Canada Lithium was hit hard in the soft lithium developers market, when it had to change its resource estimations this year. The project economics was adjusted as well recently. Everybody is looking for China to lead the way in Green Mobility Revolution and we think this view is warranted. We are following Canada Lithium from the onset of Lithium investment idea in 2009, but have never invested in this company. It was at the mercy of some twists and turns like abrupt corporate changes, departure of the Lithium founding president and this "misunderstanding" about the real economics of the project. All these do not add too much confidence to their game plan for us at this moment, but make your own DD as always - company has its followers and these depressed level can be an entry point, once you understand the real situation there.
We will take this article as a sign that the bottom in Junior mining developers is very close and general market appetite for risk will sip down to the more risky plays. James Dines with his call on the Rare Earths and our own on the Lithium could be right on timing now. All lithium juniors are depressed now and we can see accumulation patterns in a number of them: International lithium, Rodinia Lithium and Lithium One will be our game plan for the next expansion in this markets. Brine model provides more economical and speed to market advance now and if you can add some hard rock mining projects as well like International lithium or Lithium One - you can have a balanced play on increasing Lithium demand. Strong strategic partners will be providing support and demand for the potential production from these companies.
"Newly listed International Lithium (ILC-V) spent two years cherry-picking projects, securing a strategic partner and fulfilling requirements for a plan of arrangement. Now, the company is ready to get the drills turning on its lithium and rare metal properties. "Our near-term plan is fairly simple. It is to get exploring," says International Lithium president Mike Sieb. "We have prime assets that are just crying for advancement and delineation."
Canada Lithium Corp. (CLQ), building a mine in Quebec, said demand may outstrip global supply by 2015 because China will need more electric-car batteries that contain the metal.
The Toronto-based company will profit from China’s goal of producing 1 million electric vehicles a year by 2015 to reduce carbon-dioxide emissions and gasoline imports, Canada Lithium Chief Executive Officer Peter Secker said. By 2020, the Asian country plans to build 5 million electric cars a year, which would require tripling current lithium production, Secker said.
“If you are a strong believer in the green economy and electric vehicles, then demand is going to exceed supply by 2015-2016,” Secker said today in a telephone interview. “It’s all very much focused on China.”
The cost of lithium, prized for use in batteries because it’s the lightest metal and able to hold more energy per unit of weight than other materials, has increased about 20 percent this year to about $6,000 a metric ton, a level last seen in 2008, Secker said. The price may increase more as demand rises and if the metal begins to be traded on a market, he said. Negotiated contracts set prices now.
Demand for lithium will increase for use in laptops and cell phones as well as for wind-energy and solar-power projects that may incorporate huge batteries to store electricity not immediately needed for the grid, he said.
Mines in South America produce about 55 percent of the world’s lithium supply, while Australia contributes about 35 percent, Secker said. A new mine in Australia is due this year, and one in Argentina by 2014-15, he said.
Construction is due to start at Canada Lithium’s project near Val d’Or, Quebec, in the third week of August, followed by major equipment deliveries by next June and operations beginning by December 2012, Secker said. Production is to reach full capacity of 20,000 tons a year by 2014.
The company plans to raise $100 million in debt markets this year in addition to the $130 million it raised from shareholders in February, Secker said.
Secker said that while he wants to grow Canada Lithium, the company isn’t in talks about being acquired. In 2009, Mitsui & Co., a Tokyo-based trading house, said it would buy lithium from Canada Lithium for sale in Asia.
Canada Lithium was unchanged at 62 cents as of 1:44 p.m. in Toronto Stock Exchange trading. The shares have declined 69 percent this year, giving the company a market value of C$156.6 million ($162.5 million).
To contact the reporter on this story: Colin McClelland in Toronto at firstname.lastname@example.org."