Lithium Buyouts On The Way
Lots of news lately in the lithium space these days. A lot has to do with of course batteries and especially batteries for electric cars and right now there is very limited supply of lithium out there. Yes there is exploration projects going on all over the world but for actual supply right now there is a huge deficit. Lots of the supply issues are caused by things like the pandemic but because lithium is a fairly new in demand commodity, there hasn't been a whole lot of exploration going on until the last decade or so.
The lithium supply is held by a handful of big miners like Lithium Americas TSX-LAC and Orocobre TSX-ORL along with Standard Lithium TSX-SLI and few others. The rest of lithium companies are mostly in the junior sector who are active in exploration and bringing new properties onstream. There are some Chinese companies also that are scattered all over the globe and last week it was one of these Chinese companies that did an all cash buy out. Zijin of China bought out all of Neo Lithium TSX-V:NLC shares in an all cash buyout of $6.50 a share. That price was a 35% premium on the stock price pushing Neo Lithium stock to an all time high.
Neo Lithium's 3Q brine property in Catamarca Argentina, is one of the largest and highest-grade projects of its kind in the world. The company had been working on this project since 2015. Neo Lithium quickly became a prominent name in lithium brine development with the 3Q project. Neo Lithium had a 100% ownership in this project located in the largest lithium-producing area in Argentina, covering approximately 35,000 hectares, including a salar complex of approximately 16,000 hectares. Latin America's Lithium Triangle.
Of course this buyout has raised a lot of interest in the lithium market. Not only the bigger miners will be watching which juniors have the most potential, but end users of lithium such as Tesla and many other battery makers. I did an article around the beginning of the year talking about investing in the lithium triangle in South America where I talked about some of the juniors with potential. Neo Lithium was of course one of those juniors. Other juniors at the time were Alpha Lithium TSX-V:ALLI and Lithium Chile TSX-V:LITH. Lithium Chile has 71,900 hectares covering sections of 10 salars and two laguna complexes in Chile. Alpha Lithium holds a 100% ownership of +27,500 hectares (67,954 acres) of the Tolillar Salar. Alpha is working towards a 43-101 resource.
American Lithium TSX-V:LI owns the TLC claystones lithium deposit, which is in close proximity to the Tesla giga-factory in Nevada. After buying out Plateau Energy Metals, the company is advancing the Falchani hard rock lithium deposit, as well as a uranium deposits known as Macusani which are both located in southeastern Peru.
Cypress Development TSX-V:CYP is developing its 100% owned Clayton Valley Lithium Project in Nevada, USA. Work completed by Cypress led to the discovery of a world class resource of lithium claystone right adjacent to the Albemarle Silver Peak mine, North America's only lithium brine operation.
Frontier Lithium TSX-V:FL is focused on the development of its 100% owned PAK Lithium Project in Ontario. The company is aiming to produce battery grade lithium hydroxide and other chemicals to the growing electric vehicle and energy storage markets.
The one great issue of lithium juniors is when it comes time to investing in any of them, is the fact that there are not a lot of them out there like gold mining stocks where every man and his dog has a junior gold company. A person can sift through the information fairly quick in order to make any kind of investment decision on what plays you think have the best potential, OR, which lithium junior will be the next buy out target.
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