“Money needs to start flowing into the lithium market quickly”

Why American Lithium Corp. (STOCK:LIACF)

May be One of the Biggest Investment Discoveries of 2020?

News Release 7-27-2020: LIACF Secure Water Rights for Development of TLC Lithium Project ( READ MORE )

A massive supply crunch could soon create one of the greatest investment opportunities of the year.  One that could fuel another sizable bull market, giving American Lithium Corp. (STOCK:LIACF) incredible profit potential. (Source 1)

The last time we saw this much potential was in 2016.  Right before:

 

·       The Global X Lithium ETF (LIT) exploded from a low of $16 to nearly $40

·       Albemarle Corp. (ALB) rocketed from $39 to $136

·       Sociedad Quimica y Minera de Chile (SQM) ran from $11 to $57

·       Lithium Americas (LAC) soared from a low of $1.05 to $10.38

 

At the time, the world was just beginning to see massive lithium price spikes. Demand for electric vehicles was just beginning to explode.

Lithium was struggling with an ongoing supply deficit.

However, the lithium supply crunch is back.

After pulling back, lithium is running into the same supply-demand problem all over again, and we’re quickly nearing another massive supply crunch. 

In fact, according to Reuters: (Source 2)

A new demand surge is already looming in the form of the multiple ‘green stimulus’ packages as governments try and kick-start locked-down economies. You don’t have to be a market genius to see that another price boom is coming sooner or later as an under-powered supply chain has to catch up with the next demand surge.”

All thanks to increasing demand for electric vehicle demand, which is growing much faster than anyone expected. 

In fact, according to a new study from the Boston Consulting Group, by 2025, EVs could account for a third of all auto sales.  By 2030, EVs could surpass internal combustion engine vehicles with a market share of 51%. (Source 3)

That could lead to a sizable spike in demand with lithium used in EV batteries.    

But for that to happen, the world needs far more lithium. 

To give you an idea of how much supply the world may need, consider this.

“The production of minerals such as graphite, lithium and cobalt could increase by nearly 500 percent by 2050” to meet demands for new technologies, including EVs, according to The World Bank, as noted by Forbes. (Source 4)

Right now, lithium prices have dropped because we have far too much supply on hand.

New lithium projects are either being canceled or delayed.  Albemarle for example delayed construction plans for nearly 125,000 tons of additional capacity, says Reuters. (Source 5)

But it’s a temporary pullback.

One that will lead to a major shortfall in supply, and lead to an incredible spike in lithium prices.  

That’s because by 2021, the lithium market could balance out as demand picks up momentum on the electric vehicle (EV) boom and eats up supply, says Morningstar analyst Seth Goldstein. (Source 6) Bloomberg New Energy says we could see 548 million electric vehicles on the road by 2040.  (Source 7)

In addition, “Benchmark Minerals forecasts lithium demand to reach 2.2m tonnes by 2030 but as things stand lithium supply (LCE) is only set to reach 1.67m leaving a huge structural deficit. This demand will be driven by growing EV adoption through the 2020s, with Benchmark Minerals forecasting an EV penetration rate of 4.3% in 2020 rising to 30.7% in 2030.” (Source 8)

Meanwhile, according to CleanTechnica: (Source 9)

“Miners have barely scratched the surface of the global lithium potential. The challenge is to match the mining timeline with the electric vehicle manufacturing timeline. It can take years to start up a new mining operation, and meantime automakers are already gearing up for an electric vehicle recovery after the COVID-19 downturn.”

That will only lead to a monster supply crunch.  Thanks to the EV boom, we could find ourselves in desperate need for lithium supply. 

That’s where a company like American Lithium Corp. (TSXV:LI) (STOCK:LIACF) comes into play after reporting highly encouraging results from ongoing metallurgical testing regarding recovery of lithium from its wholly owned TLC Lithium Claystone discovery near Tonopah, Nevada.

 

Who is American Lithium Corp. (TSXV:LI)(STOCK:LIACF)?

 

American Lithium is actively engaged in the acquisition, exploration and development of lithium deposits within mining-friendly jurisdictions throughout the Americas. The company is currently exploring and developing the TLC project located in the highly prospective Esmeralda lithium district in Nevada. TLC is close to infrastructure, 3.5 hours south of the Tesla Gigafactory, and in the same basinal environment as Albemarle’s Silver Peak lithium mine and several advancing deposits and resources, including Ioneer Ltd.’s (formerly Global Geoscience) Rhyolite Ridge and Cypress Development Corp.’s Clayton Valley project.

American Lithium Corp. Confirms Real Scale of TLC Lithium Claystone property

The company just announced a mineral resource estimate prepared by Stantec Consulting Ltd. for the Company’s wholly owned TLC Lithium Claystone property near Tonopah, Nevada. Maiden pit-constrained Resource (at 400 ppm cut-off) of 1.107 million Mt Measured and Indicated plus 362,000 Mt Inferred containing 5.37 million Mt Lithium Carbonate Equivalent M+I and 1.76 million Mt LCE Inferred.

CEO Michael Kobler states “We are extremely excited with these results, as they confirm the real scale of this project.” We now plan to complete more metallurgical work and process testing, followed by an economic evaluation in the form of a prefeasibility study.”

In addition, testing conducted by McClelland Laboratories of Sparks, Nevada, demonstrates that lithium recoveries exceeding 90% are achieved in 10 minutes with sulfuric acid leaching. Drill cuttings were subjected to several extraction methods including: agitated leach, acid curing and counter-current agitated leach.

In combination with the process evaluation, leach solution temperature was investigated. In general, TLC lithium claystone is consistently highly leachable throughout the project with leach times comparing very favorably with other claystone projects. 

“Our excitement with TLC continues to build as the project gets further derisked at every stage. Very few sedimentary lithium deposits are like TLC. With high recovery rates, no deleterious elements, minimal overburden and a location minutes from major infrastructure, TLC is well positioned to be at the forefront of future lithium development,” added Kobler.

 

Lithium Demand is Projected to Rise Three-Fold to One Million Tons by 2027 (STOCK:LIACF)

 

Lithium demand is projected to rise three-fold to one million tons by 2027, according to Roskill’s 15th Edition Market Outlook, driven primarily by the rapidly growing demand for electric vehicles and advances in grid power storage.

Despite this growing demand, the Bank of Montreal only expects to see between 80,000 and 91,500 tons of lithium produced globally by 2025.

Currently, nearly 90 percent of the world’s lithium comes from evaporated liquid brine. In Chile, Bolivia, and Argentina, brine filled lakes – or salars – have produced world-class lithium concentrates upwards of 1,000 parts per million. While there is nothing wrong with evaporation as an extraction process, it takes a tremendous amount of time and often results in lower lithium percentages relative to the input concentrations.

Lithium Americas Corp. is a good example of a traditional lithium brine producer. With projects across North and South America, the company’s Cauchari-Olaroz lithium project in Argentina alone has 1.5 million tons of proven and probable reserves, with an extraction cost of $2,495 per ton. The project life for the Cauchari-Olaroz project is spread out over an estimated 40 years, in part due to the tremendous land area needed for the evaporation of the lithium brine.

 

Why Consider American Lithium Corp. Today

 

There are plenty of reasons to pay close attention to American Lithium Corp.

For one, lithium could soon face a severe supply crunch.

All as the market begins to balance out as demand picks up momentum on the electric vehicle (EV) boom, says Morningstar analyst Seth Goldstein.

In addition, “Benchmark Minerals forecasts lithium demand to reach 2.2m tonnes by 2030 but as things stand lithium supply (LCE) is only set to reach 1.67m leaving a huge structural deficit. This demand will be driven by growing EV adoption through the 2020s, with Benchmark Minerals forecasting an EV penetration rate of 4.3% in 2020 rising to 30.7% in 2030.”

 

Two, sales of electrified vehicles are growing much faster than expected, according to a new study from the Boston Consulting Group.  By 2025, EVs could account for a third of all auto sales.  By 2030, EVs could surpass internal combustion engine vehicles with a market share of 51%.   That could lead to a sizable spike in demand with lithium used in EV batteries.   

And three, American Lithium Corp. is already seeing favorable lithium results at its TLC Lithium Claystone property near Tonopah, Nevada.

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