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Editor's note: This column is part of InvestorPlace.com's Best Stocks for 2022 contest. Joanna Makris' pick for the contest is Arianne Phospate (OTCMKTS:DRRSF) stock.

It's a tough market out there at the moment. Yet, despite the recent pullback, Arianne Phosphate (OTCMKTS:DRRSF) stock is still holding strong among the carnage. Shares may be down 8% year-to-date (or YTD), but that's much better than the S&P 500's 20% drop over the same period.

Moreover, the global food crisis is real, and phosphate is one of the three essential ingredients in fertilizer. With Russia out of the market owing to the war with Ukraine and China having halted exports, supply is increasingly strained.

That said, I continue to view DRRSF stock as well-positioned to make a comeback in the second half of the year. And with that, could make a run at the top spot in the Best Stocks contest for 2022.

Arianne's Market Expansion

Arianne's Lac à Paul project is a rare deposit owing to its unique geology, which allows for high-quality concentrate. In contrast, most deposits contain contaminants that limit their applications in food production and industrial applications — raising safety and quality concerns.

Furthermore, Arianne's second important attribute is location. The company operates the largest greenfield phosphate deposit in a "safe" jurisdiction; In other words, a geopolitically-friendly country.

Security of supply has become a big problem given tensions with Russia and China — the two largest phosphate suppliers. Nonetheless, Arianne's project location in Canada provides a stable alignment with Western interests, particularly as companies in many industries are looking to source key supply chain ingredients.

Of course, this aspect of Arianne is important. But another key part of our investment thesis is that the firm is well-positioned to tap into markets beyond traditional fertilizer and agriculture. Since our last check-in, investors have an important update that supports our thesis that Arianne's deposit is "special" and high-quality enough to support advanced applications.

Last month, Arianne announced positive independent test results, which confirm its high-purity phosphate concentrate can be used in the production of technical grade phosphoric acid used in the production of batteries.

With that in mind, these test results are big news for two reasons. First, the company now has the potential to be a phosphate supplier to almost every major electric vehicle (EV) manufacturer. This includes firms like Tesla (NASDAQ:TSLA), Volkswagen (OTCMKTS:VWAGY), Ford (NYSE:F) and GM (NYSE:GM), who currently or have already announced plans to use Lithium Iron Phosphate (or LFP) batteries in their cars.

So, as I've discussed, not all phosphate is created alike. And these test results are a positive indicator that Arianne has the goods to deliver to the EV market with higher purity phosphate than most. Thus, DRRSF stock investors could see long-term gains because of it.

Strategic Business Moves

Beyond the automotive market, LFP batteries have the potential to play a key role in energy storage — a market that could exceed automotive demands and continue to drive demand for battery materials such as phosphate.

I always like to invest for the long term, but it's important to point out that Arianne is also thinking strategically. With that, the company recently announced the appointment of Michael Gentile as an advisor to the company. Gentile is a prominent strategic investor in the small- and medium-capitalization mining sector.

In addition to his engagement with Arianne, Gentile has skin in the game, so to speak. Specifically, he purchased 4 million shares of stock in the open market and secured an option allowing him to purchase an additional 2 million shares at $0.75 for a period of 18 months.

Given Arianne's nature as an agriculture play, environmental, social and governance (or ESG)-focused investors should also take note that the company is also one of the cleanest operations out there. Arianne's Lac à Paul greenfield project is located 30 km from a hydroelectric dam which supplies 75% of the company's entire energy requirements — mining, processing and shipping — via clean, green renewable energy.

Bottom Line on DRRSF Stock

Collectively, Arianne Phosphate looks increasingly well-positioned to become a strategic asset to companies across several end markets. In turn, I continue to buy Arianne stock now as an agriculture play, with a free call option on the electric vehicle and storage markets. I think it's a question of when, not if, Arianne's phosphate resources are tapped.

Additionally, despite the near-term market volatility, fundamentals remain intact. So, DRRSF stock remains a buy to me.

On the date of publication, Joanna Makris held a long position in DRRSF stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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