- Lithium Chile is well-positioned to benefit from recent bull run on lithium market and subsequent acquisition race
- Company’s holdings are the largest wholly owned lithium package held by a private operating company in Chile
- Company recently signed an MOU for a joint venture with Prosper One International Holdings Company Limited
Lithium-ion batteries are in greater demand than ever before, powering everyday devices ranging from smartphones and laptops to implantable medical devices and electric vehicles. It is this last item, the electric vehicle, that is largely credited with significantly driving up lithium’s price in recent years. Increasing consumer demand for electric vehicles has had the natural effect of simultaneously driving up the demand for the primary component needed to manufacture their batteries – lithium. This, in turn, has fueled fears of an impending global lithium shortage and sparked a bull run on the lithium market.
The threat of a lithium shortage is something of a phantom menace, because, in fact, the Earth has plenty of lithium to go around. Bloomberg New Energy Finance reports that, even with current demands, less than one percent of the world’s lithium supply will be diminished over the next decade. The true shortage, then, lies not in the metal but in the mining of it.
As discussed in a recent article (http://ibn.fm/slGew), prospective junior miners like Lithium Chile Inc. (TSX.V: LITH) (OTC: LTMCF) are right in line to benefit from the frenzied acquisition race that has commenced among competitors looking to satisfy their lithium needs by procuring lithium miners – whether through joint venture, buy-in or straight acquisition. As the old saying goes, ‘if you want something done right, do it yourself’, and these entities – including electric vehicle manufacturers, battery producers and strategic investment companies – are seeking to do just that when it comes to lithium by taking charge of mining operations.
Lithium Chile is poised to become one of the biggest beneficiaries of this acquisition race in the lithium mining space. With its immense tracts of indicated lithium assets in Chile, the world’s lithium epicenter, the company boasts one of that country’s largest lithium exploration portfolios, featuring 152,900 hectares spanning 15 properties. This has, not surprisingly, attracted the notice of players looking for hot lithium acquisition opportunities.
One entity to come courting has been Hong Kong-based Prosper One International Holdings Company Limited, with whom Lithium Chile recently entered into a memorandum of understanding for a joint venture agreement (http://ibn.fm/0lteY). As part of the agreement, Prosper One may earn a 55 percent interest in Lithium Chile’s Pintadas Norte project by incurring $3 million in staged exploration costs and will make a $1 million equity investment in Lithium Chile at a minimum price of $1 per share. Lithium Chile will operate the exploration programs for the Pintadas Norte project in exchange for a management fee paid by Prosper One. As a good-faith token to show serious intent, Prosper One has agreed to pay a C$250,000 break fee to Lithium Chile if a definitive agreement is not signed.
A veritable Cinderella at the ball, Lithium Chile is likely to receive many more purchase, option and joint venture proposals moving forward as drill dates draw nearer for the company and, in particular, if reserves are proven. Indeed, this joint venture could be just the tip of the proverbial iceberg.
Lithium Chile’s holdings include the largest wholly owned lithium package to be held by any private operating company in Chile and feature projects with high-grade lithium brines and outstanding chemistry at shallow depths – all of which boast good access to infrastructure.
Field test results announced in April identified multiple high-priority target areas at the company’s Salar De Atacama and Salar Ollague properties, and multiple large lithium brine targets of 20 to 25 square kilometers were discovered at both properties (http://ibn.fm/8nL94). The company’s Atacama property contains near-surface lithium brine values up to 1,330 mg/L of lithium, and its Ollague Property contains near-surface lithium brine values up to 1,140 mg/L of lithium.
Lithium Chile has additionally identified a high-priority lithium brine target area at its Coipasa project that covers more than 58 square kilometers. Results of field tests conducted at the project in May (http://ibn.fm/FEgo6) returned lithium values in near-surface brines ranging from 310 mg/L to 1,410 mg/L. This zone displays the same geophysical characteristics as the lithium-rich aquifers at Salar de Atacama, where the largest and highest-grade lithium brine producers in the world can be found.
In addition to its lithium assets, Lithium Chile also owns a significant copper, gold and silver property portfolio that consists of 28,124 hectares spanning six properties, which the company intends to spin out to its shareholders (http://ibn.fm/GOyYQ).
For more information, visit the company’s website at http://ibn.fm/LTMCF
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