Lithium Oil of the 21st Century - Seite 2
In the case of Chilean-based lithium assets, the smart money still needs to realise that SQM has been forced to share its stage, meaning all Chilean lithium plays should rerate. While predicting which company will grow most is nearly impossible, Lithium Chile's (TSX-V: LITH) (OTCQB: LTMCF) closest neighbor is the largest producing lithium mine in the world, and what's more, the company has no debt and owns its assets outright, as opposed to many of its peers who either partially own their targets or in many cases have a royalty arrangement.
But, Only Quality Will Endure
Market corrections can only help a company's stock price so far. At the end of the day, sustainable long-term growth is only possible if a company has a quality deposit.
In the case of lithium brines, the most important factors to consider are the lithium concentration and presence of magnesium, with high levels of the former and relatively low levels of magnesium (i.e. low Li:Mg ratio) being ideal.
In April, Lithium Chile revealed that it had identified target projects with near surface brine values of 1330 mg/l and 1440 mg/l, on par with Chilean production grades, the highest in the world. Furthermore, the fact that Lithium Chile (TSX.V:LITH.V) (OTCQB:LTMCF) has a relatively low Li:Mg ratio ranging from below 3 to 1, should be taken as extremely promising. For comparative purposes, the largest brine deposit- the Salar Uyuni in Bolivia has an Mg:Li ratio of 18.6 and the Salar de Rincon in Argentina has a ratio of over 8.
In terms of project attributes, Lithium Chile (TSX-V: LITH) (OTCQB:LTMCF) holds the largest lithium exploration properties held by any private company, including the Salar de Atacama, over a whopping 152, 900 hectares. The company's market cap has grown from $30 million to $90 million on rising land values alone in the last 18 months. For those investors who missed the beginning of oil in 1859, here's your second chance.
Other Active Lithium Mining Players
Tesla (NASDAQ: TSLA) - Tesla develops, manufactures and sells electric vehicles and is considered a pioneer in the field of electric vehicle production. The company has recently entered into an offtake agreement with largest Chilean-based producer, SQM to provide lithium for its EV batteries. Analysts have agreed this offtake is insufficient to meet Tesla's long term plans, but assuming the agreement is successful, it would be natural for Tesla to establish similar agreements with other Chile-based mines.