Talison Lithium (TSE-TLH) has been in the business for 25 years. It supplies about 75% of the Chinese import market in lithium from its Greenbushes mining operation in Western Australia, and has 300 customers worldwide. Talison plans a 100% expansion of those resources in 2011, and the recent 110% run-up in its share price reflects these facts.
However it is Talisons resource in Chile which will propel it to the top of the lithium world, and solidify its position as the largest, pure lithium player on the planet.
If you have been reading this blog, then you already know how bullish I have been on Talison since it went public on the TSE in September at $3.30 share (close today at $6.86) What you may not be aware of is that, I acquired our Talison shares by first investing in a Junior, Salares Lithium, which was swallowed by Talison in the summer of 2010. It was the properties owned by Salares that drew my investment dollars, and obviously drew the investment dollars of Talison Lithium as well.
hard rock miner. They did not have brine properties, until they acquired Salares Lithium and its huge Salares 7 project in the Atacama desert of Chile, the heartland of lithium brine production today.
All of Talisons production to date is from its hard rock mines in Australia, but it is their newly acdquired Brine properties that hold the most promise.
The Salares 7 project encompasses 7 Salars or Brine lakes and over 117,000 hectares, on the Puna Plateau, of which 5 are 100% owned by Talison. It was this massive resource that I first invested in, and I speculated at that time that SQM of Chile might make a play for Salares Lithium. Of course I was wrong about that, but not about the value of the resource, as Talison swooped in and swallowed Salares Lithium, thereby acquiring this huge, rich, lithium (and potash) resource.
Brine properties, especially on the Puna Plateau, are the least costly lithium resources in the world, as mother nature does most of your work for you. (This is the driest place on earth, and the sun dries out the brine as it is pumped to the surface, allowing producers to basically scoop up the lithium-potassium mix for processing.
(potassium of course being the raw material for potash which is also also in high demand worldwide)
As the lithium market marches onward and upward, Talison will develop this resource to help supply that booming market (of course after it boosts its hard rock production by 100% this year)
with a 25% market share.
It is eclipsed only by giant, SQM of Chile, which produces lithium as a by product of its massive potash operations there.
Talison Lithium my conviction stock pick in September, predicting a double by Christmas and another double by spring 2011, (I am sticking with that prediction) I did so on the basis of its Greenbushes operation (left) in Western Australia, which feeds China.
When Talison finally taps into the Salares 7 project, and begins to produce lithium carbonate from its brine, I believe the sky is the limit, for this company that is still running under the radar of the big dogs. (In early December, Talison was finally added to the Global X lithium ETF (NYSE-LIT) as no ŒŦª can ignore a market leader, and Talison had been a private company until this September past.
If Talison decides at some point, to branch out from lithium into potash, it will truly be a shooting star, and will make a lot of people a lot of money. I plan on being one of them!
Disclosure: Long TLH
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