500 million, it’ll be used to peak-shave approximately 8% of Dalian’s expected load by 2020, which means the VRB system will be used in peak usage times instead of building expensive and huge gas-fired “peaker” plants. This battery system will be the world’s largest, and it will single-handedly triple China’s grid-connected battery storage capacity. 

Azure International in China says the market projection for VRB demand (by MW) in the top 10 countries is growing at an 80% CAGR from 2013 to 2020, which means there is more than 7,000 MW of vanadium-flow battery capacity needed in 2020.

I want to tell you a couple other quick points about Stina before you go back to your trading day.

 

1.     The public company management team is right now in the process of closing the Enerox CellCube purchase.
2.     They also recently bought a power control company in Edmonton that will do $15-25 million in revenue in the next 12 months and internalize a lot of the work Enerox does in North America.
3.     Stina actually owns one of the largest, highest grade vanadium deposits in the world, located in Nevada.  At some point I can see that getting spun out, giving shareholders two companies for the price of one today.

And that alone could be worth the market cap of the company today, as the price of vanadium is already rising as fast as lithium and cobalt are.

I’ve got a big position here—over 1 million shares and warrants combined—because I see management thinking BIG.  They’re buying Enerox for a song just as VRBs and large-scale energy storage hits The Big Time.   There’s a huge sales funnel full to the brim, and a large-scale energy storage market that is coming around to meet them head-on.

It’s Perfect Timing.

 
Management at Stina Resources has reviewed and sponsored this story. The information in this newsletter does not constitute an offer to sell or a solicitation of an offer to buy any securities of a corporation or entity, including U.S. Traded Securities or U.S. Quoted Securities, in the United States or to U.S. Persons.  Securities may not be offered or sold in the United States except in compliance with the registration requirements of the Securities Act and applicable U.S. state securities laws or pursuant to an exemption therefrom.  Any public offering of securities in the United States may only be made by means of a prospectus containing detailed information about the corporation or entity and its management as well as financial statements.  No securities regulatory authority in the United States has either approved or disapproved of the contents of any newsletter.

 

Keith Schaefer is not registered with the United States Securities and Exchange Commission (the “SEC”): as a “broker-dealer” under the Exchange Act, as an “investment adviser” under the Investment Advisers Act of 1940, or in any other capacity.  He is also not registered with any state securities commission or authority as a broker-dealer or investment advisor or in any other capacity.



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