American Lithium Corp () believes the domestic market for lithium products is set to be under-supplied for many years to come.
The explorer and developer, which has interests in six Nevada properties deemed prospective for lithium deposits, was in optimistic mood in its half-year results statement about the outlook for the company.
According to broker Dundee Capital Markets in a research note published earlier this month, lithium carbonate (LCE) and lithium hydroxide (LiOH) are both currently in supply deficit, which should create a rising commodity price environment.
With steadily increasing demand from battery manufacturers, on-streaming of lithium production cannot catch up to demand requirements, the broker postulated.
The commodity environment is expected to reflect a 14.4% growth in annual demand for at least two-years, before a balancing of supply and demand starts to happen over the following three-years, according to the broker.
The six months to the end of August saw the company acquire its interests in six Nevada properties: Fish Lake Valley, Atlantis, Fish South, Colorado, San Emidio, and Clayton Valley BFF.
All, save for the last mentioned, are in Fish Lake Valley, in Esmeralda County. The geological setting at Fish Lake Valley is highly analogous to the lithium deposits of Clayton Valley, where Albemarle has its Silver Peak lithium-brine operation – currently the only asset in the USA that is producing lithium.
The company’s plan is to explore its assets and then develop the most promising prospects, with a view to taking advantage of the aforementioned surge in demand for LCE and LiOH.
It will be some time before the company has any meaningful revenues and at present it is still in the cash-burn stage.
The first half of its financial year saw it post a loss of C$3.24mln, equivalent to 10 cents a share.
Cash and cash equivalents stood at C$714,630, compared to C$153,371 at the beginning of the reporting period.