Lithium Miners News For The Month Of February 2022

Stock Market


The Rockwood Lithium Mine

Skyhobo/iStock via Getty Images

Welcome to the February 2022 edition of the lithium miner news. The past month saw lithium prices surge again to record highs making the current lithium price bull run one of the greatest in history. The China spot lithium carbonate price is up ~10x in the past 14 months.

February saw another big month of news with most lithium producers now starting to realize much higher lithium prices. In February, we welcome Sigma Lithium (NASDAQ:SGML) that has been upgraded to the lithium monthly news, now that its Grota do Cirilo Project is fully funded and is on track to be a near-term producer by late 2022.

Lithium spot and contract price news

Asian Metal reported during the past 30 days, 99.5% lithium carbonate CIF China spot prices were up 15.18%. Lithium hydroxide prices were up 18.00% the past 30 days. Lithium Iron Phosphate (Li 3.9% min) prices were up 5.93%. Spodumene (6% min) prices were up 0.22% over the past 30 days.

Benchmark Mineral Intelligence as of mid-February reported China lithium carbonate prices of US$60,600/t (battery grade), and for lithium hydroxide $50,675/t, and stated (no link available):

Benchmark expects rising lithium chemicals prices will continue to drive an increase in spodumene feedstock prices, given that contract mechanisms commonly tie spodumene pricing to chemical pricing on a lagged timeline, further driving bullish market sentiment for chemicals pricing.”

Metal.com reports lithium spodumene concentrate (6%, CIF China) price of CNY 16,775 (~USD 2,651/mt), as of February 14, 2021.

China Lithium carbonate spot price – CNY 426,500/t (~USD 67,424/t)

China Lithium carbonate spot price

Trading Economics

Source: Trading Economics

Lithium demand versus supply outlook

2021 IEA forecast growth in demand for selected minerals from clean energy technologies by scenario, 2040 relative to 2020 – Increases Of Lithium 13x to 42x, Graphite 8x to 25x, Cobalt 6x to 21x, Nickel 7x to 19x, Manganese 3x to 8x, Rare Earths 3x to 7x, and Copper 2x to 3x.

2021 IEA forecast for critical metals

IEA

Source: International Energy Agency 2021 report

UBS’s EV metals demand forecast (from Nov. 2020)

UBS EV metals demand forecast

UBS

Source

Rio Tinto’s lithium emerging supply gap chart (October 2021)

Rio Tinto lithium emerging supply gap chart

Rio Tinto

Source: Mining.com courtesy Rio Tinto

Lithium demand v supply forecast by Benchmark Mineral Intelligence in Q3 2021

Lithium demand vs supply forecast by Benchmark Mineral Intelligence in Q3 2021

BMI

Source: Allkem company presentation courtesy Benchmark Mineral intelligence

If supply can be rapidly ramped in future years, it can come close to meeting surging demand

BMI market balance if supply ramps well

BMI

Source: Savannah Resources mid 2021 presentation courtesy of Benchmark Mineral Intelligence

UBS forecasts Year battery metals go into deficit (chart from 2021)

UBS forecasts Year battery metals go into deficit

UBS

Macquarie’s lithium demand v supply forecast (July 2021) – Deficits from 2022 growing bigger from 2027

Macquarie lithium demand vs supply forecast

Macquarie

Source: Core Lithium presentation courtesy Macquarie

Lithium market and battery news

On January 26, The European Commission reported:

State aid: Commission approves €2.9 billion public support by twelve Member States for a second pan-European research and innovation project along the entire battery value chain… The project will cover the entire battery value chain from extraction of raw materials, design and manufacturing of battery cells and packs, and finally the recycling and disposal in a circular economy, with a strong focus on sustainability. It is expected to contribute to the development of a whole set of new technological breakthroughs, including different cell chemistries and novel production processes, and other innovations in the battery value chain, in addition to what will be achieved thanks to the first battery IPCEI.

On January 27, Yicai Global reported:

China’s Yongxing soars on tie-up with CATL to build EV battery raw materials plant… the Chinese stainless steel rod maker said it is teaming up with electric car battery titan Contemporary Amperex Technology to construct a facility that will produce lithium carbonate… Costing CNY2.5 billion (USD396 million), the factory will have an annual capacity of 50,000 tons and will be operated by a joint venture in which Yongxing Special Materials and CATL will hold a 30 percent and 70 percent stake respectively… The first phase will cost CNY1.5 billion (USD226.3 million) and will have an annual output of 30,000 tons of lithium carbonate once completed. No timetable was given for the construction.

On February 1, Seeking Alpha reported:

Albemarle, Livent upgraded at BofA on anticipated lithium price strength… Albemarle (ALB +1.3%) and Livent (LTHM +0.5%) edge higher after Bank of America upgrades shares to Neutral from Underperform with respective $263 and $30 price targets, expecting that higher lithium prices will lift the companies’ earnings.

On February 1, S&P Global reported:

INTERVIEW: ERG’s Sobotka says metals prices on rising trend until recycling takes off in 15 years. Mainly primary metals to be used for 10-15 years. Recycling to kick in when initial EV wave completes lifespan. Aluminum price could see 30+-year high in 2022… Energy transition is a driving trend “with all the ingredients of a new supercycle,” according to Sobotka. Annual investments in decarbonization of $750 billion-$1 trillion globally are foreseen in coming decades in a bid to keep to Paris Agreement 1.5 degree Centigrade global warming targets. This will boost demand for copper, aluminum, cobalt and other battery metals for renewable energy, transport and construction in “the biggest purchase order in the history of the mining industry: the amounts are just staggering,” he said.

On February 2, Bloomberg reported:

In Chile’s big mining shake-up, radical moves remain a long shot… On Tuesday, the assembly’s environmental committee approved a proposal to nationalize copper and lithium mines. Last week, the same body voted in favor of annulling mineral operations that infringe on indigenous lands… the market reaction was subdued, with some mining stocks paring gains and the peso retreating. That’s because motions presented in the environmental committee — which is stacked with young activists — face a sterner test on the assembly floor, where they require two-thirds majority from a more ideologically diverse group… And even if radical measures do make their way into the draft charter in coming weeks, the document must still win popular support in a referendum in the second half of the year. A rejection of the draft by Chilean voters would end the process and extend the status quo… Another downside in seizing assets from private companies is the hundreds of billions of dollars of compensation. Those payments would imperil efforts to boost social spending and reduce inequalities, goals that sparked the constitutional process in the first place. If Chile opted not to pay, it would find itself in international courts.

On February 2, The San Diego Union-Tribune reported:

Mexico plans state lithium company, questions Chinese mine. Mexico’s president said Wednesday he will create a state-owned company to mine lithium and appeared to suggest he will seek to cancel one of the few existing permits held by a Chinese company… The president also said a private lithium mine in the northern state of Sonora that involves a Chinese company would not be allowed to start production…

On February 3, Bloomberg reported:

Glencore moves into lithium recycling in deal with Britishvolt. Glencore Plc will build a new plant to recycle lithium-ion batteries in the U.K. as part of a deal to help Britishvolt Ltd. shore up its supply chain as it races to develop Britain’s first large-scale electric-vehicle battery plant.

On February 3, Reuters reported:

Electric vehicles drive up nickel, cobalt and lithium prices

  • Nickel stocks in LME warehouses down 65% since last April.
  • Chinese consumers draw down cobalt stocks.
  • Lithium deficits likely for some years.

Lack of investment in capacity due to sliding prices in the three years to 2021 means deficits are likely for some years.

“Supply is struggling to keep up with demand, given long lead times to bring first production from lithium resources to market,” said BMI analyst George Miller… BMI estimates demand for lithium carbonate equivalent at 610,000 tonnes this year, up from 490,000 tonnes last year, and a deficit of 26,000 tonne from a shortfall of 12,000 tonne.

BMI 2022 lithium forecast – Deficits from 2021 to end 2025

BMI 2022 lithium forecast - Deficits from 2021 to end 2025

BMI 2022 lithium forecast – Deficits from 2021 to end 2025 (Reuters courtesy BMI)

On February 4, Bloomberg reported:

Chile committee votes to scrap water rights for mines and farms. Thursday’s vote is a first step, with many hurdles remaining. New charter will be put to national referendum later this year… The plan would require mines, agribusinesses and utilities to seek temporary permits to use water in a new model that prioritizes human consumption, the sustainability of water reserves and indigenous rights.

On February 5, Reuters reported:

China’s Zijin Mining to invest $380 mln in Argentina lithium plant… The plant will be located in the Tres Quebradas project, in the northern province of Catamarca, and will aim to produce 20,000 tons of lithium carbonate per year with the idea of doubling its production in the medium term, the government said. Last year, Zijin purchased Canada’s Neo Lithium Corp, which operates the Tres Quebradas (3Q) project. “For the Tres Quebradas project, the plant is scheduled to start construction this year and to start production by the end of 2023,” the government statement said.

On February 7, The Korea Economic Daily reported:

LG Energy to spend $1.7 bn to hike Michigan battery capacity fivefold. Separately, a fourth US joint plant with GM is in the offing to further narrow gap with market leader CATL.

On February 9, Seeking Alpha reported:

High lithium prices here to stay, Citi says in hiking forecast to $60K/ton. Citigroup analysts raised their forecast for lithium prices to $60K/metric ton for battery-grade carbonate, on the back of higher electric vehicle production and sales expectations that result in tighter short-to-medium term market balances… Citi said it sees limited downside in prices over the coming year “as our higher frequency quarterly balances point to a rebalancing in the market only by H2 2023… Bank of America cited its outlook for higher lithium prices in recently upgrading shares of Albemarle and Livent.

On February 10, Proactive Investors reported: “Ultra Lithium inks tie-up with Chinese giant Zangge to advance Laguna Verde brine asset in Argentina.”

On February 18, Reuters reported:

EXCLUSIVE Pentagon to boost rare earths and lithium stockpiles -sources. The Pentagon plans to boost the stockpile of rare earth minerals, cobalt and lithium it manages for the U.S. government to reduce its long-term dependence on China, two people familiar with the plan said. The new stockpile agreement guidance is expected to be announced as soon as next week, one of the people said, nearly a year after U.S. President Joe Biden issued an executive order to study U.S. supply chain resiliency in February 2021.

Lithium miner news

Albemarle (NYSE:ALB)

On February 9, Albemarle announced:

Albemarle in discussions with Mineral Resources to expand lithium Joint Venture. “The expansion of MARBL would be consistent with our corporate strategy to pursue profitable growth and to be disciplined stewards of capital,” said Kent Masters, Albemarle CEO. “Broadening our partnership with MRL would allow us to expand lithium conversion capacity with increased optionality and reduced risk to help meet our global customers’ growing need for high-quality, reliable lithium supply.”

On February 16, Albemarle announced: “Albemarle Corporation finishes 2021 strong; raises 2022 outlook.” Highlights include:

  • Net sales of $894 million, an increase of 2%.
  • Net loss of ($3.8) million, or ($0.03) per diluted share; Adjusted diluted EPS of $1.01.
  • Adjusted EBITDA of $229 million, an increase of 3%.
  • Improved full-year 2022 outlook based on anticipated ability to capitalize on favorable market conditions for lithium and bromine; adjusted EBITDA expected to be 35%-55% higher Y/Y excluding FCS.
  • La Negra III/IV conversion plant is in commercial qualification.
  • Kemerton I conversion plant is mechanically complete and in the commissioning phase; construction team now dedicated to Kemerton II.
  • Signed non-binding letter agreement to explore expanding the MARBL JV to increase optionality and reduce risk.

Upcoming catalysts:

Early 2022 – 50ktpa Kemerton Lithium Hydroxide Plant converter in WA due for completion (60:40 joint venture between Albemarle and Mineral Resources Limited).

Q3 2022 – Wodgina Lithium Mine (60% ALB: 40% MIN) plans to restart. Note, the recent non-binding agreement will (if completed) move Wodgina to a 50% ALB: 50% MIN JV.

Sociedad Quimica y Minera S.A. (NYSE:SQM), Wesfarmers [ASX:WES] (OTCPK:WFAFY), Covalent Lithium (SQM/WES JV)

On January 31, SQM announced: “SQM joins race to zero and announces start of low carbon logistics evaluation project.”

On February 7, SQM announced: “SQM recognized among Leading Global Companies in S&P’s Sustainability Yearbook 2022.”

Upcoming catalysts:

H2 2024 – Mt Holland production to begin (SQM/Wesfarmers JV) as well as their lithium hydroxide [LiOH] refinery.

Investors can read SQM’s latest presentation here or my quite recent Trend Investing article on SQM here.

Ganfeng Lithium [SHE:002460] [HK: 1772] (OTC:GNENF) (OTCPK:GNENY)

No significant news for the month.

Investors can read my recent Trend Investing article on Ganfeng Lithium here.

(Chengdu) Tianqi Lithium Industries Inc. [SHE:002466]

No significant news for the month.

Livent Corp. (LTHM)[GR:8LV]

On January 27, Livent Corp. announced: “Livent receives EcoVadis 2021 Gold Rating for sustainability.”

On February 15, Livent Corp. announced: “Livent begins third-party IRMA Assessment in Argentina, welcomes opportunity to strengthen sustainability program.”

On February 17, Livent Corp. announced:

Livent releases fourth quarter 2021 results. Revenue was $122.9 million, up 19% from the third quarter of 2021 and 50% higher compared to the prior year. Reported GAAP net income was $7.5 million, or 4 cents per diluted share. Adjusted EBITDA was $27.5 million and adjusted earnings per share were 8 cents per diluted share. Continued improvement in market conditions and record customer demand in the fourth quarter supported increased prices, which more than offset the impact of higher costs from inflationary pressures and continued global supply chain disruptions. For the full year, Livent reported revenue of $420.4 million, a 46% improvement versus the prior year. GAAP net income was $0.6 million, or 0 cents per diluted share. Full year Adjusted EBITDA was $69.5 million, and adjusted earnings per share were 18 cents per diluted share. “Lithium demand growth was strong throughout 2021 and has continued to grow in 2022,” said Paul Graves, president and chief executive officer of Livent. “Published lithium prices in all forms rose to record setting levels in January, and we continue to realize significantly higher prices across our entire portfolio.”

Allkem [ASX:AKE] [TSX:AKE] (OTCPK:OROCF) (formerly Orocobre)

No significant news for the month.

Upcoming catalysts include:

  • Q1 2022 – Naraha lithium hydroxide plant (10ktpa) commissioning (ORE share is 75%).
  • H2 2022 – Olaroz Stage 2 commissioning followed by a 2-year ramp to 25ktpa. When combined with Stage 1, total capacity will be 42.5ktpa.

You can read the latest investor presentation here. You can read my recent Allkem article here.

Pilbara Minerals [ASX:PLS] (OTC:PILBF)

On January 31, Pilbara Minerals announced: “December 2021 quarterly activities report.” Highlights include:

Production and sales

  • Production of 83,476 dry metric tonnes (dmt) of spodumene concentrate-(September Quarter: 85,759 dmt).
  • Spodumene concentrate shipments of 78,679dmt (September Quarter: 91,549 dmt).
  • Average prices received in the December Quarter were in the range of approximately US$1,750/dmt to US$1,800/dmt (calculated on a CIF China SC 6.0 basis), at the top end of prior guidance (being USD$1,650-$1,800/dmt CIF China SC6.0 basis).
  • Production was slightly lower than the revised guidance of 85-95kt due to reduced mine movements, delays with commissioning of plant improvement works, plant ramp-up initiatives and extended plant shutdowns (both planned and un-planned) and exacerbated by the impact of current industry-wide labour shortages (refer ASX Release dated 21 December 2021).”

Lithium market

  • Further strengthening in lithium market conditions experienced during the Quarter, with strong demand and constrained supply leading to record product pricing, which has continued to trend materially higher since late last year…
  • Price review discussions completed during the Quarter with existing offtake customers to better align pricing with prevailing market conditions, resulting in a significant upward revision in spodumene concentrate pricing received.
  • Indicative pricing for the March 2022 Quarter under existing offtake contracts expected to be in the range of US$2,600-3,000/dmt CIF China (SC6.0 basis).

Project developments

  • Staged restart of production from the Ngungaju Plant continued… Total annualised spodumene production capacity from Ngungaju of ~180-200,000 dry metric tonnes (dmt) expected from the September Quarter following completion of the commissioning and ramp-up phase…
  • Scoping Study for the Mid-Stream Product Demonstration Plant in collaboration with Calix Limited nearing completion, with technical and engineering work now substantially complete.
  • Power Purchase Agreement signed with Contract Power to construct and operate a 6MW PV solar array…

Pilgangoora Ore Reserve Upgrade

  • Material increase in the Pilgangoora Ore Reserve to 162mt, an increase of 47% from the 2020 Pilgangoora Ore Reserve (refer to ASX release dated 6 October 2021).

Corporate

  • Record operating cash flow of $115.5M delivers Quarter-end cash balance of $245M, inclusive of $53.8M of irrevocable bank letters of credit for shipments completed up to 31 December 2021 (September Quarter: $137.3M).
  • Formal DSJV agreements executed with POSCO to jointly develop a 43ktpa LHM chemical conversion facility in South Korea (refer ASX release dated 26 October 2021).
  • Agreements executed with existing senior secured financiers to expand both the existing Syndicated Finance and Working Capital facilities…”

Mineral Resources [ASX:MIN] (MALRF) (OTCPK:MALRY)

Mt Marion Mine (50% MIN: 50% Ganfeng). Wodgina Lithium Mine (60% ALB: 40% MIN) plans to restart during Q3 2022. (Note, the recent non-binding agreement will (if completes) move Wodgina to a 50% ALB: 50% MIN JV). The 50ktpa Kemerton Lithium Hydroxide refinery (60% ALB: 40% MIN) is due for first sales in H2 2022.

On January 25, Mineral Resources announced: “Quarterly exploration and mining activities report October to December 2021 [Q2 FY22].” Highlights include:

  • …Mt Marion produced 98k dmt of spodumene during the quarter, 3% lower qoq and 24% lower pcp. Shipments during the quarter were 92% higher qoq, reflecting the previous quarter’s shipment being delayed to the second quarter of FY22. Mt Marion remains on target to meet FY22 guidance of 450-475 ktpa.
  • The average realised spodumene price for the quarter was US$1,153 per dmt, 56% higher qoq.
  • Construction of the 50ktpa Kemerton Lithium Hydroxide Plant is continuing. Mechanical completion of Train 1 was achieved in November. Spodumene ore has now been introduced into the plant as part of the commissioning process. Commercial production is expected in mid-2022.
  • The restart of the Wodgina Lithium Mine is underway with first spodumene production expected during Q1 FY23. Refer to the ASX Announcement on 25 October 2021.”

On February 9, Mineral Resources announced:

Mt Marion lithium offtake arrangements. Mineral Resources Limited is pleased to announce that it has taken possession and control of its 51% share of the Mt Marion spodumene offtake, from 1st February 2022. The Company has entered into a toll treatment agreement for its share of Mt Marion spodumene to be converted into lithium hydroxide by Ganfeng Lithium Co (Ganfeng) in China. The term of the agreement is seven months, with an option to extend. MRL anticipates first lithium hydroxide sales in May 2022. Earnings are not expected to be material for the current financial year. In addition, the Company has advised Ganfeng that it is undertaking studies with a view to growing spodumene production at Mt Marion through process optimisation and contact ore treatment. Each of these studies is targeting an increase in annual spodumene production of 10% to 15%.

On February 9, Mineral Resources announced: “MARBL Lithium Joint Venture with Albemarle.” Highlights include:

  • Ownership of the Wodgina mine would change from 60/40 [ALB/MRL] to 50/50.
  • MRL would resume management of the Wodgina mine.
  • Ownership of Kemerton I/II would remain 60/40 [ALB/MRL].
  • Kemerton would be fed by the Greenbushes mine.
  • In addition, a new 50/50 Joint Venture to own additional lithium conversion assets outside of Australia to be jointly funded by MRL and Albemarle. Albemarle would be the operator of these assets.
  • Albemarle would remain the exclusive marketer of lithium products produced by both Joint Ventures.”

On February 9, Mineral Resources announced: “Half year results announcement.” Highlights include:

  • Continuing to keep our operations COVID free.
  • Maintaining a low 12-month rolling Lost Time Injury Frequency Rate [LTIFR] of 0.10 and reducing our Total Reportable Injury Frequency Rate [TRIFR] to 2.25.
  • Increasing Mining Services production volumes by 18% on pcp.
  • Exporting 9.9 million wet metric tonnes [WMT] of iron ore.
  • Exporting 207 thousand dry metric tonnes (dmt) of spodumene.
  • Delivering a ROIC of 23.9% even in difficult conditions.”

Investors can read my quite recent Trend Investing article on Mineral Resources here.

AMG Advanced Metallurgical Group NV [NA:AMG] [GR:ADG] (OTCPK:AMVMF)

On February 1, AMG Advanced Metallurgical Group NV announced:

AMG Advanced Metallurgical Group N.V. increases EBITDA guidance for 2022. AMG Advanced Metallurgical Group N.V. is pleased to increase its EBITDA guidance for 2022. In December 2021 AMG increased its EBITDA guidance for the full year 2022 to a range of between $175 million and $200 million. Since then, lithium market conditions have significantly improved. As a result, AMG is increasing its EBITDA guidance for 2022 to $225 million or higher.

You can view the latest company presentation here.

Upcoming catalysts:

2022 – Progress on lithium projects in Zeitz, Germany and in Zanesville, Ohio, both in the planning stage.

Q2 2023 – Stage 2 production at Mibra Lithium-Tantalum mine (additional 40ktpa) planned.

Q3 2023 – Lithium hydroxide facility in Bitterfeld-Wolfen Germany with production set to begin.

Lithium Americas [TSX:LAC] (LAC)

On January 25, Lithium Americas announced:

Lithium Americas completes acquisition of Millennial Lithium.

Upcoming catalysts:

  • H1 2022 – Thacker Pass FS and early construction work planned to commence.
  • Mid 2022 – Cauchari-Olaroz lithium production to commence and ramp to 40ktpa. From 2025, a Stage 2 20ktpa+ expansion is planned.
  • 2023 – Possible lithium clay producer from Thacker Pass Nevada (full ramp by 2026).

NB: Ganfeng Lithium (51%) and Lithium Americas (49%) own the JV company Minera Exar S.A., which owns 91.5% interest and is entitled to 100% of the production from the Cauchari-Olaroz Project. The 8.5% interest is owned by Jujuy Energia y Mineria Sociedad del Estado (“JEMSE”) (a company owned by the Government of Jujuy province).

Argosy Minerals [ASX:AGY][GR:AM1] (OTCPK:ARYMF)

Argosy has an interest in the Rincon Lithium Project in Argentina, targeting a fast-track development strategy. Argosy is now producing at a small scale and ramping to 2,000tpa lithium carbonate starting June 2022.

On January 31, Argosy Minerals announced: “Quarterly activities report – December 2021.” Highlights include:

  • Rincon 2,000tpa Li2CO3 operation development – 53% of total construction works complete & first production of battery quality Li2CO3 product targeted from mid-2022
  • Rincon 2,000tpa Li2CO3 operation plant/equipment procurement and delivery in progress
  • Environmental Impact Assessment approval process in progress – to develop an additional 10,000tpa Li2CO3 operation, supplementing the 2,000tpa operation currently in construction
  • Well advanced in progressing strategic investment for next stage 10,000tpa capex funding solution – with associated 2,000tpa and 10,000tpa off-take arrangements.
  • Resource expansion drilling works regulatory approval expected shortly – to delineate potential for materially expanding current JORC Indicated Resource and increase project mine life & future production capacity
  • Renewable solar energy to power Rincon’s clean lithium technology with low energy use & raw water consumption for a low emissions / low carbon footprint operation.
  • Commenced preparing exploration plans to test lithium brine targets at Tonopah Lithium Project in Nevada, USA
  • Lithium carbonate prices increased 432% during 2021 and have already soared 56% in 2022 – very positive lithium market sentiment supporting Argosy’s multi-project development and production strategy.”

Key Objectives for March 2022 Quarter

  • Continue construction works for the 2,000tpa high purity battery quality Li2CO3 processing plant and associated operations.
  • Formalise strategic investment documents for Li2CO3 product off-take and 10,000tpa expansion capex funding solution.
  • Progress resource expansion and feasibility works at Rincon, and exploration planning works at Tonopah Lithium Project.
  • Our foremost priority is the health, safety and wellbeing of our staff, partners and community during the Covid‐19 pandemic.

On February 1, Argosy Minerals announced: “Rincon 2,000tpa Li2CO3 operational update.” Highlights include:

  • 56% of total construction works now complete – first production of battery quality Li2CO3 product targeted from mid-2022.
  • 2,000tpa lithium carbonate process plant development works progressing on schedule and budget.

On February 10, Argosy Minerals announced: “Approval granted for resource expansion & production well drilling at Rincon.” Highlights include:

  • Environmental Impact Assessment regulatory approval received for resource expansion and production well drilling works at Rincon Lithium Project.
  • Resource expansion drilling works to delineate potential for materially expanding current JORC Indicated Resource and increase project mine life & future production capacity.
  • Independently prepared JORC [2012] Exploration Target1 estimate of 262,000 tonnes to 479,000 tonnes of contained Li2CO3, between depth interval of 102.5m to 300m below ground level.
  • Combined JORC Indicated Mineral Resource and Exploration Target1 estimates outline potential for a range of 507,000 tonnes to 724,000 tonnes of contained Li2CO3 at the Rincon Lithium Project to a depth of 300m.
  • Production well drilling works to facilitate preparation of a Mineral Reserve Estimate and Feasibility Study.

Investors can view the company’s latest investor presentation here, and my recent Argosy Minerals article here.

Core Lithium Ltd. [ASX:CXO] [GR:7CX] (OTC:CORX) (OTCPK:CXOXF)

Core 100% own the Finniss Lithium Project (Grants Resource) in Northern Territory Australia. Significantly, they already have an off-take partner with China’s Yahua (large market cap, large lithium producer) that has signed a supply deal with Tesla (TSLA). The Company states they have a “high potential for additional resources from 500km2 covering 100s of pegmatites.” Fully funded and starting mining with a planned Q4 2022 production start.

On January 27, Core Lithium Ltd. announced: “Quarterly activities and cash flow report 31 December 2021.” Highlights include:

  • Reached a landmark milestone having commenced construction at the Finniss Project.
  • Advanced its offtake agreement with Ganfeng to ‘unconditional’ status.
  • Executed the acquisition of six highly prospective mining leases located adjacent to the Finniss Project; and
  • Further progressed exploration initiatives at Finniss.

On February 18, Core Lithium Ltd. announced: “Broad high grade lithium intersections extend BP33.” Highlights include:

  • Broad and high-grade lithium intersections continue to be delivered at the Finniss Lithium Project near Darwin in the NT.
  • Two recent deep diamond drill holes at BP33 have produced high grade spodumene-rich intersections including: 57.35m @ 1.83% Li2O in NMRD016. 51.0m @ 1.63% Li2O in FRCD023.
  • Intersections outside of the current Mineral Resource at BP33 expected to deliver substantial extensions.
  • Further drilling planned at BP33 for the coming field season.
  • Expanded exploration and resource drilling to recommence and ramp-up in early Q2 2022 across the Finniss Project.

Investors can read a company presentation here, or my past Trend Investing article when Core Lithium was back at A$0.055 here.

Catalysts include:

  • Q4 2022 – Lithium spodumene production at Finniss targeted to begin.

Sigma Lithium Resources [TSXV:SGML](SGMLF) (SGML)

Sigma is developing a world-class lithium hard rock deposit with exceptional mineralogy at its Grota do Cirilo Project in Brazil.

No news for the month.

Catalysts include:

  • Q4 2022 – Production targeted to begin at the Grota do Cirilo Project in Brazil and ramp to 220,000tpa spodumene.

Investors can read the latest company presentation here or my Trend Investing article Sigma Lithium Looks To Be A Potential 2022 Lithium Producer With Significant Next Stage Expansion Potential back when Sigma was trading at C$5.00.

Construction has begun at Sigma’s Grota do Cirilo Project in Brazil

Construction has begun at Sigma

Sigma Lithium

Source: Company presentation

Lithium miner ETFs

  • Global X Lithium & Battery Tech ETF (NYSEARCA:LIT) – Price = US$74.61.

The LIT fund was lower in February. The current PE is 26.38. My model forecast is for lithium demand to increase 4.3 fold between end 2020 and end 2025 to ~1.5m tpa, and 10.4x this decade to reach ~3.5m tpa by end 2030 (assumes electric car market share of 32% by end 2025 and 80% by end 2030).

Note: A Nov. 2020 UBS forecast is for “lithium demand to lift 11-fold from ~400kt in 2021 through to 2030.”

It is interesting to note that the past 2 months has seen macro events pull down the lithium miners, at the same time lithium prices have surged higher and the LIT fund PE has fallen dramatically. Sounds like a possible buying opportunity is opening up.

LIT Fund 10-year price history

LIT Fund 10 year price history

Seeking Alpha

Source: Seeking Alpha

Conclusion

February saw lithium prices surge higher to a stunning new record high (China spot lithium carbonate up ~10x in 14 months, now at US$67,424/t), making the current lithium price boom one of the greatest in history. Meanwhile, the past two months lithium stocks have been falling due to global markets retreating and negative sentiment with the Russia-Ukraine situation. This has led to a widening disconnect and much lower PE ratios across the sector. Investors should pay attention to this opportunity.

Highlights for the month were:

  • European Commission approves €2.9 billion for battery innovation and supply chain materials to develop innovative technologies.
  • China’s Yongxing soars on tie-up with CATL to build EV battery raw materials plant.
  • ERG’s Sobotka says metals prices on rising trend until recycling takes off in 15 years. Energy transition is a driving trend “with all the ingredients of a new supercycle”.
  • In Chile’s big mining shake-up, radical moves remain a long shot.
  • Mexico plans state lithium company, questions Chinese mine.
  • Glencore moves into lithium recycling in deal with Britishvolt.
  • LG Energy to spend $1.7 bn to hike Michigan battery capacity fivefold.
  • High lithium prices here to stay, Citi says in hiking forecast to $60K/ton.
  • The Pentagon plans to boost the stockpile of rare earth minerals, cobalt and lithium it manages for the U.S. government to reduce its long-term dependence on China.
  • Albemarle in discussions with Mineral Resources to expand lithium Joint Venture (details in the Mineral Resources section).
  • Pilbara Minerals Indicative pricing for the March quarter 2022 under existing offtake contracts expected to be US$2,600-3,000/dmt CIF China (SC6.0 basis). Pilgangoora Ore Reserve to 162mt.
  • Mineral Resources expects Kemerton LiOH Plant commercial production by mid-2022. MRL:ALB agreement – Ownership of the Wodgina mine would change from 60/40 [ALB/MRL] to 50/50. Ownership of Kemerton I/II would remain 60/40 [ALB/MRL]. Kemerton would be fed by the Greenbushes mine. Plus a new 50/50 JV to own additional lithium conversion assets.
  • AMG increases its EBITDA guidance for 2022 to $225 million or higher.
  • Lithium Americas completes acquisition of Millennial Lithium.
  • Argosy’s Rincon Project at 56% of total construction works complete & first production of battery quality Li2CO3 product targeted from mid-2022.
  • Core Lithium has executed the acquisition of six highly prospective mining leases located adjacent to the Finniss Project. Strong drill results continue.

As usual, all comments are welcome.



Source link

Leave a Reply

Your email address will not be published.