There will be nothing more explosive on the commodities market over the next few years than lithium, and 2017 was ushered in with a big bang as Tesla turned the switch on its battery gigafactory in Nevada, raising the prospects of lithium-mining euphoria to new levels.

Tesla already has some 330,000 orders for its Model 3 electric vehicle—100,000 of which it has promised to deliver by the end of the year—and securing lithium supplies has never been more critical.

In this atmosphere in which long-term demand is going to bludgeon supply unless we get new projects developed fast, it’s great to be a small-cap miner with its hands on very big lithium—like Millennial Lithium Corp. (TSX.V:ML).

Firing up the gigafactory has done wonders for Tesla’s shares. They’re up to their highest since August 2016, and are expected to jump even higher when the Model 3 is released to the masses. It’s also set to do wonders for lithium prices, and lithium stocks.

Lithium isn’t scarce, but it is a race to the finish to see who will develop new supply first, and one of the hottest arenas is Argentina, in the heart of Latin America’s “Lithium Triangle”.

Right now, some 90% of global lithium production is controlled by four players: Albemarle Corporation, FMC Corp, SQM (Sociedad Quimica y Minera de Chile) and Chinese lithium giant Sichuan Tianqi Lithium Industries. But this cartel is in its last days, and Millennial Lithium Corp. (TSX.V:ML) is one of the most promising new players in the lithium patch, and it just came back with positive analytical results from its first two completed exploration wells at its flagship project in Argentina.

3 Reasons to keep a close eye on Millennial in the lithium race:

#1 The Battery Market’s Voracious Appetite

Grabbing the bull by the horns has never been a more appropriate axiom than right now, and precisely with lithium. This is a bull market, and it’s going to be a long run.

According to Macquarie Bank, the share of lithium demand from electric and hybrid vehicles is due to surge from 10% in 2015 to 33% by 2021.

But you have to see the whole picture here. In 2014, lithium prices started to soar because of a supply deficit. The run on investment in lithium and the pace of new projects has caught up with that a bit, but while 2018 might see supply briefly catch up with demand, it won’t last long.

Lithium expert Joe Lowry says demand should double between now and 2020, driven by the massive battery market, producers are in no position to keep up with this in the medium or long term.

As the acceleration of EVs into the mainstream picks up astounding momentum, the big question is: Where are the batteries to power the going to come from? The answer is around a dozen battery gigafactories. But it means nothing without lithium. Today’s global lithium-ion cell production is only enough to supply around 900,000 to 1 million units, which is only about 1% of the demand considering 100 million light EV sales, according to Evercore ISI analyst George Galliers. PriceWaterhouseCooper (PwC) also agrees that “supply will continue to trail until new projects come online in the next five years.”

Prices have tripled—but that was even before the battery gigafactories got off the ground. Tesla’s has already opened in Nevada, and 11 more are in play. The battery supply chain is exploding, and the math is brilliant.

As Lowry puts it: “No matter what certain “experts” say – supply and demand are NOT in balance. If the market is adequately supplied, why are we having the current price run-up?”

#2 Argentina Is the Sweet Spot in the Scramble

The global ground zero is lithium-rich Argentina, where massive resources have combined with a new business-friendly political atmosphere to create a situation in which everyone is talking about a lithium cartel, and the rise of the next energy barons.

Here, in the heart of the ‘lithium triangle’ in Argentina, Millennial Lithium is on track to acquire 100% of the coveted Pastos Grandes project in the lithium-rich Salta province—and it could be put into full production in just three years. At about that time, projections are that lithium supply will be tighter than any other commodity—in history.

And once you’re in the ‘Lithium Triangle’, there really isn’t any better place to be than Argentina. Why? While Argentina’s known lithium reserve share is slightly lower than Bolivia’s or Chile’s, doing business in Argentina is much more promising.

While Chile has the most mature lithium industry in the ‘Triangle’, investment and regulatory complications make it a more daunting venue. At the same time, while Bolivia has the largest single deposit of lithium, it only has a rudimentary infrastructure, and—again—the regulatory environment poses many challenges. But Argentina is a different story altogether: Here, the regulatory environment is set to actually encourage lithium mining and investment, and it’s poised for the fastest growth rates.

This is exactly why Millennial has chosen Argentina as its springboard to becoming a major new lithium supplier. After years of mismanagement of the country’s natural resources, President Mauricio Macri’s administration has scrapped taxes on mining exports, allowing the companies operating in its part of the Lithium Triangle to collect better revenues from their local operations.

Millennial has an extensive presence in the Lithium Triangle, in Argentina’s lithium-rich Salta province. And most importantly, these reserves have already been confirmed by geophysical surveys, exploration wells and evaporation tests. To put a finer point on it, Millennial has scooped up a project that it already knows has abundant lithium brine—the easiest and cheapest to extract. Not only that, but the Pastos Grandes has a lithium brine deposit that is 4-5 times higher than the grades in Nevada.

Even better, as we fast-forward this play: On 25 January, the company got some great news with positive results from its first two completed exploration wells at Pastos Grandes. Drilling has confirmed the extension of lithium grades and favorable brine chemistry, and pre-operational tests indicate a capacity for high flow rates. What this means is that the lithium brine capacity here extends much further than Millennial thought when it acquired the project.

#3 Fast-Movers will be major winners

Millennial Lithium Corp. (TSX.V:ML) has risen 6% since December 19, and is still trending up. On the rising energy revolution euphoria, the US$43.04-million company has had five months of positive chart set-up.

The positive set-up is in part due to a management team that believes in maintaining visible momentum. At its Pastos Grandes project it just announced that it’s adding a third drill site to its program in order to delineate a continuous resource block and complete an initial resource estimate. And it has already completed exploration drilling at two sites with brilliant results.

The company is on track to buy the 1,221-acre Pastos Grandes lithium deposit in full and will be ready to start production there inside three years. Expansion is the key for this company, and it’s already negotiating the acquisition of another 4,236 acres in the province, quickly scrambling for equal footing with the biggest lithium miners.

Millennial also isn’t going to get hung up on logistics, which contributes to its fast pace. It has chosen acreage next to the biggest railroad in the region, and won’t have to invest anything into transportation infrastructure. Once they start producing, it’s straight to the market.

Pastos Grande is just the beginning. Millennial is also looking closely at the Cauchari East project, in Argentina’s Jujuy province. This 2989-acre property is in direct proximity to operations run by major lithium producers Orocobre (ASX:ORE) and Lithium Americas Corp. (TSE:LAC), thus reducing investment risk thanks to the confirmed lithium resources in the area.

As Tesla’s Model 3 prepares for its debut among the masses, and the lithium demand equation starts to become a critical reality, the rush on new lithium supplies is a point where it’s about separating the experienced miners from the rest, and Millennial’s management—which includes former supermajor mining superstars—is ready to emerge as one of the best set-ups for cornering this hungry new market.

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