Bear Market Shocker:

This Surprising Sector Has Been Soaring in Spite of the Down Market

Editorial Feature | Mar 4, 2023 | Tech 

Even while overall markets have slumped, the lithium sector has seen massive growth…

Even in a period that saw the S&P 500 and Nasdaq drop 19.4% and 33.1% respectively in 2022, one surprising group of stocks has continued to accelerate:

Lithium mining stocks.

Thanks to a historic supply-demand imbalance for lithium, investment in lithium is surging.

In fact, lithium prices have increased more than 11-fold in the last 24 months.

Recent research has turned up an under-the-radar exploration company with a groundbreaking new lithium extraction technology.

As you’re about to see, this transformational company is potentially sitting on an enormous amount of lithium – projected at $1.2 billion or more annually!

6 reasons why one little-known junior explorer is positioned for a headline-making year.

Reason #1: Lithium mining stocks have been soaring in spite of the overall market decline…

Experts remain bullish on lithium prices, despite recent market volatility and the potential for a prolonged global slowdown.

The “green energy” transition is driving a significant increase in demand for electric vehicles and energy storage systems. With this increase comes sky-high growth in the demand for lithium for their batteries.

One beneficiary of this growing megatrend is lithium mining stocks, which are seeing red-hot growth.

As lithium demand begins to outstrip supply — which is expected as early as 2025 — large lithium deficits will further drive growth in lithium mining stocks.

And as you’re about to see, one strategic company has the potential to ride this megatrend.

Reason #2: Major automakers have “turbocharged” the lithium market

Major automakers are taking advantage of green incentives, with most now committed to switching from gas-powered cars to hybrids or fully electric cars. Ford, GM, and Chrysler have pledged that one in two cars manufactured in 2030 will be zero emissions.

And many automakers such as GM, Ford, and Volvo — to name a few — have announced plans to stop manufacturing gas cars by 2035 and go full EV.

In all, over 40 automakers are making EVs today, and the International Energy Agency (IEA) predicts 230 million new EVs could be on the road by 2030 — up from 5.6 million in 2021.

Of course, all of these new EVs will require batteries in order to run…and those batteries will require millions of tons of lithium. 

While amounts vary depending on the battery type and model of vehicle, a single car lithium-ion battery pack could contain around 17.6 pounds (8 kg) of lithium, according to figures from Argonne National Laboratory.

That means the world is going to need at least one million metric tons of lithium by the end of the decade. 

To put that into context, lithium mines produced an estimated total of just 100,000 metric tons globally in 2021, a peak in production.

This continued demand – potentially driving lithium prices even higher – means that any lithium exploration company that can bring new sources of lithium to market could see a spike in its share price.

But continued growing demand for EVs isn’t the only reason that finding new sources of lithium is so important…

Reason #3: New sources of lithium are vital to U.S. energy independence.

America needs to beef up its lithium supply chain or face a catastrophic shortage.

That’s because lithium is now at the heart of vital industries such as transportation, communications, and energy storage.

This is increasingly problematic because with America’s own lithium reserves and production at critically low levels, the U.S. has become more dependent on imports of lithium and other critical minerals than ever before.

China has more lithium reserves, and far greater lithium production, than the U.S.

In 2021, Chinese lithium production was 14,000 metric tons. That’s roughly 14 times U.S. production. And Chinese lithium reserves, at 1.5 million metric tons, are twice U.S. levels.

China accounted for 80% of U.S. lithium-ion battery imports in the fourth quarter of 2021. That’s up from less than 50% in the fourth quarter of 2020, as the country nearly quadrupled its shipments to the United States.

So, it’s clear to see why there could be so much excitement about a small company with a high-potential source of this critical mineral.

With potentially one of the world’s largest lithium prizes and a new technology to help bring the lithium to market, this junior could soon become an important new source of domestically produced lithium.

Reason #4: New mining tech brings one lithium-rich mine roaring back to life.

Just recently, this company acquired what could potentially be one of the world’s largest lithium prizes – a 1,977 acre-property located in the Salta province of Argentina.

That property, known as the Pocitos 1 Lithium Salar, had been explored by its previous owner. And it was considered to be too costly – and too difficult – for extraction. Based on test drilling, geologists believe that this property could contain vast amounts of lithium.

And thanks to this innovative new mining technology, this property could soon be producing an enormous amount of lithium.

In fact, experts project the property could produce an average of 20,000 metric tons of carbonate a year. And it can be done cost-effectively with a few strategically placed drill holes. At current prices, that amount of lithium would bring in around $1.2 billion a year for decades to come.

Here’s how this new technology works:

Lithium is typically found in underground aquifers of salt-rich water known as brine. This brine usually contains between 100 and 1,000 parts per million (ppm) of lithium. It’s pumped into a series of large, shallow ponds on the surface where solar evaporation concentrates the lithium in the brine to about 6,000 ppm.

From there, the brine goes to a processing plant where it’s chemically treated to extract and refine the lithium. The entire process is a lengthy one, taking anywhere from 18 to 24 months. This was the initial plan for the Pocitos 1 property.

Based on test drilling, geologists believe there is a vast amount of carbonate under foot at Pocitos 1 – miles wide, miles long…and over 1,300 feet deep.

Thanks to this test drilling, the original owners knew about the vast deposits of lithium rich brine beneath the property. But they also discovered magnesium on the property, which has a strong bond with lithium and can make the refining process more complicated. So the mine’s original owners determined that it would be cost-prohibitive for them to refine using traditional mining techniques.

Shortly after the discovery of magnesium, the owners of Pocitos 1 sold off the “worthless” propertyLittle did they know, the buyer had an ace up its sleeve in the form of a renowned geologist — and energy-sector legend in Argentina — named Phillip Thomas.

Phillip is famous in the industry for having led the Rincon Lithium project that sold to Rio Tinto for $825 million, as well as the Pozuelos lithium project that sold to Ganfeng Lithium for $925 million.

More importantly, he recently teamed up with a brilliant group of engineers at the University of Melbourne to develop a groundbreaking new chemical solvent exchange process that’s able to break the strong magnesium-lithium bond.

The result is a proprietary process for extracting lithium from magnesium-rich brine that’s fast, effective, and profitable. 

Not only that, it has a 97.1% recovery rate of the lithium from the brine, ultimately, producing 99.6% pure carbonate. This is a remarkable achievement in itself when you consider that surrounding mines only have a 60% to 70% recovery rate with traditional brining methods.

Bottom line: This breakthrough innovation turned Pocitos 1 from a worthless plot of barren land into a massive mining project that could produce lithium valued at more than $1.2 billion annually.

Better yet, this new process – known as EkosolveTM – is light years faster than conventional methods.

With the EkosolveTM process, the brine is pumped directly into a filtering and washing system that extracts and refines the lithium using a continuous, four-stage process. It then returns the leftover brine back to the source aquifer where it came from. In other words, it eliminates the need for evaporation ponds, which take up many acres and blight the landscape.

Furthermore, it takes a mere three hours — yes, just three hours — instead of the 18 to 24 months required with conventional processing.

The EkosolveTM technology is also faster, more efficient and environmentally sustainable — with minimal disruption to the environment and local communities.

Reason #5: Tapping into what geologists believe could be the most lithium-rich brine in Argentina.

One of the most important factors geologists look for in lithium mining is brine flow.

To retrieve brine from underground aquifers, geologists typically drill a 1.5 meter well and use a submersible pump to bring the brine to the surface.

A higher flow rate indicates a larger aquifer, with a more significant lithium deposit.

In many of the unsuccessful projects, the flow stops completely within a few hours to a few days. But in the case of Pocitos 1, they estimated a flow rate of 100-130,000 liters per hour under its own pressure — for five straight hours — before the well valve was turned off.

This indicates a massive reservoir of lithium-rich brine beneath the property, making it what geologists believe could be the largest known geopressured brine reservoir in Argentina.

This is also significant when it comes to production, because a high natural flow rate eliminates the need to use pumps. That means lower capital expenditure and production costs.

Reason #6: Lithium Carbonate Prices Are Skyrocketing

Lithium is trading at $83,259 per metric ton as of mid-November, according to Fastmarkets. Now that’s an extreme level, so let’s not assume that prices will stay there.

While every analyst has an opinion on where prices are headed, the only opinion that matters as far as the industry is concerned is a company called CATL.

CATL is the biggest lithium-ion battery maker for EVs in the world, with a 32.6% market share in 2021. Most recently, they have been projecting that lithium prices will cycle between $30,000 and $68,000 per metric ton.

So let’s be conservative and say the price of lithium pulls back from its current highs to $60,000 per metric ton.

At that price, the Pocitos 1 Lithium Salar’s projected output of 20,000 metric tons per year would generate annual revenues of nearly $1.2 billion.

With a projected capital expenditure of $235 million to get the Ekosolve plant up and running — plus annual operating costs of $48 to $57 million — the company could see an after-tax return on their initial investment in the first three months of operations.

At this very moment, enormous investment capital is pouring into Argentina for lithium projects, with big miners eager to acquire up-and-coming mining operations.

Just in the past year, Argentina’s lithium triangle has been a hotbed for mergers and acquisitions activity, as the race to secure lithium supplies heats up.

With tight supply and soaring demand, lithium prices are likely to continue to increase.

That means future acquisitions are likely to be priced substantially higher, simply because the lithium is so much more valuable — and this company could be a prime target.

Don’t hesitate, sign up with your best email address to learn more about the little-known company with a transformative technology for lithium mining.

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