Dear SmallCap Network Members, Sometimes the next big investing idea is right under our noses or in the case of lithium, literally right under our finger tips. That’s because you are probably reading this on a mobile device or laptop powered by lithium-ion batteries. However, consumer electronic devices are just the tip of the iceberg for future lithium demand as automakers rush headlong into producing electric vehicles (EVs) that will need to be powered by lithium batteries – creating potentially lucrative opportunities for mining stocks and investors. Investment Snapshot Lithium produces a high amount of energy in a lightweight package – making the metal perfect to use in the batteries that power consumer electronics and increasingly electric vehicles. It took 50 years for lithium batteries to reach the level they are at today with potential alternatives using other metals still in the early R&D phase. To avoid major price fluctuations or supply disruptions, the global tech and auto industries are in a rush to secure steady and diversified supplies of lithium through strategic alliances and joint ventures with lithium exploration There is plenty of room for small cap exploration stage lithium mining stocks like Canada based Azincourt Energy Corp (TSX-V: AAZ;OTCMKTS: AZURF) which is focused on building a value-based portfolio of lithium, uranium, cobalt and other critical clean energy elements to capitalize on macro trends towards cleaner and greener energy. What is Lithium and What is it Used For? Lithium is a soft, silvery-white metal that’s considered to be the lightest metal and the lightest solid element – meaning it’s excellent for use in batteries and in a variety of other industrial products or applications. That’s why most people equate lithium with lithium-ion batteries which (according to the latest U.S. Geological Survey commodity summary) is estimated to account for 46% of global usage for the metal. Other important lithium uses would include for (heat-resistant) ceramics and glass (27%); lubricating greases (7%); polymer production (5%); continuous casting mold flux powders (4%); air treatment (2%); and other uses (9%).     Lithium consumption for batteries though has increased significantly in recent years because rechargeable lithium batteries are used for just about every portable consumer electronic device and are increasingly being used to power electric tools, electric vehicles and for grid storage applications – especially for the power generated by wind and solar installations. And while much of the current lithium demand for batteries comes from the consumer electronics industry, its automaker demand that is expected to ramp up significantly and drive future demand because electric vehicles are powered by lithium batteries.  No Good Substitutes and a Time Consuming Mining Process   Lithium substitutes for batteries are not so easy to find as the metal’s real value is its ability to provide a high amount of energy in a lightweight package. And while alternatives using calcium or magnesium are being developed, their development is still in the early phases with lithium batteries having taken more than 50 years to reach the point they are at right now. In addition, lithium is primarily mined in Australia through a process called hard-rock mining which produces the metal in weeks while in South America and most other locations, the metal is produced through brine mining followed by solar evaporation (much in the same way that salt is produced) which is cheaper but can take up to two years to complete. This means end users must grapple with uncertainty regarding near-term lithium supplies and prices. Most US Consumed Lithium Comes from Distant Sources For the USA, lithium is considered to be a high-priority and strategic mineral with the country’s green energy and manufacturing policies dependent on developing a strong domestic lithium mining and battery manufacturing sector. The problem is that more than half of the lithium consumed in the USA is imported mainly from (2013–16 estimates)Chile (49%), Argentina(48%), China (2%) and other countries (1%) as there is currently only one active lithium brining mining operation in Nevada owned by Albemarle Corporation (NYSE: ALB)with the latest US lithium production figures standing at just 870 tons for 2013 (as figures for more recent years are considered proprietary). Meanwhile, geographically distant Australia and Chile are currently the world’s top producers at an estimated 18,700 and 14,100 tons, respectively, for 2017 and account for more than half of all global output. South America’s “Lithium Triangle” Dominates Production and Global Reserves The South American countries of Argentina, Bolivia and Chile form what is known as the “lithium triangle” that is home to more than half of the known global reserves of the metal. These three “lithium triangle” countries would also form the historic production base of the so-called “lithium oligopoly” consisting of Albemarle, FMC Corp (NYSE:FMC) and Chile’s Sociedad Quimica y Minera de Chile (NYSE: SQM). Of the three “lithium triangle” countries, Chile would be the more foreign investment friendly, politically stable and the bigger lithium producer thanks in part to sun evaporation in the Atacama Desert –the driest non-polar desert in the world. And while some analysts have recently expressed concerns that the “lithium triangle” could swamp the lithium market with new production, such concerns tend to be unfounded for two reasons: Argentina and Bolivia would both have big lithium reserves; but both countries have long histories of political and economic instability and/or mismanagement that tends to make foreign mining investors wary. Much of the “lithium triangle” outside of Chile (and especially in Bolivia)is as high as 10,000 feet above sea level where producing the metal through brine mining is limited by the rate of precipitation (as this side of the Andes has more rain) and the rate of evaporation at cold high altitudes. The US Tech and Auto Industries Need to Secure Lithium Supplies Securing a steady and diversified supply of lithium to avoid major price fluctuations or supply disruptions is now a top priority for tech companies and especially for automakers in the USA and Asia. Tesla (NASDAQ:TSLA), General Motors (NYSE: GM) and Nissan Motor (OTCMKTS: NSANY) along with up-and-coming Chinese automakers are currently the major producers of fully electric vehicles while many other key automakers such as Ford Motor Company (NYSE: F), Daimler AG (OTCMKTS: DDAIF) and Volvo Car Corporation have pledged to increase their EV offerings in the next five years. However, a February 2018 Financial Times article quoted a Wood Mackenzie analyst as saying: “I think a lot of car manufacturers are almost panicking, in the sense they want to make sure they don’t miss out on the essential materials they need for the battery.” Some auto makers are already jumping the gun to secure those “essential materials” by forming strategic alliances and joint ventures with lithium exploration companies to secure supplies. For example:      Tesla has reportedly been in talks with Chile’s SQM to invest in the company to secure lithium for them assive Giga factory 1 being built in Nevada. In 2017, Chinese automaker Great Wall Motors (OTCMKTS: GWLLF) took a 3.5% stake in Australian lithium producer Pilbara Minerals(OTCMKTS: PILBF) plus agreed to an off-take deal for 75,000 tonnes a year of spodumene concentrate (a source of lithium).Chinese automakers need to meet a quota for new energy vehicles by 2019 with electric and plug-in hybrid cars required to make up at least a fifth of Chinese auto sales by 2025. In January 2018, Toyota Motor announced a 15% stake in Australian listed Argentinianlithium mining company Orocobre Limited (ASX: ORE). The investment will elevate an existing long term lithium project partnership to a new level of strategic alliance. Lithium Production Can’t Keep Up with Demand and Prices Rose Last Year In response to increased lithium demand for battery applications, worldwide lithium production increased by an estimated 13% to 43,000 tons in 2017. However and over the last two years, lithium production has not been enough to meet global demand. Moreover and by 2030, demand is expected to hit 250,000 metric tons a year - up from less than 50,000 metric tons in 2017. Lithium prices are also rising or fluctuating. In 2017, spot lithium carbonate prices in China ranged from$15,000 to $24,000 per ton throughout the year owing to tight supplies coming from Australia. For large fixed contracts, the annual average US lithium carbonate price was $13,900 per metric ton for a 61% increase from 2016 prices. The rest of the world though experienced more modest price increases thanks to the availability of supplies from more diversified sources of lithium (albeit heavy snowfall limited production at one key lithium brine operation in Argentina). Azincourt Energy Corp as a Small Cap Lithium Play Rising global demand for lithium means there is still plenty of room for up and coming small cap exploration stage mining stocks much closer to home to get in on the action. Canada based Azincourt Energy Corp (TSX-V: AAZ;OTCMKTS: AZURF) is one such potential small cap focused on building a value-based portfolio of lithium, uranium, cobalt and other critical clean energy elements to capitalize on macro trends towards cleaner and greener energy. The Company’s core projects are located in mining friendly Canada and include two uranium exploration projects in the prolific Athabasca Basin of Saskatchewan and a 5-property lithium project in Manitoba.   Azincourt Energy Corp’s Lithium Projects In January of 2018,Azincourt Energy Corp signed a definitive agreement with New Age Metals (TSX.V: NAM) to acquire up to 100% interest in five lithium exploration projects (the Lithium One, Lithium Two, Lithman West, Lithman East and Lithman North projects)located in the Winnipeg River Pegmatite Field located in Manitoba. The Winnipeg River Pegmatite Field is host to numerous lithium-rich pegmatite rocks in addition to the world-class Tanco Pegmatite consisting of lithium-cesium-tantalum (LCT) types of rocks that have been mined at the Tanco Mine since 1969 for spodumene (a major rock unit for lithium), tantalum, cesium (the mine is the world’s largest producer of this particular mineral), rubidium and beryllium ores. Azincourt Energy Corp’s Lithman West and Lithman East projects are actually adjacent to the Tanco Mine lease property while three of the five projects covered in the agreement are drill ready (Lithium One & Two and Lithman West). When the agreement was announced back in January, President and CEO Alex Klenman had commented:     “Our corporate strategy is to identify, acquire and develop highly prospective projects that will add immediate value in addition to presenting measurable upside. The addition of the Manitoba lithium properties is but one step in this process. We are currently conducting due diligence on additional projects in the clean energy-clean fuel space that would expand our portfolio and continue to add value” Chairman Ian Stalker had added: “This definitive agreement highlights Azincourt Energy’s continued determination to be part of the solution to the increasing demand for battery metals, for today and tomorrow’s EV revolution. We continue to look to unlock shareholder value from previously worked properties that have distinct promise and where our team can add input from their collective experience.”  It’s worth adding that Mr. Stalker has over 45 years of hands-on experience in resource development having directed over twelve major mining projects, from initial exploration drilling to start-up, including gold, base metal, uranium and industrial minerals. He is also the former CEO of UraMin Inc., the London and Toronto listed public uranium company that was acquired by Areva for US$2.5 billion in August 2007.      Exploration work is already scheduled to begin in late March (or early April, depending on weather) with a field program that includes detailed mapping of known pegmatite rock outcroppings on the Lithium One and Lithium Two projects. Over the coming months, the SmallCap Network will be closely following Azincourt Energy Corp’s progress towards developing these potential new sources of lithium along with other key clean energy minerals.