Lithium has been best known by the public for properties in medications used in treating mental disease.
The computer technology revolution of the last 20 years introduced the public to lithium ion battery storage.
Current and future development of electric vehicles and electronic products has made lithium an important vital metal — vital enough to be listed by Canada and the U.S.A. as a critical metal.
Demand has soared and will continue soaring. Current production of about one million tonnes a year will need to be two million in eight years and will exceed five million tonnes by 2040.
Lithium explorers are popping up everywhere to define reserves from three sources: mining of spodumene rock, extraction from brine salts in desert regions and from natural gas and oil fields.
The lithium has always flowed from gas wells but owners didn’t bother investing in extraction.
Extraction from gas fields is less environmentally damaging than the other sources, costs less and produces lithium faster.
In Saskatchewan privately owned Prairie Lithium is the most advanced of lithium companies in the gas extraction.
This column will consider three publicly-listed lithium explorers working the gas fields.
Lithiumbank Resources, currently priced at 90 cents, has 3.2 million acres of lithium leases, 90 per cent in Northern Alberta, the rest in Saskatchewan.
Focused first on the 761,000 acres Sturgeon Lake field Lithiumbank has access to 500 abandoned natural gas wells, saving $500 million in drilling costs and has access to power and road infrastructure.
Assessment of the field indicates 1.2 million tonnes of inferred lithium reserves.
With $16 million cash the company can start to build production to a one million tonnes goal by 2030.
E3 Lithium Corp., currently $1.69, has three acreages in Central Alberta with main focus on Clearwater near Olds. The company will drill the first well this summer to assess lithium content.
E3 estimates a gross profit of just over $10,000 a tonne for the lithium with plans for 1.6 million tonnes annual output by 2030. The company has $1 million cash to work on production.
EMP Metals Corp., priced at 40 cents, has four leases with 212,000 acres in Saskatchewan. Focus is on Tyvan near Weyburn where the company has accessed its first well bore to test for lithium in the briny deep water.
The company has a mere $2.5 million cash to continue development.
Cash in hand is invaluable as current market conditions are unfavourable for early stage companies wanting to raise money.
Development of actual revenues from these three companies could take several years, if they are successful.
Lithium prices have surged in recent months. They could fall but need one of two events to occur: finding and development of massive lithium supplies, or a substitute metal for batteries. At this stage no suitable alternate metal has been developed. New mines are planned in the next few years.
An investment in any of these three stocks is a long-term commitment and needs patience.
CAUTION: Remember when investing, consult your adviser and do your homework before buying any security. Bizworld does not recommend investments.
Ron Walter can be reached at [email protected]
The views and opinions expressed in this article are those of the author, and do not necessarily reflect the position of this publication.
