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Point Roberts, WA, USA
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I have no knowledge of these stocks and no affliation with the newsletter.
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One that’s a recent addition to Gold Newsletter’s portfolio is Piedmont Lithium (PLL.AX; PLL.Nasdaq), a company focused on hard rock lithium production in Albemarle’s home state of North Carolina.
Piedmont’s eponymously named lithium project is located relatively near EV auto factories, including BMW’s operations in South Carolina. That gives the company a ready-made market of potential buyers for its lithium resource. Drilling is underway to expand that resource at this very moment.
The lithium hydroxide product from this hard-rock resource should be of interest to auto companies, who are increasingly showing a preference for the nickel-intensive batteries that use lithium extracted from lithium hydroxide.
The project’s location in a safe jurisdiction near significant infrastructure makes it stand out among its junior brethren.
Add in the possibility that Albemarle might eventually take an interest, and you have a story with the ability to deliver substantial leverage on rising lithium prices.
The other lithium pick in the Gold Newsletter portfolio is Bearing Lithium (BRZ.V; BLILF.OB).
Bearing owns an 18% interest in the Maricunga lithium project in Chile. Maricunga is one of two lithium brine projects in Chile at the feasibility stage.
The recent feasibility study that Bearing and its JV partners put out on the project showed compelling economics. Maricunga has a post-tax NPV, discounted at 8%, of $908 million and a post-tax IRR of 21.0%.
The study projects 20,000 tonnes per year of LCE production at a cash cost of $3,772/tonne LCE over a 23-year mine life. The project has a 4.2-year payback that includes a two-year ramp up.
The partners submitted an environmental impact statement to the Chilean Environmental Review agency in September 2018. Project infrastructure, including access to power and water, has been secured through long-term contracts.
Bearing’s share in Maricunga puts it way ahead of its peers in the lithium space. A recent analysis of lithium projects by Roskill puts Maricunga’s estimated total production costs in 2027 in the lowest quartile of potential lithium producers.
With a market cap around C$15 million, Bearing is trading at a fraction of the value implied by its interest in Maricunga. Its share of one of the rare lithium projects (not held by a major) with a clear path to production make the company a “must-own” for those looking to play the lithium trend.
Source: Gold Newsletter
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