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Dear Alphastox Subscribers,
The lithium market is starting to explode, and the main players over the last several years have been Argentina, Chile, Australia, and China. But that’s about to change Nevada is emerging as a key component of the coming lithium boom.
You might have heard the rumours of a lithium revolution. In fact, as
Oilprice.com says, investors and experts have been predicting it for the past few years. Well it’s about to become a reality as the popularity of electric cars increases and the demand for batteries grows. While other minerals collapse, lithium is just getting started. It is estimated that the lithium market could reach nearly
$16 billion a year by 2024 according to a marketing forecast published by Navigant.
Lithium is a cost-effective mineral, cheap and easy to extract. Now that North America has been pinpointed as a reliable resource, affordable American lithium resources will be a global game changer, according to James Stafford of O
ilprice.com.
Nevada has been identified as the third best mining jurisdiction globally by the Fraser Institute’s annual Survey of Mining Countries. Already renowned for its gold and silver mining, it is now gaining traction for lithium exploration. It’s no surprise that Tesla Motors chose this state for the location of its “gigafactory.” The company is expected to increase the size of the factory to up to 24 million square feet, which would make it among the world’s largest buildings. The “gigafactory” is expected to begin production next year and is planning on producing enough lithiumion batteries for 500,000 electric cars.
The demand for electric cars alone is expected to spike the demand for lithium. FMC Corp raised the price of its lithium products by 15% in October. An article published on Oct 27
th in
Business Day points out that prices for lithium overall are forecasted to rise strongly over the next two years. And Simon Moores, managing director at Benchmark Mineral Intelligence, told
CEO.ca that “the rise in lithium prices is just a warning sign of the supply crunch becoming a crisis if producers can’t meet the demand.”
It’s clear: this is an opportunity investors shouldn’t miss out on. Take it from Goldman Sachs, which stated on Oct. 20 that lithium batteries are opening up a massive and untapped opportunity for investors. Both public and private companies are flocking to the scene to stake out ground and eye potential partnerships and acquisitions. While these companies are working out the logistics of the process, very soon they will begin exploring and testing. Investors with a high risk tolerance seeking potentially astronomical returns need to watch the under the radar lithium explorers in the area. The market isn’t even that big right now; there was roughly $1 billion in revenues last year and 180,000 tonnes of lithium carbonate equivalent, according to analyst Chris Berry. The growth potential is massive, and it’s going to arrive quickly.
A junior company that I think is poised to capitalize immediately is
Lithium X Energy Corp. (TSX.V:LIX), which has recently entered the Clayton Valley lithium play in Nevada. With a topnotch management team and a team of investors second to none in the industry, there is no doubt in my mind this will be the talk of the town in early 2016.
Currently the only lithium producer in North America is Albemarle Corporation. Goldman Sachs has a BUY recommendation on the company and expects it to become the lowest cost producer of lithium, making it the go to for batteries. But LIX just signed an LOI to acquire a 100% interest in the NSP Lithium Claims Group. The property covers 1,544 acres north and adjacent to the Albemarle production facility. There are currently seven publicly acknowledged aquifers on the Albemarle property and LIX hopes to see the same success over on their property.
LIX’s CEO is Brian Paes-Braga, a former Vice President with Jordan Capital Markets, now Mackie Research, and Managing Director of a venture focused investment bank. Along with his partner, Canadian business mogul Frank Giustra, Paes-Braga plans to execute on a business plan that revolves around a combination of technical, financial, and unmatched experience in the resource space. With their combined history of hard work, experience, and knowledge of the resource sector, I have no doubt that LIX will reach great heights. Paes-Braga is a young and savvy investor who is entering the market at a perfect time, taking advantage of the demand for energy storage and vehicle electrification.
Frank Giustra is a mining legend and one of the most successful entrepreneurs in Canadian history. The last time he got into the mining space after a recession was when he started Wheaton River (now Goldcorp) which he helped finance and form the team that built one of the worlds largest Gold producers. When he saw an opportunity in the film industry, he pursued it and created Lionsgate Films, one of the most successful film studios in the world and another $5 billion company. Lionsgate has been responsible for many of the blockbuster movies we’ve all watched 100s of times. When Giustra puts his mind to something and his name behind an enterprise, the market reacts. Judging from his track record, chances are it’ll be a massive success. Paes-Braga and Giustra see a great opportunity in the lithium sector and are putting focus and resources to making LIX a major win for shareholders. If you don’t believe me, Google “Frank Giustra” and check out his track record and resume for yourself.
Another notable name that has joined LIX as Executive Chairman is Paul Matysek. Paul is also a mining legend that as CEO has built and sold many successful mining companies like Energy Metals ($1.8 billion exit), Potash One ($434 million exit) and Lithium One ($112 million exit).
There’s a lot in store for Lithium X, so make sure you keep a close eye on the name. The company will have over $2 million in the bank and will have just over 28 million shares outstanding and a market cap of about $4.2 million. This is a very exciting time to be in the lithium space, which is in its infancy
As always, if you have any questions, please do not hesitate to get in touch with me anytime. I look forward to hearing from you.
Best,
Etienne
