Analysis - Lithium

Lithium


Lithium

Lithium (chemical symbol: Li) is the lightest of all metals. It does not occur as a pure element in nature, but is contained within stable minerals in a range of hard rock types or in solution in brine bodies within salt lakes, in sea water or geothermal brines. The contained concentration of lithium is generally low and there are only a limited number of known resources where lithium can be economically extracted.

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Summaries:

Executive summary

  • Nemaska Lithium secures a 8000t LCE per annum off-take with FMC
  • LCE prices seem to be bottoming for now, a deficit is still expected well into 2018
  • The upside for the Nemaska thesis is still intact

Executive summary

  • Nemaska Lithium has one of the best hard rock lithium deposit worldwide
  • The Whabouchi project, located in mining friendly Quebec, is fully permitted, and has the second highest grade of lithium oxide and second largest hard rock reserves globally behind the Greenbushes deposit in Australia
  • An updated Feasibility Study has been completed this year, generating solid results with an after tax NPV8 of US$928M (C$1.2B) and IRR of 30.3% based on a $439M capex and conservative $9500/t lithium hydroxide price, making it the most advanced lithium project around, and indicating lots of upside left after the recent run up
  • Nemaska just finalized the $12M Johnson Matthey Battery Materials off take agreement which was the last building block needed to complete the $38M funding needed for the important Phase 1 plant, and expects to start production from the Phase 1 Plant in Q1 2017
  • Through a series of catalysts, commercial production of the Whabouchi Mine and commercial Hydromet plant is planned to commence in H2 2018, which makes it the first new lithium producer in the Americas after Orocobre, and is in time to profit from the rapidly developing global EV/energy storage/fossil free trend

Executive summary

  • Wealth Minerals is in the process of acquiring a part of Salar de Maricunga in Chile, a brine lithium project, by taking over Li3 Energy
  • The Maricunga project has been ranked as the 4th best brine project in the world
  • The local situation is complex, but CEO Henk van Alphen, COO Xiaohuan Tang and newly appointed executive director Marcelo Awad are respected, experienced and successful businessmen in China, Latin America and especially Chile, and are working out a possibly very interesting solution
  • With current developments in electric vehicles and energy storage fueling lithium prices to unprecedented levels, problematic or even absent production expansions, the lithium carbonate supply/demand situation seems constrained for many years to come, creating healthy market fundamentals for Wealth Minerals

Executive summary

  • Lithium X has experienced quite a runup during it's first four months of being listed, generating excitement but also negativity
  • After acquiring an Argentinean brine project, significant substance has been added to the story in my view
  • This Q & A with Executive Chairman Paul Matysek discusses a number of subjects, with the intention to provide useful insights about the company and its projects