Wednesday, August 18, 2010

Lithium powered Porsche 918 - faster than Carrera GT to 60 and MPG like the Prius TNR.v WLC.v LI.v LIT.v

Porsche 918 Spyder will come with an electric plug

Porsche 918 Spyder in a plug-in hybrid version is going into production, promising low emissions and 198 m.p.h.

Part of the Geneva Motor Show, the 918 Spyder concept offered Porsche looks and Prius mileage–more specifically, the plug-in hybrid Spyder was offering quotes of up to 78 miles per gallon–and that got most everybody interested. And now, almost five months later, Porsche is taking the concept car into full-bore reality.

Originally, the 918 Spyder boasted two 109 horsepower motors and a lithium ion battery, with a 500 horsepower V8 gas engine to back things up. Word is that the original concept powertrain won’t be significantly altered, and though no one yet knows when these will hit dealerships, we do have an idea of the price tag. You’ll want to be sitting down for this.

If the $100,000 all-electric and very sporty Tesla didn't get that message across, then maybe a plug-in hybrid Porsche will do the trick.

On Wednesday, Porsche announced it would go ahead with development of a plug-in Porsche 918 Spyder to be built in Germany. The car will be based on the 500-horsepower V8 concept car Porsche showed off at the Geneva Motor Show this spring.

Using its combustion engine and electric motor in racing mode, that two-seater, midengine Spyder had a top speed of 198 miles per hour and could go 0 to 60 in under 3.2 seconds. In economy driving mode, it was capable of 113 miles to the gallon.

The company said it decided to move forward with development because of the "overwhelming response" to its concept car.

The new plug-in Spyder will be built in a limited edition, reflecting the expectation that, while it's a very flashy car, it will be too expensive for the masses.

Although Porsche will announce pricing later, the electric Spyder is expected to cost far more than the Tesla.

The production model is set to cost as much as $650,000.

Thursday, August 12, 2010

China may cut Lithium / Rare Earth exports TNR.v ILC.v CLQ.v WLC.v RM.v

world's top superpowers via aggressive trade pricing and business tactics, you have to wonder what's next. If anything, policies like this suggest a very likely next step - consolidating value-added services back home to continue fueling the growing middle class.

When you have grown to become one of the

The days of cheap Made in China goods are no more.

Today, iPhone 4 and premium products are often entirely finished in Asia.

Instead of merely outsourcing cheap labor, China is now looking at consolidating the entire process, leaving the rest of the world as pure consumers.

As value investors, this is a strong signal that commodities are where people should be focusing their attention.

After all, like the gold story we've all heard before: you can print money and issue treasury bills, but end of the day gold and hard assets will be the ones with true tangible value. You can't make this stuff out of thin air!

With this in mind, there are some lithium stories that we've been longterm followers here that deserve a second look. TNR Gold (TNR.TSX) and its spinoff company International Lithium has been moving up despite summer doldrums.

We expect as the spinoff shares are announced, more upside is to come. Who doesn't like free things? As any companies announcing dividend will see, people generally rush in right before. We recommended TNR at $0.045 at its low point in 2008 - we are saying it's a good buy once again at $0.20's.


The Chinese overnment indicated over the weekend at the National People's Congress (NPC) in Beijing that it would curb the export of lithium and other rare earth compounds, opting instead to build a strategic reserve.

Hu'ercha, a deputy to the NPC from north China's Inner Mongolia Autonomous Region, said on the sidelines of the legislative body's annual session on Friday that China should set up a national reserve of rare earth resources and work out development strategies for rare earth-related new and high-tech industries "as soon as possible."

"The government should attach greater importance to the purchase and storage of the strategic resources," Hu'ercha stated.

Influencing the Chinese lawmakers comments is the fact that Hu'ercha is also mayor of Inner Mongolia's Baotou city, home to 75 percent of China's rare earth reserve. The Chinese politician urged the country to work out policies to support the development of rare earth-related industries and set up a development fund to strengthen basic research on rare earth.

Though China supplies about 90 percent of the world's rare earth, it has little say on international pricing due to inadequate industrial innovation and slow development of high-end products.

With China's booming growth in domestic auto sales, now ranked as the world's largest, Premier Wen may be listening to Hu'ercha and other Chinese party political backers as demand for lithium batteries and other products grow.

While lithium is not considered a rare earth and readily available, concentrations plentiful enough to mine economically are a different matter. Already companies like Korea's POSCO, the world's fourth-largest steel maker, are moving to build new sources of supply themselves while brine recovery technology lies at the forefront. POSCO recently made a rare bid to invest up to US $5 million in a junior exploration and development company's Mexico brine project if the level of lithium and other metals proved worthwhile. Chile, a hotbed oflithium exploration, is also the world's largest exporter. Pan American Lithium (TSX.V: PL), which entered into the letter of intent with POSCO, is also involved in a 100% company-owned lithium brine property in Chile. The recent earthquake in Chile delayed initial reports on Pan American's lithium property, though the Company continues to see record trading levels despite the delay.

Bad JV partner choices can have worse longterm implications PL.v, LIT.v, TNR.v, ILC.v, CLQ.v, WLC.v

Mergers and acquisitions are still happening in the lithium space, with companies snapping up quality projects.

LIT.v which is still halted, has updated due diligence extension on their large merger with Talison. It will be interesting to see how this opens after Aug 12.

Salares Lithium extends Talison agreement to Aug. 12

2010-08-09 14:49 ET - News Release

Mr. Todd Hilditch reports


Salares Lithium Inc. and Talison Minerals Pty. Ltd. have provided an update regarding the proposed merger to combine their respective lithium assets. For details of the proposed merger, please see the news release in Stockwatch dated July 15, 2010, and filed on SEDAR.

Amended merger timetable

Talison and Salares have agreed to extend the termination date of the letter agreement that sets out the terms upon which the proposed merger will be implemented from Aug. 9, 2010, to Aug. 12, 2010, in order to allow the parties to complete multijurisdictional due diligence in connection with the proposed merger.

The remainder of certain previously announced dates will remain the same, including the meeting date of the special meeting of shareholders of Salares to be held on Sept. 16, 2010, and the record date of Aug. 11, 2010, for determining which shareholders of Salares will be able to vote at the meeting. The meeting will be held in the Point Grey Room of the Marriott Vancouver Pinnacle Hotel, 1128 West Hastings St., Vancouver, B.C., at 10 a.m. (Vancouver time).

The completion of the proposed merger is anticipated to be implemented by the end of September, 2010, subject to the parties entering into a definitive agreement on or before Aug. 12, 2010, the completion of satisfactory due diligence on or before Aug. 12, 2010, and the parties obtaining all necessary approvals and satisfaction of other conditions.

Private placement

The previously announced private placement of approximately $40-million of subscription receipts of Salares is expected to close on or about Aug. 19, 2010. For additional information regarding the private placement, please refer to the press release.

A presentation of the transaction highlights can be accessed at the Salares and Talison websites.

About Talison Minerals Pty. Ltd.

Talison Minerals Pty. Ltd. is the leading global producer of lithium. Talison mines and processes the lithium-bearing mineral spodumene at the Greenbushes lithium operations in Western Australia. Talison has an extensive, well-established global customer network and a leading position in the growing Chinese market.

It's one thing to announce a strategic partnership, but a misstep here can mean a drastic drop, as in the case of Pan American Lithium (PL:TSXV), which came out touting promised payments from POSCO (Korean Steelmaker).

When payments of the $5M private placement dragged on with extended due diligence periods, the stock started taking a dive, with insiders selling in waves.

Just a fraction of the selling. Let this be a lesson for Li juniors out there, choose your JV partners carefully for if they don't pan out it could hurt you more than not ever having announced the JV/investment in the first place!

Pan American Lithium Corp. (PL)

As of April 7th, 2010
Filing DateTransaction DateInsider NameOwnership TypeSecuritiesNature of transaction# or value acquired or disposed ofUnit Price
Mar 10/10Mar 10/10Minni, Jerry AnthonyIndirect OwnershipCommon Shares10 - Disposition in the public market-5,000
Mar 10/10Mar 10/10Minni, Jerry AnthonyIndirect OwnershipCommon Shares10 - Disposition in the public market-5,000
Mar 10/10Mar 10/10Minni, Jerry AnthonyDirect OwnershipCommon Shares10 - Disposition in the public market-10,000
Mar 10/10Mar 10/10Minni, Jerry AnthonyDirect OwnershipCommon Shares10 - Disposition in the public market-10,000
Mar 10/10Mar 10/10Minni, Jerry AnthonyDirect OwnershipCommon Shares10 - Disposition in the public market-3,000
Mar 10/10Mar 10/10Minni, Jerry AnthonyDirect OwnershipCommon Shares10 - Disposition in the public market-7,000
Mar 09/10Mar 09/10Minni, Jerry AnthonyDirect OwnershipCommon Shares10 - Disposition in the public market-10,000
Mar 09/10Mar 09/10Minni, Jerry AnthonyDirect OwnershipCommon Shares10 - Disposition in the public market-5,000
Mar 09/10Mar 09/10Minni, Jerry AnthonyDirect OwnershipCommon Shares10 - Disposition in the public market-5,000
Mar 09/10Mar 08/10Minni, Jerry AnthonyControl or DirectionCommon Shares10 - Disposition in the public market-15,000

Wednesday, August 4, 2010

World's First Lithium ETF Index Fund TNR.v, ILC.v, WLC.v, SQM, FMC, RM.v, CLQ.v

It's only a matter of time, no?

For laymens, ETF (Exchange Traded Funds) have grown leaps and bounds because of smaller investor's need for diversification. Diversification, is explained below.

Diversification in finance means reducing risk by investing in a variety of assets. If the asset values do not move up and down in perfect synchrony, a diversified portfolio will have less risk than the weighted averagerisk of its constituent assets, often less risk than the least risky of its constituents.[1]. Therefore, any risk-averse investor will diversify to at least some extent, with more risk-averse investors diversifying more completely than less risk-averse investors. Diversification is one of two general techniques for reducing investment risk. The other is hedging. Diversification relies on the lack of a tight positive relationship among the assets' returns, and works even when correlations are near zero or somewhat positive. Hedging relies on negative correlation among assets, or shorting assets with positive correlation.

It is important to remember that diversification only works because you reduce investment in each individual asset. If you start with $10,000 in one stock and put $10,000 in another stock, you have more risk, not less. Diversification requires you to sell $5,000 of the first stock to put in the second. Then you will have less risk. Hedging, in contrast, reduces your risk without selling any of your original position[2].

The risk reduction from diversification does not mean anyone else has to take more risk. If person A owns $10,000 of one stock and person B owns $10,000 of another, both A and B will reduce their risk if they exchange $5,000 of the two stocks, so each now has a more diversified portfolio[3].

When you invest in a single equity, say Lithium, you face systematic risk in addition to the company's operational risk. This is mismanagement, errors in decision makings, competition, etc. Systematic risk, on the other hand, is the risk of an entire financial system meltdown - something you can't diversify away entirely.

The CAPM (Capital Asset Pricing Model) strong supports buying the market - but for a typical investor how is it possible to know the entire market?

Enter the ETF.

ETF attempts to replicate the exact market or sector the investors are trying to buy into.
One of the other longer running index so far in this emerging industry of Lithium is Byron's Lithium Index.

It includes some of our favorite equities here at Mining 101.

Western Lithium Corp (WLC.v) - trading, no official deals yet, possibly with US government?
International Lithium (ILC.v) - soon to IPO, no official deals yet
Canada Lithium (CLQ.v) - offtake + marketing deal with Mitsui
Galaxy Minerals ASX - already bought by Mitsubishi / Creat Private Equity group China
Lithium Americas ( - deal through Magna / Mitsubishi
Lithium One - deal with Korea Resources
New World Resources - Bolivia. Difficult to work and people want Uyuni.
Salares Lithium - M&A deal with Talison Minerals (one of largest lithium spodumene miners from ASX)
Orocobre Limited - recently listed on TSX with a large $20 million financing, JV deal with Toyota.

As you can see, the non bolded ones are lithium companies already with a JV partner.
There's only a handful of solid lithium developers yet to find a JV or strategic partner - rest assured WLC, ILC, and NW will have some reasonable deals soon, given the way this market has moved so far.
Global X is an interesting index to keep watch on.

Global X Lithium ETF (NYSE:LIT) was listed for trading last Friday (7/23/10). The new ETF tracks the Solactive Global Lithium Index, which is designed to reflect performance of the largest and most liquid lithium battery producing and mining and refining companies in the world. It is not a pure play on lithium, but it’s probably as close as we will get for quite a while.

According to the press release, the basket of lithium-related equities will give investors access to the complete lithium value chain, from mining and refining through lithium battery production. The initial allocations have 51% of the index in lithium battery manufacturers, while 49% consists of lithium mining and refining companies. There are no industry allocations targeted toward pharmaceuticals based on lithium.

The LIT summary page indicates an expense ratio of 0.75% and the fact sheet (pdf) pegs the number of holdings at 20. The five largest are Sociedad Quimica Minera ADR (SQM) 20.2%, FMC Corp (FMC) 16.7%, Rockwood Holdings (ROC) 7.9%, Advanced Battery Technologies (ABAT) 4.9%, and Ener1 (HEV) 4.7%. Lithium production appears to be a small portion of the operations of the largest holdings, which are primarily fertilizer and chemical firms. However, they are the largest players in the segment, making their inclusion appropriate.

The top five country allocations are US 49%, Chile 20%, Japan 10%, Canada 6%, France 5%. Lithium, the lightest metal, is used extensively in batteries and is referred to as a “green” commodity due to its ties to renewable energy. As such, there was a large amount of chatter leading up to the launch date. Carolyn Cui’s Wall Street Journal article (New ETF Charges Up a Niche) of July 18 further fueled the anticipated arrival of this new ETF.

Initial trading activity has been quite heavy for a new product. Let’s just hope that investors understand what they are buying and won’t be disappointed to learn that the fund will not track the price of lithium.