As the Tesla, ForTwo, Nissan Leaf and Chevy Volt launch this year, investors are quickly realizing that, each one of these new vehicles runs on Lithium batteries. Each one uses approximately 8 pounds of lithium, now coming to be known as the "electric metal"!
The Lithium market is heating up as the tide goes out on oil, and 2010 is the year everyone will remember as the real start of the lithium boom. With the advent of the electric vehicle market, China believes lithium will be the oil of the 21st century. They are not alone in that assumption. The worlds largest supplier of lithium, SQM of Chile, has already seen it's stock price sky rocket over the past two years and is, at this writing, looking to expand it's already large holdings in the lithium salars of Chile. There is, however, a growing segment of this market that has a huge upside for savvy investors. The Junior miners.
Our Top five Junior Lithium Miners in order:
1 .Salares Lithium (LIT-TSX) -Conviction stock pick
Owns over 117,000 hectares (288,990 acres in the Atacama region of Chile, encompassing 7 Salars (brine lakes) nearby SQM operations. The project is called Salares 7. 50% of the worlds current lithium production comes from this area of Chile with the largest producer being SQM.
This is one of the best, pure play Lithium ventures anywhere today with a depth of resource now measured at over 300 meters in a region that already produces 50% of the worlds current lithium supply and is nearby the largest lithium producer in the world.
Salares Lithium wholly owns 100% of 5 of those Salars, which is unique in the industry and very important in South American mining. Many others "share" deposits on the same properties (that would be the equivalent of two people placing two separate straws in the same soft drink).
Salares now has a giant Lithium footprint, as large as anyone on the planet (read the article: Size matters ) They also have a very focused management team and institutional investors are in on this play. At this writing Sociedad Quimica y Minera S.A. (NYSE-SQM), the worlds largest producer of lithium carbonate (the main ingredient in any lithium battery) has shown specific interest in the properties of Salares Lithium prompting Salares to upgrade their property to the development stage this month. We think this company is a likely takeover target.
Click here for analyst opinions on Salares Lithium!
(UPDATE--- July 15 2010 - Salares swallowed by Talison of Australia, the #1 supplier of lithium to China)
2. TNR Gold Corp (TNR-TSX)
We think TNR is the "sleeper" in this space and is currently flying under the radar of most investors. TNR Owns 16 gold, copper, Lithium, and REE properties in Nevada, Canada, Argentina and Ireland.
More importantly, TNR "owns 100% of International Lithium Corp"which it will spin off next month in an IPO.
ILC owns 9 Lithium brine properties in Argentina, Nevada, and Canada, while TNR will retain it's gold, copper and rare earth deposits in Canada and Ireland as well as one Lithium play in Argentina. TNR may actually be the best "short term" play in the sector as it prepares the IPO for International Lithium Corp. as owners of TNR stock will automatically own stock and warrants in International Lithium when it is spun out next month. (one share and one warrant for every 4 shares of TNR) Thereby owning "both" companies after the IPO next month.
Institutional Holders of TNR stock include some serious players: Barrick Gold, Pinetree Capital, Tocqueville Fund, Solitario, and NovaGold.
Research notes on TNR gold Corp.
3. Western Lithium USA (WLC-TSX)
WLC owns over 50,000 acres of proven, lithium reserves in Nevada. One of the only pure lithium plays in the USA with proven reserves. This is one of the worlds largest, proven Lithium deposits at 47 million tons, mine ready, located in mining friendly Nevada with quick access to buyers in North America.
On May 31st Western Lithium changed it's name to Western Lithium USA to more reflect it's intention to supply Lithium to that market.WLC should be part of every investors lithium portfolio.
4. Rodina Lithium (RM-TSX) (formerly Rodina Minerals)
Besides it's recent acquisitions of Diablillos, Centenario and Ratones in the Salars of Argentina on the Puna Plateau, RM owns a substantial lithium property in Clayton Valley Nevada Rodinia has 100% mineral rights to 50,440 acres in Nevada’s lithium-rich Clayton Valley in Esmeralda County approx 80 mi. from where Western Lithium is working, and is currently in the process of assessing the size, quality and processing alternatives of its Lithium Brine Project. Early estimates put the valley’s lithium deposits as high as 700 million kg, ranking it second only in size to the deposits found in Chile.
Rodina Lithium-RM is one of the top Lithium picks of Byron Capital Markets analyst, Dr. Jon Hykawy who is, arguably, one of the foremost Lithium experts in the market today! RM is also a favorite of the gold report.(theaureport.com)
5. Latin American Minerals Inc. (LAT-TSX)
Besides gold, copper and silver, LAT owns a 17.4% stake in Lithium Americas Corp. (LAC) which has a big stake in the Salars on the Argentina side. LAT also owns rare earth properties (REE's). Lithium Americas properties include over 100,000 Hectares encompassing 5 salars (salt lakes) on the Argentina side of the Puna Plateau.You can buy LAT now (currently .15 cents) to own 17.4% of Lithium Americas, (which we have done), or you can buy Lithium Americas (LAC) at the IPO price of $1.80
Strategic Investors in Lithium Americas already include:
- Magna International Inc.
- Mitsubishi Corporation
- PineTree Capital corp.
Tidbits:The journal, MIT Technology Review published advancement in lithium air
batteries (also called lithium-metal-air batteries) for large scale applications.
Lithium-metal batteries approach the energy density of fuel cells without the plumbing
needed for these devices; in theory, the maximum energy density is more than 5,000 watt hours
per kilogram, or more than 10 times that of today's lithium-ion batteries. Lithium
metal-air batteries are also very lightweight because it's not necessary to carry a second
Lithium metal is "the holy-grail battery material," says Steven Visco, chief
technical officer and founder of PolyPlus
Energy research company Frost and Sullivan, says the battery market is set to grow massively.
The lithium-ion battery market for electric and hybrid vehicles is, he says, conservatively-estimated to be set to grow from 2,400 units in 2008 to 1.53 million units by 2015. "The world's dependence on oil will decline and will be replaced by other fuels, such as lithium batteries."
President Barack Obama has said he wants a million hybrid electric cars on America's roads by 2015. At a groundbreaking ceremony for a new lithium-ion battery plant on Monday, Vice President Joe Biden said such factories could reduce US dependence on foreign oil and prevent disasters like the Deepwater Horizon oil leak in the Gulf of Mexico.
"This is the beginning of a revolution in the production of energy in the country,"said Biden.
Disclosure: Accumulating Junior lithium stocks summer 2010.