BYD Motors and Lithium Batteries - UXG, MAI, TNR

Hedge Fund Managers are impressed with BYD and its progress on lithium batteries - if Warren Buffet can be convinced of lithium-cars and batteries - can you?

Lithium-Ion Batteries for Hybrid Vehicles?

BYD seems to be doinf well with ferrous oxide. I’m referring to the Chinese electric car company “Build Your Dreams” (BYD) (see www.byd.com/company.php). CEO Wang Chuan-Fu, who Charlie Munger describes as a combination ofGeneral Electric’s (GE) legendary manager, Jack Welch, and inventorThomas Edison, scraped up $300,000 from relatives to start a knock off cell phone battery company in Shenzen in 1995. He grew the company into a massive, vertically integrated conglomerate, employing 130,000workaholics at 11 factories, including those in Hungary, Romania, andIndia (interesting choices). BYD bought a defunct car company in 2003 and re-engineered it to launch the $22,000 F3DM sedan last year, an old technology ferrous oxide based plug-in hybrid that gets 62 miles on a charge. General Motors (GMX) Volt and Toyota’s (TM) plug in Prius,which won’t come out until next year, will only get 40 miles per chargeand cost more. All-electric models are coming out this year. Warren Buffet was so impressed, he made a rare foreign investment last year,asking for a 25% stake and settling for 10% for $230 million. Wang, who has already earned himself a place on the Forbes 400 list, intends to build BYD into the world’s largest automaker, and quickly. Why do Ifeel like this war is over before the first shots were even fired?

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Rumor milll has it recently that Minera Andes (MAI:TSX), one of our longtime favorite stockpicks here at Mining101, could be a takeover target for another one of Rob McEwan's companies, the well-capitalized US Gold (UXG:TSX)

US Gold has primarily been focusing on gold in Nevada so it's a bit of a stretch to assume it wi considering taking over Los Azules (copper) and the non-operating interest of San Jose (gold/silver).

US Gold has the ideal gold explorer model down pat - value is created in the discovery and exploratino phase for shareholders. By the time mineral reserves are proved the value has been created from pennies to dollars - investors who risk getting in early has already won the rewards.

This is a very similar path for Canada Zinc Corp (CZX:TSX) who has had a difficult journey so far proving a significant resource on a commodity that fell out of favor at the height of the financial storm of 2008.

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TNR Gold Corp (TNR:TSX) is in the middle of closing its Private Placement - and understandbly seenig some selling pressure. Why this is usually the case is participants in the PP would sell their current shares (presumably around the PP level price) and in return get a share + warrant.

A warrant has a certain price level and is an excelllent low-risk way to have additional exposure to profits in case the stock runs later on news of results.

The company confirms portions of the proceed will be used to develop a 43-101 resource on a key asset from which International Lithium will go public on. Our guess is the large Mariana lithium brine lake, which spans 120 squared kilometres of liquid. Can you imagine what the resource estimate will be?!?

Production is simple

Example of a large lithium lake

The start of the Chinese buyout on TSX? TNR.v, CZX.v, MAI.to, Los Azules, Copper, Lithium, Rare Metals

Remember the saying, "Ze Germans are coming"?

Seems like these days it's more like "The Chinese are comin"!

One of our favorite copper project - Los Azules - so far in 2009 has attracted Mr. Goldcorp, Rob McEewan, and now seems like indirectly has drawn the attention of the major copper producer from People's Republic of China.

Take a read at the latest press release from TNR:TSX, does it sound like just one TSX small time miner investing a few hundred thousand dollars in another one?

CZX:TSX - has an excellent property but it has fallen drastically from its lofty $1+/share mark that it saw most of 2008. To add fuel to the fire, changing its name from Mantle Resources to Canada Zinc Corp has isolated the Vancouver firm further as a one-commodity junior...

Zinc prices continue to decline

LONDON — Sliding zinc prices are taking their toll on mining companies, but the market will not turn around anytime soon, industry analysts say.

Mine closings and production cuts have occurred as energy, labor and equipment costs rise while zinc prices drop.

And the pain will continue. The question is whether weak demand and global oversupply will keep prices falling into 2010, or whether the market will turn around next year.

"We would need very, very, very significant production losses to bring the market back to balance" in 2009, said Giles Lloyd of CRU Group, an industry consulting firm. "Some producers are now realizing that they were being a bit hopeful thinking that the market could turn in 2010."

Zinc, mainly used to galvanize steel, is one of the worst performers in the metals field this year. In August it dropped to its lowest level since November 2005; it now trades at around $1,745 a metric ton, down almost 25 percent so far this year.

It is no wonder that prices have dropped.

Zinc stockpiles at the London Metal Exchange have jumped 80 percent this year to 160,000 tons, and a Reuters survey of analysts showed an expected surplus of about 281,250 tons this year, growing to 328,758 tons in 2009.

However, some market watchers still expect a shift to a deficit in 2010 as producers cut spending and smaller companies, which typically operate zinc-lead mines, struggle to find financing for new projects and to gain environmental approvals.

"The market will turn around quite considerably in 2010," said Gayle Berry, an analyst at Barclays Capital. "The concentrate market is going to move into deficit due to closure of mines." She added that some smaller mines would reach poorer grades of ore.

Berry expects prices to average $2,073 a ton this year, $1,900 in 2009 and to jump to $3,100 in 2010.

A Reuters poll in July found that zinc prices in the spot market were forecast to average $2,133 a metric ton in 2008 and fall to $2,000 in 2009. On Tuesday, cash zinc was trading at $1,762 a ton, and it has averaged $2,155 so far this year.

Weaker demand will also slow the recovery of zinc prices.

Lloyd, of CRU, said there were indications that demand in China, the world's biggest consumer of the metal, was beginning to slow markedly, and that the debate centered on whether internal demand would slow as export markets for China also weakened.

Consumption is also falling in Europe, the next-biggest consuming region, as economies there slow down.

European refined zinc demand fell 7.8 percent in the first half of 2008 from a year earlier, according to the International Lead and Zinc Study Group. Demand in Japan and the United States was little changed.

Still, Michael Jansen, an analyst at JPMorgan Chase, said: "The only way you are going to end up with a surplus post-2010 is if you assume a lot of mines are going to open and demand is going to fall through the floor."

Looks like CZX and its shareholders made an excellent decisino to invest in an undervalued junior that has gone up 500% already from its lows of January. Here at Mining 101 we recommended a buy of TNR and CZX back from its lows - while summer doldrums will likely dent the current price a bit with brokers and investors on vacation - longterm picture is still very favorable for both quality juniors.

TNR Raises $1 Million Nonbroker PP - CZX and Chinese Investments!

posted on Jul 07, 09 01:28AM

TNR GOLD ANNOUNCES STRATEGIC INVESTMENT BY CANADA ZINC METALS WITH PARTICIPATION IN $1 MILLION PRIVATE PLACEMENT

TNR Gold Corp. and Canada Zinc Metals Corp. confirm a strategic initial investment by Canada Zinc Metals in TNR as part of a private placement for up to five million units, priced at 20 cents per unit, to raise up to $1-million. Each unit consists of one common share and one-half of one common share purchase warrant. Each whole warrant entitles the holder to purchase one additional common share of the company at a price of 30 cents for a period of 12 months from the date of closing.

Canada Zinc Metals is focused primarily on developing its flagship Akie property, a significant zinc-lead deposit in northeastern British Columbia, Canada, containing a National Instrument 43-101-compliant inferred resource of 23.6 million tonnes grading 7.6 per cent zinc, 1.5 per cent lead and 13.0 grams per tonne silver. As evidence of the quality of the properties owned by Canada Zinc Metals, a large Chinese mining group, Tongling Nonferrous Metals Group Holdings Co. Ltd., has recently invested $4.9-million in Canada Zinc Metals for a 13-per-cent equity position.

Tongling, a state-owned enterprise based in Anhui province, is one of China's largest copper smelting companies and ranked in the top 100 large-scale industry enterprises in China. Tongling's principal activities are exploration, mining, ore processing, smelting and refining, and products processing of copper, lead, zinc, gold, silver, and other non-ferrous and rare metals. China has over half of the world's deposits of rare earths, over 80 per cent of worldwide production, and has recently shown significant interest in becoming majority shareholder of various rare earth miners such as Lynus Corp. and Arafura Resources. TNR's non-executive chairman, Kirill Klip, will be taking a significant portion of the financing along with other insiders and management.

TNR president and executive chairman, Gary Schellenberg, states: "We are encouraged by the support in this current financing by insiders, management, and welcome the strategic investment from Canada Zinc Metals and all its stakeholders. It is clear that our recent aggressive acquisition plan of lithium and rare metal properties around the world, along with continuing developments on our copper-gold properties in Argentina, is attracting significant attention in the mining and investment world."

Peeyush Varshney, chairman and chief executive officer of Canada Zinc Metals, commented: "This strategic investment into TNR and its proposed spinoff subsidiary, International Lithium Corp., will give our shareholders diversification into the growing opportunities that rare metal industries are offering. Furthermore, the investment gives us an interest in TNR's stake in the significant Los Azules copper project in Argentina."

A finder's fee of 7 per cent on a portion of the proceeds raised is payable in cash, in units, or a combination of both, at the election of the finder. Any units issued in lieu of cash will be on the same terms as the units of the offering. All securities issued pursuant to this financing are subject to a four-month hold period from the date of closing. The offering is subject to TSX Venture Exchange approval and any regulatory approvals.

Proceeds of the private placement will be used to finance the evaluation of TNR's lithium and rare metal properties, implement the proposed spinoff of International Lithium, and for general corporate purposes.

Luckily - this new investment may have a shot of breathing some new life CZX not to mention needed excitement! TNR Gold is a dynamic group that has been making newspaper and interview headlines with their lithium projects.

Taken from http://www.tnrgoldcorp.com/s/Media.asp

CBC Interviews TNR Gold on Lithium in Northwest Territory
http://www.internationallithium.com/i/pdf/CBC-TNRinterview.pdf

Vancouver Sun Article - TNR Gold Corp (International Lithium Spin-off)
June 4, 2009
http://www.vancouversun.com/Business/Trading+rises+unemployment+falls/1663973/story.html

Resource World - Lithium Exploration
June 9, 2009
http://www.internationallithium.com/Z-files/ResourceWorld-2009-Jun-Lithium.pdf

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More info about Tongling:

http://www.tnmg.com.cn/english/

Tongling Nonferrous Metals Group Holdings Co.,Ltd. is located in the Tongling City of Anhui Province, where is one of the cradles of China's Bronze Culture and entitled with the name "China's Ancient Bronze Capital", Tongling Nonferrous Metals Group Holdings Co.,Ltd. enjoys favorable geographical position that closes to both Yangtze River and sea, and has convenient transportation.

As one of China's earliest copper production bases, Tongling Nonferrous Metals Group Holdings Co.,Ltd. has put into production in June 1952. After development of half century, now this incorporation becomes an extra large scale complex that engages mainly in copper mining, mineral processing, smelting & refining and copper products processing, and also involves in trade, scientific research and design, machine building, construction & installation, shaft & drift construction and tourism industry.This incorporation is one of the 300 enterprises that being given special support by the nation and one of the large scale enterprises being given preferential support by Anhui Provincial government.

Successful Investing takes courage - LUN, TNR, MAI, CLQ, WLC

Lundin Mining has bounced back from its lows of last year $0.70 to $3.00+! Goes to show that in mining business - perception can scare people off from excellent opportunities.

Lundin's background.

Lundin Mining Corporation is a diversified base metals mining company with operations in Portugal, Spain, Sweden and the DRC. The Company currently has four mines in operation producing copper, cobalt, nickel, lead and zinc (Neves-Corvo in Portugal, Zinkgruvan in Sweden, Aguablanca in Spain and Tenke Fungurume in the DRC). In addition, Lundin Mining holds a development project pipeline which includes major expansion programs at its Neves-Corvo and Zinkgruvan mines. The Company also holds an extensive exploration portfolio and interests in international mining and exploration ventures. Lundin Mining's corporate headquarters is in Toronto, Canada, and its operational headquarters in London, UK. Lundin Mining's shares are listed on the Toronto Stock Exchange ("LUN") and its Swedish Depository Receipts are listed on the OMX Nordic Exchange ("LUMI").

With heritage and a series of excellent projects, buyouts, and mergers under its belt, it was crazy in February of 2009 to think a prestigious brand such as Lundin could be below $1.

Just a few years ago, Lundin bought out every joint venture partner that the project generation group TNR Gold Corp put out - including the $15/share buyout of Tenke Mining which made shareholder millions.

Keep in mind this was just in 2007 August http://lists.miningwatch.ca/pipermail/news/2007-April/001290.html
Now, in the space of less than a week, Mr. Lundin has followed 
through and then some. In the past seven days he has unveiled a pair 
of billion-dollar deals, including a $1.4-billion all-stock offer 
yesterday for Tenke Mining Corp., which owns a 25-per-cent stake in a 
copper deposit in the Democratic Republic of Congo that is one of the largest undeveloped ore bodies in the world.

The same opportunities now lie with various mining juniors we frequently cover here on Mining 101. The question is - can you stomach the risk of getting in early?

$1,000 initial investment in MAI.TO at its low when we mentioned it last August would have turned into $1,300 pretax if not more if you sold when McEwan became CEO - $0.40 to $1.05+. We expect even more from Minera Andes - just look at McEwan's other groups - Rubicon Minerals and US Gold - $1 to $3 during this recovery boom for metals.

We follow winners and there's no better winners than founder of GoldCorp and the group we are reviewed earlier today, Lundin Mining. Coincidentally, Lundin has had several successful dealings with this next group, TNR and its subsidiaries. In fact, Lundin could even be getting into the green energy business through TNR... from its past history (TNR + Tenke Mining!)

A $1,000 investment in lithium powerhouse TNR Gold (international lithium) at its March 2009 lows of $0.04 is now at $5,000...we are expecting more following its update on Los Azules, and the eventual spinoff of a new IPO - lithium developer ILC. Last I checked - nobody on TSX has anything remotely close to what these guys have done with such a small budget. Read the About TNR section on their latest press release:

TNR is a diversified metals exploration company focused on identifying new prospective projects globally and upon approval of pending licences in Ireland, will have a total portfolio of 32 properties, of which 16 will be subject to the proposed spin-off of International Lithium Corp ("International Lithium"), TNR's wholly owned subsidiary.

It is anticipated that TNR shareholders of record will receive one share and one full tradable warrant of International Lithium Corp. for every 4 shares of TNR held as of the yet determined record date. This will result in TNR shareholders owning shares in both TNR and International Lithium. For further details of the spin-off please refer to TNR's April 27, 2009 news release or visit http://www.internationallithium.com

The recent acquisition of lithium projects in Argentina, Canada, USA and Ireland confirms the company's commitment to project generation, market diversity, and building shareholder value.

We've done the comparison before - but other than Canada Lithium (with one hardrock mining project past producer in Quebec) and Western Lithium (claiming hectorite clay extraction is economical - never been proven) - who else has significant worldwide holdings except for these guys? Feel free to post up comments if you come across - we will try and review other companies and give our opinions.