On Wednesday, September 16, Nevada’s Pure Energy Minerals (OTC: HMGLF) announced the signing of an agreement with Tesla Motors Inc (NASDAQ: TSLA) To say that this is blockbuster news for the Company would be the understatement of the decade and in fact might not even suffice. Each agreement between Tesla and a junior company is unique. For the avoidance of doubt, here’s key parts, of the press release, quote, (modestly shortened by me):

“Provided that Pure Energy meets terms and conditions related to project’s quality and timing of delivery, the Agreement establishes a commitment for annual purchase volume over 5 years by Tesla and/or its authorized purchasers. The Agreement sets a pre-determined price that is below current market rates and aligned with Tesla’s goal to reduce the cost of its lithium ion batteries. The supplied lithium will be used in the battery cell manufacturing process of Tesla’s rapidly growing electric vehicle and stationary storage units. Any deliveries from Pure Energy will cover a portion of Tesla’s needs with the remainder to come from other sources.”

This agreement represents much more than merely a potential off-take partnership. This is a HUGE vote of confidence for Pure Energy Minerals, its shareholders, future investors, (including new looks from institutions) and prospective strategic partners. Consider the relative ease Pure Energy will now have with this Tesla news in their back pocket. Consider the relative ease for Pure Energy to obtain financing when that need arises. Consider the ability of the Company to move rapidly with Nevada State officials on permits and approvals. For these reasons and more, this single press release is worth more than any other news possible.

Stepping back for a moment, on September 3rd, Tesla’s Founder Elon Musk reiterated his commitment to source materials from Nevada. However, that pledge did not necessarily mean another sourcing deal, announced so soon, or that it would be for lithium. Other materials besides lithium will be required. Cobalt and graphite, (among others), will also be needed to feed Tesla’s massive giga-factory in Nevada. I find this agreement to be highly noteworthy in the sense that Tesla’s growing need for lithium, perhaps more so that that for cobalt and graphite, represents the single most important raw material need. I imagine that other lithium agreements will be signed in coming months. Without question, Nevada wants further lithium deals to come from Nevada. Western Lithium and Dajin Resources are two other lithium juniors in Nevada.

Disclosure: Several of the companies mentioned herein have small market caps, including Pure Energy and Dajin Resources, small market cap stocks are highly speculative, not suitable for all investors. I, Peter Epstein, own shares of PE.V. and DJIFF. Mr. Epstein, CFA, MBAÂ is not a licensed financial advisor. Readers should take that fact into careful consideration before buying or selling any stock mentioned. Readers are encouraged to consult with their own investment advisors before buying or selling any stock, especially speculative ones. At the time that this article was posted, Dajin Resources and Pure Energy were sponsors of: http://EpsteinResearch.com.