Tuesday, April 28, 2009

Lithium Everywhere - Spinoff Plans + Adding Shareholder value!? TNR.V, CLQ.V, WLC.V, MCI.v, CZX.V

It's a nice feeling being right sometimes.

As expected, Western Lithium was unable to finance at a fairly high price of $0.70/share. They have since adjusted back down to $0.50 and is aiming for an ambitious $5 million cash (ie. 10 million shares). They do have a well known management team - I'd keep watch on that group, estimate price should easily be $1+ if summer is set for a slight recovery in markets.

Mountain Capital - has historical brine resource in stable Alberta but seemed heavily promotional - I tend to be more skeptical of those. If you're lucky get in early and get out when it runs - these likely won't be the groups with multimillion buyouts from majors, but you could still get 40-50% gain... in a good market. It is currently trading at $0.075, down from its $0.15 a mere week ago, I suspect it may drop closer to $0.06.

I couldn't find much on the management team's past successes (and failures) so I'll leave it for investor's own due dilligence. Word of cautions - seems like Cloudbreak Resources is run by the same group - it's struggling a bit at the moment - make your own judgement about if that's an indication re: MCI... some of the investor comments on SH are pretty vicious, take both sides (buy/sell) with a grain of salt.

Canada Lithium seems to be speeding aheah with their Feasibility scheduled for 2009 - I'm anxious to see how they fare in lithium carbonate production from their Quebec mine. Their tout has been updated to 20,000 tonnes production - no time frame given. Trading ranges around $0.13-0.17 - easy potential run to $0.25, CEO Judy Baker has signed some credible group of experts onto the board.

Finally, TNR Gold Corp - remember we recommended a buy here along with CLQ a few weeks back?

Turns out they acquired a property next to the only lithium brine producer curently in North America.

The project is in Nevada : perfect for brine processing.

For everyone who's confused - lithium is usually mined as a byproduct. Brines however, is essentially dissolved lithium - meaning a simple process of evaporation is generally all that you need to extract the lithium. No messy underground mines, dangerous mine shafts, transporting huge rock wastes!

So why doesn't everyone just find brines then?

Well, it's also not that easy. The world's biggest brine resource is well, in Bolivia. And Bolivia hasn't been very cooperative lately about foreign investment going in and taking their resources - you get the idea?

That means as the world need more and more compact cell phones, lithium-battery-powered Hybrid Cars, glass products, etc, lithium demand is starting to overtake the large amount of lithium supplies... it makes sense! For such a versatile rare metal that's so infused in our daily lives, surely the prices should be going up now that even President Obama's touting energy conservation?

Don't worry, it is!

TNR Gold and Rodinia both respectively announced property in the area and has seen at least 70-100% gain in their starting share price. Why I like these two is because they are still diversified if you take away the lithium. Rodinia stands on its own Uranium property, while TNR has the mammoth Los Azules copper project (11.2 billion lb - $0.85/lb production cost that's awaiting feasibility report) and a controversial David-Goliath fighting with Xstrata over this back-in. Not to mention joint ventures with likes of Suramina (Lundin), La Mancha Resources, & NovaGold.

It's very rare seeing a junior with such low market cap that's able to strike deal with so many company. Last I checked they also have a deal with Barrick and BHP Billiton in Alaska..!! Check their page for more details. Not being a one-trick pony is huge - not to mention their management must have massive connections to swing so many deals!!

Since our last coverage of TNR / Rodinia area - this lithium Nevada thing has taken off.

Rodinia announced the property acquisition and action plan on it April 1st, 2009.

Rodinia closes Clayton Valley lithium property deal

2009-04-01 15:56 ET - News Release

Mr. Donald Morrison reports


Rodinia Minerals Inc. and its Wyoming subsidiary, Donnybrook Platinum Resources Inc., have closed the transaction with GeoXplor Corp. in respect of 250 unpatented mining claims located in the Clayton Valley, Esmeralda county, Nevada.

Clayton Valley is home to the only lithium producer in the United States. This plant extracts lithium from brines pumped from aquifiers below the valley and has been in production since 1967. The plant is designed to produce 1.2 million kilograms of lithium per year and to date has produced an estimated 50 million kilograms of lithium. Rodinia Minerals' property is adjacent to this production facility.

After receiving TSX Venture Exchange acceptance, the company has issued the first tranche of shares due to GeoXplor as part of the agreement, being 500,000 common shares, which are subject to a four-month hold period expiring on July 24, 2009. The agreement with GeoXplor gives Rodinia Minerals and Donnybrook the option to acquire a 100-per-cent interest in the property, subject to a 3-per-cent royalty in respect of lithium carbonate production and all other ores or minerals mined or extracted from the property. The option is exercisable by paying GeoXplor a total $322,000 (U.S.) over four years of which $25,000 (U.S.) has been paid to date; issuing to GeoXplor a total of 2.5 million shares of Rodinia Minerals, as to 500,000 shares on regulatory approval (issued) and 500,000 shares each year thereafter for four years, and incurring expenditures on exploration of the property of not less than a total of $2-million (U.S.) over four years. Rodinia Minerals may, at any time, accelerate any of the cash payments, share issuances or expenditures and can satisfy the expenditures requirement by delivering a prefeasibility study. The royalty can be bought down at any time upon payment of $1-million (U.S.) for each 1 per cent of the royalty. The agreement also provides that if, at any time, a positive feasibility study in respect of the property is delivered, or Rodinia Minerals and Donnybrook dispose of their interest in the property in any way, GeoXplor will be paid $2-million (U.S.) in cash, or, at the election of GeoXplor, in that number of shares of Rodinia Minerals as have a total value of $2-million (U.S.) determined on the basis of the closing market price per share of Rodinia Minerals' shares on the day preceding GeoXplor's election.

RM jumped almost 300% to $0.40 at one point on this spectacular acquisition. This next one though - we saw coming... even as we speak today there was another acquisition by this aggressive group.

TNR Gold stakes Fish Lake Valley in Nevada

2009-04-16 18:33 ET - News Release

Mr. Gary Schellenberg reports


Following TNR Gold Corp.'s philosophy of generating quality projects and its recent entry into lithium and rare metals, the company is acquiring, by staking, the 640-acre Fish Lake Valley property in Nevada.

TNR Gold believes Fish Lake Valley has geological features similar to those which have acted as a trap for lithium brines in Clayton Valley. Chemetall-Foote Corp.'s Silver Peak operation, located in Clayton Valley 34 kilometres east of the property, is the only lithium brine producer in North America and has been in production since 1966.

United States Geological Survey sampling at Fish Lake Valley in 1976 found lithium brines on surface. One of these samples, located on TNR Gold property, contained 200 parts per million lithium. This falls within the range of concentrations reported to be used for production ponds at Chemetall-Foote's plant in Clayton Valley. To date, Chemetall-Foote's Silver Peak operation is estimated to have produced 234,000 tonnes of lithium carbonate at a rate of approximately 5,700 tonnes per year.

The presence of lithium-bearing surface brines shows that modern Fish Lake Valley has geological and climatic conditions where lithium brine can form. At Clayton Valley drilling conducted by the United States Geological Survey and Chemetall-Foote has shown that as climatic conditions went through cycles, successive layers of lithium-bearing evaporite were deposited.

During 1979, the United States Geological Survey conducted drilling operations in Fish Lake Valley as part of a lithium study. One of those holes, located on TNR Gold property, returned 21 parts per million lithium in water at 16.8 metres depth. This level of lithium in water is anomalous and similar to those found in Clayton Valley in proximity to subsurface brines.

John Harrop is the company's qualified person on the project as required under National Instrument 43-101, and he has reviewed the technical information contained in this press release.

TNR jumped 200% since our last feature blog for various TSX lithium juniors. I'll cover their most interesting press release from this week tomorrow.

TNR arranges spin-out of lithium, rare metals projects

2009-04-27 10:17 ET - News Release

Mr. Gary Schellenberg reports


TNR Gold Corp. intends to spin out its lithium and rare metals projects into a newly incorporated, wholly owned British Columbia subsidiary of TNR Gold, International Lithium Corp. Upon completion of the transfer of the lithium and rare metals projects to International Lithium, TNR intends to distribute up to 75 per cent of the securities of International Lithium to TNR shareholders. Application will also be made to list the shares of International Lithium on the TSX Venture Exchange.

It is anticipated that the spin-out transaction will be completed pursuant to a plan of arrangement and will be subject to exchange, regulatory, court and shareholder approval, by not less than two-thirds of the votes cast at a special meeting of TNR shareholders which will be called to approve the spin-out transaction. Full details of the proposed spin-out transaction will be included in the information circulate to be sent to TNR shareholders in connection with the special meeting to be held in summer 2009, but it is anticipated that TNR shareholders of record will be entitled to receive one share and one full tradable warrant of International Lithium for every four shares of TNR held as of the as-yet-determined record date. The warrant will be exercisable at a price equal to a 50-per-cent premium to the company's listing price for a two-year period. In conjunction with the listing of the shares of International Lithium, TNR intends to complete an equity financing on terms to be determined, subject to regulatory approval.

Further details regarding the spin-out transaction, the proposed timing thereof and any proposed financing, will be released in the upcoming months.

TNR believes this corporate holding structure will deliver further shareholder value as International Lithium will be focused on increasing critical mass through acquisitions of high-potential lithium and rare metal projects globally. Current shareholders will continue to benefit from the group's ability to identify and add value to early stage projects for joint venture model, while enjoying the growth of the new subsidiary and the market's newfound appreciation for efficient lithium energy innovations. "With a subsidiary that is marketed as a focused and dominant player in the growing lithium and rare metals explorer realm, we believe it will provide the necessary visibility and efficiency that potential joint venture partners are looking for," states president and chief executive officer Gary Schellenberg.

TNR has reserved the domain name. The site will be linked to the current TNR website and feature property information, lithium industry articles, and relevant technical information. The site is currently in the process of being designed and constructed.

Completion of the spin-out transaction is subject to a number of conditions, including regulatory approval, shareholder approvals and approval of the British Columbia Supreme Court. There can be no assurance that the transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the information circular to be prepared in connection with the spin-out transaction, any information released or received with respect to the spinoff may not be accurate or complete and should not be relied upon. Trading in the securities of exploration and development stage resource companies should be considered highly speculative.

Tuesday, April 14, 2009

Lithium in Spotlight so is WLC, TNR, CLQ - Info on Lithium Expert Fred Breaks (AVL, Houston Lake, RES)

More and more, the world is realizing the need for a cleaner and more efficient energy solution.

When the powerhouse China steps into the arena, we will see alot more juniors jumping into the foray with their early stage properties. Whether or not those properties have merit is another question though!

Since our last lithium corporation coverage article March 18:

MCI has fallen off from $0.13 to around $0.08-0.09 range
Updates: They seem to have acquired a property with Zimtu group.

Not sure how MCI plans on funding this exploration project however, they seem to have a tendency to drop projects and jumped in/out several other commodities without much progress - Potash, Gold, etc.

Mountain Capital, Zimtu Capital property agreement

2009-04-07 16:31 ET - Property Agreement

The TSX Venture Exchange has accepted for filing an property acquisition agreement dated Feb. 26, 2009, between Mountain Capital Inc., Zimtu Capital Corp., a TSX Venture Exchange-listed company, and 877384 Alberta Ltd. (Debbie Dahrouge), whereby the company will acquire a 100-per-cent interest in 41 metallic and industrial minerals permits, which consist of three separate properties located west to northwest of Edmonton, Alta.

Total consideration consists of $90,000 in cash payments, 1.2 million shares of the company and 1.2 million share purchase warrants exercisable at 25 cents for two years, all payable and issuable within five days of exchange acceptance.

In addition, there is a 3-per-cent net smelter return and a 5-per-cent gross overriding royalty on the gross production of diamonds. The company may, at any time, purchase 1 per cent of the net smelter return for $1-million in order to reduce the total net smelter return to 2 per cent. There is no buyback clause relating to the gross overriding royalty. There is a finder's fee of $8,400 cash and 67,200 shares payable to Richard Macey.

Last I checked they had $460K term deposit and $23K cash from SEDAR quarterly filings, can they afford to do much more with the acquisition? Zimtu is affiliated with Commerce Resources (CCE.v) - fair guess it is the same Dahrouge associated with VP Jodi Dahrouge, no? Makes you wonder why CCE doesn't keep it for itself for a mere $90K, CCE has $2 million+ in the bank.

TNR GOLD CORP (TNR:TSX) - risen up to $0.07 from $0.05 - moving gradually up?
This group surprisingly was able to appoint Rare Element Resources' and Avalon Venture's flagship project founder - Dr. Fred Breaks.

Quick GOOGLE Search of F.Break's background will reveal this as very positive news - to have someone of that merit guide and review TNR's moves is a tremendous accomplishment. May see more market appreciation or even investors from RES / AVL jumping on board TNR. This guy has found some of the largest pegmatite type rare earth / lithium deposits in Canada. Houston Lake Mining's Pakeagama Lake property mineralization was also discovered by Dr Breaks it seems (link here).

Based on this initial field work, Dr Fred Breaks of the OGS conducted three weeks of detailed mapping and sampling in 1998. Dr. Breaks identified a strongly zoned, complex petalite subtype pegmatite. The combination of size, accessibility and the presence of both geochemical indicators and rare metal ore minerals, provide the Property with high potential for economic rare metal mineralization
Channel sampling of the 13 metre wide Northern Wall Zone of the Pakeagama Lake pegmatite returned 344 g/t tantalum oxide, 0.90 percent rubidium oxide, 1776 g/t cesium oxide, 68.9 g/t tin, 131.9 g/t niobium oxide, 1.34 percent lithium oxide, 25.9 g/t thallium, and 42.2 g/t gallium over a true width of 11 metres. The Pakeagama Lake Northern Wall Zone channel sample results compare favourably to Sons of Gwalia Limited’s Wodgina mine which is located in Western Australia. The Wodgina mine is a world-class tantalum-only producer containing 27 million tonnes averaging 420 g/t tantalum oxide.
Some objective links from around the web & Ontario Government (Geological Survey) about Fred Breaks:

Rare Element Pegmatites - North-Central Ontario - AVL Calculated Resources Estimate 2001 - 800,000 tonnes averaging 0.032 wt% Tantalum, 340,000 tonnes averaging 0.037 wt% Ta2O5 and 2.29 wt% Cs2O

Separation Lake and surrounding area has in recent years emerged as, if not the most, certainly among the most, important host to rare-element pegmatites in Ontario. The Separation Rapids pegmatite field (Figure 1), located where the English River forest access road crosses the English River near Separation Rapids, was first discovered in the 1993 field season by Fred Breaks of the Ontario Geological Survey (OGS).

However, it wasn't until the 1998 work by Dr. Fred Breaks of the OGS that the full implications of the discovery were realized. The Pakeagama Rare Metals pegmatite was the recent subject of a two year collaboration between Dr. Breaks of the OGS and Dr. Andy Tindle of The Open University in the United Kingdom. Their extensive documentation of the pegmatite depicted the second largest, complex type, petalite sub-type pegmatite in Ontario with highly anomalous to economically significant values of tantalum, cesium, rubidium, lithium, beryllium, niobium, tin, gallium, germanium and thallium.




CLQ hanging around $0.15 - no significant newsflow - behind the scenes development I suppose?

WLC spiked up from $0.52 to $0.75 last week along banking optimism in the US tapering off to $0.67 today - in process of arranging $4.03 million financing and has a new IR firm. This is a solid group with capital and high profile industry connections (CEO used to run Jinshan Mining) - I fully expect TNR, CLQ, and WLC to be the ones to aim for if lithium starts getting more attention (and it has). Keeping in mind they'll likely want related parties to be supporting stocks lately so it hangs around $0.80 so there is a slight premium for the warrants! Good to buy on a drop to $0.60 as I expect it to bounce back to around $0.70 for PP appearance's sake.

Western Lithium arranges $4.03-million financing

2009-04-07 08:57 ET - News Release

Ms. Cindy Burnett reports


Western Lithium Canada Corp. will be proceeding with a brokered private placement to raise $4.03-million by issuing up to 6.2 million units at a price of 65 cents per unit, plus an overallotment option of up to $1.04-million.

Each unit will comprise one common share and one-half of a common share purchase warrant. Each whole warrant will entitle the holder to purchase an additional common share for a period of 12 months at a price of 80 cents.

Western Lithium Canada Corp
Shares Issued51,220,000
Close 2009-04-06C$ 0.69
Recent Sedar Documents

Western Lithium arranges $4.03-million financing

2009-04-07 08:57 ET - News Release

Ms. Cindy Burnett reports


Western Lithium Canada Corp. will be proceeding with a brokered private placement to raise $4.03-million by issuing up to 6.2 million units at a price of 65 cents per unit, plus an overallotment option of up to $1.04-million.

Each unit will comprise one common share and one-half of a common share purchase warrant. Each whole warrant will entitle the holder to purchase an additional common share for a period of 12 months at a price of 80 cents.

The company has engaged Haywood Securities Inc. to act as agent for the offering, and has agreed to pay Haywood a cash commission equal to 6 per cent of the gross proceeds of the private placement. The company will also issue to Haywood that number of agent's warrants as is equal to 6 per cent of the number of units sold. Each agent's warrant will entitle Haywood to purchase one common share for a price of 70 cents for a period of 12 months. All of the securities issued pursuant to the private placement will be subject to a hold period expiring four months and a day after the closing date.

The closing of the sale of the units is expected to occur on or about April 30, 2009, and is subject to the approval of the TSX Venture Exchange.

Proceeds of the private placement will be used to finance continuing engineering and development studies for the company's lithium project in Nevada, including additional drilling of the lithium deposit to conform to National Instrument 43-101 requirements. Proceeds will also go toward general corporate purposes.

We seek Safe Harbor.

Will be interesting to see them drilling in Nevada for Lithim though!! That area is famed for easy-production of lithium brine (liquid form)!!


China Vies to Be World’s Leader in Electric Cars


TIANJIN, China — Chinese leaders have adopted a plan aimed at turning the country into one of the leading producers of hybrid and all-electric vehicles within three years, and making it the world leader in electric cars and buses after that.

The goal, which radiates from the very top of the Chinese government, suggests that Detroit’s Big Three, already struggling to stay alive, will face even stiffer foreign competition on the next field of automotive technology than they do today.

“China is well positioned to lead in this,” said David Tulauskas, director of China government policy at General Motors.

To some extent, China is making a virtue of a liability. It is behind the United States, Japan and other countries when it comes to making gas-powered vehicles, but by skipping the current technology, China hopes to get a jump on the next.

Japan is the market leader in hybrids today, which run on both electricity and gasoline, with cars like the Toyota Prius and Honda Insight. The United States has been a laggard in alternative vehicles. G.M.’s plug-in hybrid Chevrolet Volt is scheduled to go on sale next year, and will be assembled in Michigan using rechargeable batteries imported from LG in South Korea.

China’s intention, in addition to creating a world-leading industry that will produce jobs and exports, is to reduce urban pollution and decrease its dependence on oil, which comes from the Mideast and travels over sea routes controlled by the United States Navy.

But electric vehicles may do little to clear the country’s smog-darkened sky or curb its rapidly rising emissions of global warming gases. China gets three-fourths of its electricity from coal, which produces more soot and more greenhouse gases than other fuels.

A report by McKinsey & Company last autumn estimated that replacing a gasoline-powered car with a similar-size electric car in China would reduce greenhouse emissions by only 19 percent. It would reduce urban pollution, however, by shifting the source of smog from car exhaust pipes to power plants, which are often located outside cities.

Beyond manufacturing, subsidies of up to $8,800 are being offered to taxi fleets and local government agencies in 13 Chinese cities for each hybrid or all-electric vehicle they purchase. The state electricity grid has been ordered to set up electric car charging stations in Beijing, Shanghai and Tianjin.


Taken from Forbes last year

The lithium bonanza may just be starting. Lithium-ion batteries are integral to the automobile industry's plans to wean itself off fossil fuels. The hotly anticipated Chevrolet Volt, a plug-in hybrid car slated to debut in 2010, will use a lithium-ion battery alongside a 1.4-liter gas engine. Mercedes plans to roll out a hybrid version of its S-Class sedan in 2009 and will similarly rely on lithium-ion technology to produce superior mileage. Nissan (nasdaq: NSANY - news - people ) is working with NEC to mass-produce lithium-ion batteries for hybrids, in hopes of churning out 65,000 per year by 2010.

Since a vehicle battery requires a hundred times as much lithium carbonate as its laptop equivalent, the green-car revolution could make lithium one of the planet's most strategic commodities. The rush is on to find and develop new sources of it, a race that has mining companies scouring the globe's remotest corners, from the high-altitude deserts of Chile and Bolivia to the wilds of northern Tibet. The prospectors seem undeterred by the possibility that lithium's automotive heyday could be cut short by the cost and complexity of lithium-ion batteries. They prefer instead to focus on optimistic forecasts. Kevin McCarthy, a commodity chemicals analyst at Bank of America (nyse: BAC - news - people ), sees the potential for double-digit annual sales growth for lithium carbonate at least through 2012.

Such rosy short-term predictions have investors swooning over Sociedad QuĂ­mica y Minera de Chile S.A., or SQM, the Chilean fertilizer and mining company that produces nearly a third of the world's lithium carbonate and whose leather-skinned employees brave the Salar de Atacama for the sake of gadget lovers. In the past three years the Big Board-traded shares of SQM have climbed from $11 to $22. In the first six months of 2008 SQM reported a profit of $191 million, up 103% from a year earlier, on sales of $787 million, up 41%.