A copy of the article found
here courtesy of one of the better
groups that has yielded a nice return of nearly 700%+ since the lows of 2008.
As it's been about half a year since the lithium boom (so to speak) - let's review performances so far of some of the prominent guys covered in this trade article, shall we?
Few of the heavy hitter are the majors - who we can all agree are FMC:NYSE is one of the major players.
Then there is SQM Chemetall (in Chile/Argentina area) as well, and of course our North American favorite, Rockwood Holdings (ROC:NYSE) who operates the Silverpeak Operation in Nevada.
Here's where lithium is interesting - there's not much of a mid-cap producer in lithium.
When we identify the lithium trend back in
February 2009 , nobody really cared about lithium. Nowadays junior companies, both credible ones and overly-promotional groups (American Lithium AMLM, Lomiko, and Li3Metals come to mind...), are all showing off their shiny lithium / REE acquisitions.
Which ones have done well? See the comparison below.
TNR has done exceptionally well compared to lithium juniors - arguably even better once its new public entity is fully trading.
1) TNR Gold Corp (TNR.v TSX)(aka.
International Lithium) - You can't blame us for liking this group. Back in the lows of last year, these guys held up their head, raised financing, and started acquiring lithium and rare metal assets like no tomorrow...knowing the
trend's in their favor. Following our recommendation to load up and average down back in February 2009, you would be up nearly 800-900% depending on your base.
In fact, their idea about spinning off a new public companies to shareholders was a direct copy of Western Lithium's hugely successful divestiture from Western Uranium.
TNR is now trading at around $0.33 - $0.36 range. Excellent entry point considering its one of the cheaper lithium juniors that have credibility, nice diversified assets, and upside potential still.
We anticipate a run-up in prices as the spinoff of
International Lithium (ILC:TSX?) approaches. Management has indicated timeframe of before April 2010. (first quarter).
2) Orocobre on the Australian Exchange (ORE :ASX) - the recent Toyota deal has really made this stock fly further. When we first mentioned ORE:ASX, they were a relatively unknown company on the ASX, quietly developing their high potential lithium brine in
Argentina.
They have a nice resource estimate and advancing to a $5 million prefeasibility. Being one of the most advanced groups in Argentina (other than producers) gave ORE a huge advantage.
Local US (Houston) venture capitalist Calaway group (J. Calaway) is the proud entrepreneur behind this deal. If you check his background you will see he is well respected in Houston and has advanced many social projects and non-profits. This is the credibility we like to see. As an aside we believe
TNR and its new subsidiary has the potential to be the next ORE...they are even using the same engineering group in Argentina and arguably has a larger brine nearby.
Mining101 first picked up ORE:ASX around $0.30 around early 2009. It closed around $1.80 today.
3) Rodinia Minerals - Dropping their uranium credits, RM.V has done a 180-degree and became an entirely lithium-based explorer following their success in Nevada. Their projects are awfully close to TNR Gold / International Lithium's.
Having recently hired promotional speaker,
Peter Grandich to hype the stock, RM has continued to step up, closing at $0.61 this weekend.
4) Western Lithium - While I don't believe in the lithium from clay business model at all. (see my past entries on
WLC), I have to say WLC has done an excellent job attracting the big players from the get-go. Careful digging will reveal they seem to have the blessing of the Ivanhoe group.
Knowing Robert Friedland is thinking about lithium and future energy issues - makes me smile that I have some money on lithium.
Potash One anyone?
5) Canada Lithium - if you like hard rock lithium production, be our guests! We don't believe its' economical and the famous TANCO Mine in Canada easily proves that.
Sporadic mine work stoppages when lithium prices dip and switching to tantalum/rare metals production is not our idea of a steady cash flow.
Worse yet, I don't believe there's any rare metals reserves at CLQ's Quebec Mine.
If you got in at the $0.25 financing, I would look for an exit around $0.60. Producing from hard rock is far too uneconomical, and with SQM cutting 20% of prices it literally puts resources such as CLQ out of business.
Recent drop of their Nevada brine also makes me worry of longterm prospects of CLQ. No major automotive groups or end users have elected to adopt a hard rock project (esp one w/o rare metals / REE credits!)
Its no wonder they dropped it. Read the NR yourself!! At less than 10% of equivalent PPM at Western Lithium, only guys who would pick it up later would be
American Lithium!! Don't you love drama in the mining juniors weekly?!
Gold Summit loses Nevada lithium JV partner
2009-11-05 12:21 ET - News Release
Ms. Andrea Rascati reports
GOLD SUMMIT GAINS 100% INTEREST IN NEVADA LITHIUM BRINE EXPLORATION: JOINT VENTURE PARTNER WITHDRAWS
Gold Summit Corp. has received notice today that Canada Lithium Corp. has withdrawn from the Nevada lithium brine joint venture in order to concentrate on its Quebec lithium pegmatite resource. Canada Lithium held a 75-per-cent interest in the joint venture.
Analytical results from the first test well drilled by the joint venture in the Paymaster area are now available. They show that the saline water encountered below 150 metres contains only weakly anomalous lithium values (eight parts per million) despite the highly anomalous values in the containing clastic sediments. These average 316 parts per million lithium between 150 and 365 metres, in a range between 130 parts per million and 940 parts per million lithium. These high indicate that some lithium clays, probably hectorite, are present, but could not be competitive with other hectorite-bearing clay deposits with lithium values in the 3,500 parts per million range.
Commenting on the drilling results, Dr. Anthony P. Taylor, chief executive officer of Gold Summit, said: "We are obviously disappointed that our first well does not contain economic levels in brines, but the lithium-enriched sediments indicate that abundant source rocks are present. We now have a 100-per-cent interest in the project that includes a large database and some 15 other target areas. We are in the exploration business and success is rarely immediate. Given suitable funding, we plan to continue the search for a new economic lithium brine deposit, although not to the detriment of our core high-grade gold and silver efforts."
Larry Kornze, a GSM director and a registered professional geologist, designated as the qualified person under National Instrument 43-101, has reviewed and approved the contents of this news release.
We seek Safe Harbor.
____
List of questionable Lithium Juniors
1) First Lithium (MCI.v) - Alberta Lithium brines, not to mention the group famously jumps on any promotable commodity of the day worries us due to lack of longterm credibility.
2) American Lithium (AMLM.OB) - OTCBB companies scare the heck out of us. And we are a fairly accredited group of investors who knows our way around financial statements, filings, etc. Thing is, there ISN'T much fililngs around AMLM.
The fact they're hyping small Nevada footprint projects they have as Saudi Arabia of Lithium is scary enough. I'd expect SEC to step in any minute now...
Short sell AMLM, anyone? It's on a huge down trend.
3) Lomiko Mines - LMK.V - Let me know? Aside from the odd name, virtually unheard of lithium junior came from a relatively unsuccessful TSX junior that has dabbled in
4) Li3 Energy - you gotta see the website! It's a guarantee to bring a smile to your face.
Dear sakes, the investor page is branded with a bulls-eye-mark on a wad of cash!! Now I'm not sure what says credibility, but last I checked most regulatory bodies in the world would frown upon that.
Short term trading yes - not a chance in the world a credible company will be associated with these clowns.
Don't worry there's more to come.
Remember a few months ago when the lithium rush began? Oh yes, it really hit mainstream with the cover page of Resource World featuring some of Canada exchange (TSX Venture's) best and brightest juniors.
