http://www.ibtimes.com/articles/20090910/lithium_2.htm
TER: Can you share some companies that our readers should look at?
Sure. There are a few that I like. Galaxy Resources Limited, currently a favorite of mine, recently completed a definitive feasibility study (DFS) that suggests the Mt Cattlin Lithium / Tantalum project (Ravensthorpe, Western Australia) is commercially viable, based on a processing rate of 1 million tons per annum over a 15-year mine life. The company is planning to begin developing the mine in Q3 with first concentrate production scheduled for Q3, 2010.
GXY recently signed agreements for financing of its lithium project with China's Creat Group, raising at least A$26 million for the company. In addition, Creat will provide Galaxy with 100% debt finance of approximately A$130 million for the purpose of developing both the Mt Cattlin spodumene (lithium/tantalum) and Jiangsu lithium carbonate projects.
One advantage GXY's JV has is that Creat requires no off take product and GXY is free to market its own product and thereby take advantage of any upward pressure on Lithium Carbonate prices.
Another is TNR Gold Corp. (TSX.V:TNR), a project generation company that has been around for a long time. Fortuitously they have 15 projects in Argentina, some with senior and mid-cap JV partners including Barrick Gold and Xstrata, and the Argentine experience gave them an early stage leg-up on acquiring one of the low cost brine-based salares (salt lake) in the Salta region close to a Orocobre (ORE:ASX) Li project currently undergoing a Bankable Feasibility Study as it advances towards production expected in 2012. TNR intends to spin out its Li and Rare Earths division in Q1 2010 and also has attractive copper and gold projects. As the pieces of TNR are developed and/or carved out, I expect investors to be well rewarded and as the projects are explored, and ideally, developed.
Finally, early in the year at half the current share price we recommended Canada's Western Lithium, which has a NI 43-101 resource estimate for the initial stage of development at its flagship Kings Valley, NV, property. The project total hosts a historically estimated (by Chevron Resources) 11 million tons of lithium carbonate equivalent (LCE). While I still like the project because it is one of the largest Li resources in the world (#6), after the recent share dilutions and share price rise I currently have the stock rated as a "Hold." While one could add a small position to have some Li exposure, without aggressive assumptions still far from certain I would not buy the stock unless it corrects-ideally under C$1.00.
WLC's Stage 1 project is huge, boasting an indicated resource of 48.1 million tons grading 0.27% lithium with a lithium carbonate equivalent (LCE)-688,000 tons and 42.3 million tons grading 0.27% lithium (LCE - 606,000 tons) inferred. A scoping study is planned for completion during the current quarter, which could show attractive mineral by-product credits, and the company hopes for first production in 2013. I expect it would be no sooner than late 2013 owing to the novel metallurgy of this hectorite clay-based deposit.
