We all know that the eevee revolution is beginning to accelerate and will eventually take over internal combustion engines behind the accelerating sails of evs. There are many raw materials that must be sourced to supply the growth. One of these raw materials is in a supply shortage and will have to have its supply growth significantly in the future. That metal is nickel, one of the key components for batteries and one that has already been facing shortages.

Elon musk emphasized the shortage in tesla's q2. Quarterly conference call well i'd just like to reinforce inside you know any mining companies out there, please mine, more nickel, okay, wherever you are in the world, please mine, more nickel and and and don't wait for nickel to go back to some long. Some high point that you experienced some five years ago or whatever go for efficient. You know as environmentally friendly nickel mining at high volume, if tesla will give you a giant contract for a long period of time, if you mine, nickel, efficiently and in an environmentally sensitive way.

Tesla is on the verge of giving a large nickel contract to one mining company and not surprisingly, this opens up an investment opportunity with massive potential in this video. I will uncover the extensive research i've been doing over the past few weeks and show you which mining company, i believe, will secure huge nickel contracts with eevee companies such as tesla. Not only does the mining company have a lot of potential, but the stock is also undervalued by metric. Welcome to cass gaines academy, if you're new to the channel, please consider subscribing for more content like this and let's get right into it, rather than waiting until the end of the video to tell you i'm gon na, let you know right now what stock i will Be talking about today, the stock that i believe will come out on top is veil mining, ticker, symbol v-a-l-e.

Now before you search this dock and have preconceived notions, let me explain why i believe dale mining has massive potential as an investment. This video will have four parts: first, an overview of veil mining as an investment. Second, we'll take a look at the numbers and evaluate how much of a growth opportunity there is for veil. Then we will analyze vail's iron segment of the company and its financials.

Lastly, we will take a look at why i believe vale is undervalued with that out of the way, let's get right into it before we get into veil mining's business operations. Let me explain why i see veal mining as an enticing investment. The investment play i see with veil mining is the pick and shovel play the pick and shovel play was named after the california gold rush in the 1840s and 1850s. In order to mine for gold, each person would need to purchase a pick and a shovel.

After that person purchased the pick and shovel. They would have a chance at finding gold, but it certainly wasn't guaranteed, while the miners weren't guaranteed gold. The company selling the pick and shovel was guaranteed profits. The investment strategy is that, instead of searching for gold with a pick and shovel, we should invest in the company selling the pig and shovels that way.

Instead of investing in the quote-unquote next tesla, we should invest in the company supplying the materials for evs. After all, the chances of an eevee company becoming the next tesla is very slim. On the other hand, it's almost a guarantee that evs are going to dominate the next decade or two. This is where veil mining comes into play.

If you did a quick google search of veil mining stock, you would see that the stock is already up 24 in the past year and may think it's too late to invest. However, this certain stock price is not because of veil's potential in the nickel segment, but rather because of veil's iron mining operations. Over the past few months there has been a search in iron futures on the possibility of an early 2021 shortage. The majority of dale's business is in iron mining operations, veil's 20f filings detailed how iron represented 62 percent of vail's revenue, whereas nickel represented 11 percent of its revenue.

Although iron operations remain vail's main sector, the mining company has risen to the spotlight when it comes to nickel mining. In fact, vale mines, the most nickel out of all of the nickel mining companies, we'll soon go over the competition and why veil comes out on top over a span of five to ten years. Vale's, nickel output has the potential to go from eleven percent to over forty percent of its revenues due to the increased demand for nickel as a result, while iron operations are going well for veil, i see nickel mining as the growth driver for the company currently has A mining facility in boise's bay that it looks to expand for more production. The company knows that the demand for nickel will continue to increase over the coming years.

In essence, vale mining got the message from elon musk's call from war. Nickel and the company will secure a giant contract to supply tesla's demands. So hopefully this message goes out to all mining companies. Please get nickel.

According to a reuters report in october of 2020, bayless held talks with tesla and many other eevee companies mark chavers, valeo's executive director of base metals, told reuters that tesla and other automakers need to ensure there's sufficient nickel available to produce the number of batteries required for Evs over the next five to eight years, so that is the nature of the discussions. I'm sure that is occurring across the industry right now and without specifically commenting on tesla. Those are the conversations we are having right now when reuters asked travers whether vale was talking with tesla travers stated. Yes, absolutely vale is listening to tesla's demands for nickel, which was evident when the company dedicated two billion dollars to low carbon mining projects.

This includes the electrification of underground vehicles, fuel switching and heat recovery traverse stated that mining in an environmentally friendly way has been a key focal point in discussions with automakers and other eevee participants. This throws a major hint at where tesla's mining contracts will go. The mining company with the second most amount of nickel and output is no real's nickel and recent news shows that tesla likely won't deal with that company. This is because russian indigenous communities have been protesting against norvilsk.

According to gennady chatuchan, a member of the dolken ethnic group in late may, a reserve fuel tank on a power plant near norwalk burst open. This reserved tank flooded the local waterways, with 23 thousand tons of diesel oil, which drifted for miles and turned one of russia's rivers into a bright red. Color norwill's knickel claims to have acted swiftly to contain the pollution. However, the russian indigenous communities think norwich have done.

The opposite: chichigan said that we expect that the river was poisoned for a long period, maybe for several years there will be no fish in these rivers and in the lake believe it or not. Tesla has been watching closely on september 30th, 2020. A new report stated that tesla would meet with russian indigenous activists to boycott norville's nickel. This is where veil mining comes out.

On top in 2019 vale's nickel production was 208 000 tons of nickel in the mid-term vale believes that nickel production can ramp up to 400 000 tons. This is a two times increase and easily meets tesla's demand of 275 000 tons of nickel every year by 2025.. On the other hand, the other competition outside of norwich has nowhere near enough nickel to supply tesla's demands. For example, glencore mining looks to mine 120, 000 tons and igo limited only expects to mine 27 to 30 000 tons of nickel.

While these companies could secure a small contract, it'll be difficult for them to compete against vale's advantage, which is the economies of scale. Now, let's go more in depth on the nickel opportunity for veil. Ultimately, in order for veil mining to supply nickel to eevee manufacturers, there need to be enough cobalt and lithium supply. Tesla has vertically integrated into lithium mining and has eliminated a significant amount of cobalt in its batteries.

Of course, the easy competition recently has been to say the least weak, but assuming that other companies rise up and the cobalt supply hit some constraints, then overall, nickel demand just for evs, would reach around 250 000 tons by 2025.. On the other hand, assuming that cobalt does not hit any constraints, then analysts estimate that overall, nickel demand for evs may surpass 800 000 tons by 2025. Now whether vale can supply that much demand all comes down to the company's expansion. If demand sits at 800, 000 tons and vale and other mining companies can only supply 600 000 tons, then the price for nickel would skyrocket and give they'll incredible margins.

Not only that, but with the rise of the cyber truck nickel demand would increase with the use of stainless steel 304 stainless steel, which a cyber truck will use, contains around 8 nickel in it. Assuming that the cyber truck body has 2 000 pounds of stainless steel. That would be around 160 pounds of nickel, which is equivalent to 72 kilograms of nickel. If tesla produces 500 000 cyber trucks, then that would already be roughly 40 000 tons of nickel.

Of course that's not much relative to the total demand, but it's still increased demand. Nonetheless, in terms of valuation, veil seems to be extremely undervalued according to seeking alpha the sector median for forward pde ratios on a gap basis is 24.. On the other hand, veil's forward pde ratio on a gap basis is 9, which is 60 less than the sector. Median when we take a look at yahoo finance, the numbers get even better.

According to yahoo, fail has a forward pde ratio of just 6.29, which is extremely low for a company that is expected to have its sales growth 12 in 2021. Overall veil mining looks to me as a very intriguing long-term investment, while it certainly doesn't have as much potential as other stocks. Like genomics companies, the company's trajectory looks to me like a low risk, medium reward investment. All of this is definitely not financial advice, and you should always do your own due diligence.

Let me know what you think about veil mining in the comment section below. Do you think veil looks like an enticing investment, or do you see other stocks as better investments than vale? If you enjoyed this video, please hit the like button and subscribe and i'll see you in the next one.