http://www.theenergyreport.com/cs/user/print/quote/3028?x-t=pub.view&utm_source=streamsend&utm_medium=email&utm_content=5689701&utm_campaign=The%20Energy%20Report%20%u2502%20Carmel%20Daniele%3A%20This%20Fantastic%20Crisis
Morning Coffee, Canaccord Capital (08/20/2009)
"Sanyo Electric, the world's largest maker of rechargeable batteries, rose the most in two months following news that the company will supply lithium-ion batteries to Toyota (TM). According to Nikkei English News, Toyota will buy batteries from Sanyo from about 2011 (source not cited). This follows Sanyo's July 3 announcement that it aims to quadruple sales to automakers by 2015 as people buy more gasoline-electric cars. However, Sanyo is not the source of the Nikkei report—Hideaki Homma, a spokesman for Toyota in Tokyo, denied the report and declined to comment on whether the carmaker is in talks with Sanyo. The company maintains that its policy is to provide lithium-ion batteries for any hybrid-car maker that wants them. Lithium-ion batteries have higher output and capacity than the nickel-metal hydride type that Toyota uses in the Prius and other hybrid vehicles. Last month, Sanyo posted a third-straight quarterly loss after a decline in sales at its components business, which includes rechargeable batteries. Sales fell 25% to 361.3 billion yen. The company said revenue at its components business, including semiconductors and rechargeable batteries, fell 29% to 164 billion yen. However in an interview Mitsuru Homma, head of the rechargeable-battery unit indicated that revenue from car batteries will likely exceed 100 billion yen by 2015. While the company declined to give a precise figure for the current level, this report put lithium back under the spotlight. An analyst recently highlighted that if a couple of million electric cars are sold in the next five years, this alone would equate to about 10%–15% of current lithium demand. The market for lithium, a very light silver-white metal, has grown steadily over the past decade due to rising demand for batteries in such consumer electronics as cell phones and laptop computers. However, it looks like the pending release of the Chevy Volt, the Nissan Leaf and other electric vehicles could be what is getting investors really excited. Interestingly, while junior explorers and developers of lithium stocks have rallied month-to-date. . .large-cap producers FMC (FMC), Rockwood Holdings (ROC) (mentioned on CNBC yesterday) and Sociedad Quimica Y Minera (SQM) have had modest returns of 0.1%, 4.5% and (0.9%) month-to-date, respectively. Note the most leverage to the lithium story, assuming all players execute equally, is in Rockwood, followed not far back by SQM, with FMC having the least."
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"My preferred way to profit from the coming lithium boom is through the company Western Lithium, which owns the largest known lithium deposit in North America. The near surface lithium clay deposit is located in Nevada, USA and was initially discovered by the U.S. Geological Survey and Chevron USA in the 1970s. Engineering work completed by Chevron, and later by the U.S. Bureau of Mines in the 1980s, is now being advanced by Western Lithium.
The company's flagship Kings Valley property has a National Instrument 43-101 resource estimate for the initial stage of development and in total hosts a historically estimated 11 million tons of lithium carbonate equivalent (LCE). The project has a well-developed local infrastructure, and Nevada has a long history in the metals and industrial mineral mining industry. The company plans a scoping study during Q3 of 2009, a pre-feasibility study with results from additional drilling during 2010 and projected production by 2013.
Western Lithium is well-funded and debt free with CDN$7.3 million cash on the books. They recently completed a $5.5 million private placement in May of this year and have a market cap of CDN$70 million. . .the stock has broken out recently on heavy volume. While some might view the stock as overbought, I believe lithium mania is only getting started and that Western Lithium will outperform its peers both in the short and long term. Despite the recent spike in price, shares are selling at a premium of just 20% to their highs, which were put in well before the recent flurry of bullish news. The last time the stock made a move like the current one, it continued to produce a gain in excess of 800%!"
- Gold Stock Bull
