The lithium sector continues to hum along with gold and silver as many mining stocks on the TSX Venture soar to new highs almost every day. Lithium X Energy has been among the best performers in 2016 and is one of the most valuable lithium deals on the Venture.
Lithium X Energy to drill Clayton Valley assets
Lithium X Energy is a story of two plays: Argentina and Clayton Valley. Its Nevada assets, just a few hundred miles from Tesla’s $5 billion Gigafactory which is set to double the world’s production of lithium-ion batteries. Enter the lithium stock revolution which has been concentrated on Venture explorers since last year.
I wrote about Lithium X Energy on December 1st, 2015. At the time, I posed the question:
“Lithium X Energy: strategic player or area play?
Lithium X Energy, previously Royce Resources described its land package at the bottom of an October 2nd press release:
“The Property consists of 77 unpatented placer claims covering 1540 acres located in Clayton Valley, Esmeralda County, Nevada. Clayton Valley is the site of the only lithium brine production operation in North America which has been in production since 1966. There are now 7 publically acknowledged aquifers on the producing property in Clayton Valley and Pure Energy Minerals, who owns the Clayton Valley South Project, has recently released an inferred resource of 816,000 tons of lithium carbonate equivalent on the Clayton Valley South Project.”
Click here to read Lithium stocks: bastion of speculation in dead resource game.
Note: Lithium X Energy traded between $0.37 and $0.405 per share that day and would go on to hit $2.50 by April.
Lithium X Energy Corp. has a stated goal to becoming a low-cost supplier to the lithium battery industry. The company’s press release this morning, could be the first step in accomplishing that goal, at least in the U.S. Lithium X announced this morning that it will soon be drilling at Clayton Valley North, Nevada.
Below are the highlights:
- “Four exploration holes planned from two drill sites in Phase 1
- Lithium X is targeting five known lithium-bearing aquifers and a lower gravel aquifer the Company believes has strong potential
- Results could enable an initial Resource Estimate for the Project”
The company reported:
“Lithium X is permitted to drill four new exploration holes at two Clayton Valley drill sites, initially. The targets include the five known lithium-bearing aquifers under Clayton Valley and a lower basal gravel aquifer in the deepest area of the Valley basin. The Company believes this lower basal gravel aquifer has strong potential for positive lithium concentrations and production rates.”
Mike Montandon, former mayor of North Las Vegas and an Advisor to Lithium X, had this to say:
“The opening of Tesla’s Gigafactory here speaks to Nevada’s amazing contribution to global industry, which coincidentally began with our rich history in mining.”
Click here to read the entire press release.
While Lithium X’s Clayton Valley projects are still very early stage the company’s land package is contiguous to the only producing lithium operation in North America – Silver Peak, owned and operated by Albemarle, the world’s largest lithium producer.
While the Clayton Valley address has certainly given cause for some investors to speculate as to what Lithium X might find in the coming exploration program, much of its $123.5 million market cap is likely attributed to its Sal de los Angeles lithium brine project.
Located in Salta province, Argentina, a well-known salar with positive historical economics, grade and size, the company owns 50%, and has the option to acquire up to 80% of the Sal de los Angeles lithium brine project.
The update provided for Sal de Los Angeles on July 20th, has likely led to the uptick in Lithium X’s stock since then. Check out the chart below:
Lithium X – 1 Month Chart
In July 20th’s press release, Lithium X reported that:
- “New Resource Estimate expected by August 30, 2016
- SRK Consulting has initiated pump tests to help upgrade the historical resource
- Construction permits for the pilot ponding facility anticipated within 60 days; negotiations have begun for longer lead items”
Click here to read more.
Many junior resource investors are happy to wait and speculate as to what the project in Argentina may contain. And, with a resource update just one month away, the market has something to focus on. Combined with the drill program set to start in Nevada, Lithium X has created a two-pronged development strategy that can be powerful when hoping to keep investor interest high. Lithium X Energy is a great example of a junior explorer who has been able to ink deals in lithium hot spots – Nevada and Argentina – while leveraging its exploration expertise in a bid to take full advantage of a robust lithium sector.
This article represents solely the opinions of Alexander Smith. Alexander Smith is not an investment advisor and any reference to specific securities in the list referred to in the article does not constitute a recommendation thereof. Readers are encouraged to consult their investment advisors prior to making any investment decisions. The information in this article is of an impersonal nature and should not be construed as individualized advice or investment recommendations.