While December 05, 2017 kind of marked a turnaround for key retail sector stocks at the back of positive sales data, the day also saw lithium sector witnessing a lot of losses with Galaxy Resources slipping by 6%, Orocobre slipping by 3.6% and Lepidico down 10.8%. The losses seem to be at the back of profit booking to some extent. However, given the potential driven by lithium sector trend, we maintain a “Hold” on the three stocks.
 

Orocobre Ltd

Cauchari Drilling Results: Orocobre Ltd (ASX: ORE) has announced the drilling results of diamond drill hole CAU16 in the previously undrilled NW Sector of the Cauchari JV property, and is managed by JV partner, Advantage Lithium. ORE owns 35% of Advantage Lithium’s issued capital. The drilling shows high grade brine interval averaging 529 mg/l Lithium and 4,306 mg/l Potassium, including the four samples, that average 619 mg/l Lithium from 169 to 199 metres. Moreover, the drilling will continue in the SE and NW sectors into 2018 as the three drill rigs are now secured. Meanwhile, ORE stock has risen 58.06% in three months as on December 04, 2017.
 

Drill hole location and details (Source: Company Reports)
 

Galaxy Resources Ltd

Significant mineral resource upgrade: Galaxy Resources Ltd (ASX: GXY) has announced a significant mineral resource upgrade to 40.8 Mt @1.40% Li₂O and all classified as Indicated (JORC 2012), resulting from the 2017 drilling campaign at the James Bay Project in Quebec, Canada. This confirms the James Bay project as a world class hard rock lithium asset as the result highlights the grade, quality and scalability of the deposit. Moreover, the Feasibility Study preparation is ongoing and upgrade of resources to reserves is expected in H1 of 2018. Additionally, further drilling for infrastructure sterilization has started, and the mine design and planning work has been awarded to Mining Plus. On the other hand, GXY has signed long term offtake contracts with multiple customers throughout Asia for minimum 200,000 tonnes per annum of lithium concentrate for 5 years. GXY has also agreed for a portion of the Mt Cattlin lithium concentrate sold under the offtake agreements to be converted on Galaxy’s behalf into lithium carbonate and or lithium hydroxide. The detailed agreement regarding this arrangement will be prepared in early 2018. Therefore, GXY will commence selling lithium chemical products to the end-user market in 2018. Meanwhile, GXY stock has risen 81.52% in three months as on December 04, 2017.
 

Lepidico Ltd

Fully funded for the completion of the Phase 1 Plant feasibility study: Lepidico Ltd (ASX: LPD) had completed the Phase 1 L-Max Plant Pre-Feasibility Study in February 2017 and will go for the feasibility study, the engineering for which is on schedule for completion at the end of the 2017 calendar year. The company is fully funded for the completion of the Phase 1 Plant feasibility study. Moreover, LPD has entered into a strategic alliance with Galaxy Resources, which is based on a shared vision for getting significant global opportunity provided by the commercialisation of Lepidico’s L-Max technology. The L-Max process technology uses industry standard equipment and mainstream, low cost chemicals through an innovative flowsheet to produce high quality lithium chemicals, essential for the fabrication of lithium-ion batteries used in electric vehicles and energy storage units. Moreover, LPD is committed to the commercialisation of L-Max through the development of its Phase 1 Plant Project and has planned it to be located in Eastern Canada. This plant is expected to produce approximately 3,000 tonnes per year of lithium carbonate equivalent. The first production is projected for late 2019 and subsequent developments may be up-scaled.

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