Six companies leveraging the Lithium Boom

Altura Mining Ltd


AJM Details

Raising capital to strengthen balance sheet: Altura Mining Ltd (ASX: AJM) has announced that it has agreed to terms and executed the Native Title Agreement (NTA) with the Njamal people with regard to the Altura’s 100% owned Pilgangoora Lithium Project. The company also reported for settlement of $20 million share placement as per the recent capital raising initiative. Further key updates for the project include Definitive Feasibility Study (DFS) process design being awarded to DRA Pacific Pty Ltd, identification of 8 prospective lithium target areas within existing tenement package and achievement of 4 tonnes of mineralised core for process flow optimisation testwork. In addition, AJM is conducting a Share Purchase Plan (SPP) to raise almost $3m.
 

Pilgangoora FS Project Details (Source: Company Reports)
 
The Pilgangoora FS Project with a mineral resource estimate of 35.7mt @ 1.05% Li₂O and ore reserve estimate of 18.47mt @ 1.07% Li₂O would start production from Q3 2017. AJM stock rose 227.27% in the six months (as of July 06, 2016). Still, the company is one of the cheapest lithium producers with reserves in excess of 25 MT (yielding approximately 310,000 tonnes of lithium oxide) at its flagship mine in Western Australia and accordingly we maintain our “Buy” recommendation on the stock at the current price of  $0.185
 

AJM Daily Chart (Source: Thomson Reuters)
 
Pilbara Minerals Ltd


PLS Details

Offtake agreement and acquisition of Pilgangoora Tantalum-Lithium Project: Pilbara Minerals Ltd (ASX: PLS) recently provided the update on the binding offtake agreement (for supply of 140,000tpa of 6% chemical grade spodumene concentrate from PLS for an initial 6-year period), subscription agreement and MOU (for evaluation and development of future offshore spodumene conversion plant) for the downstream processing JV wherein PLS reported that the counter party is General Lithium Corporation and the companies are viewing the partnership as beneficial for the stakeholders at the back of the demand from the electric transport and renewable energy storage industries. PLS had recently finished the acquisition of Pilgangoora Tantalum - Lithium project from Global Advanced Metals Wodgina Pty Ltd (GAMW). Accordingly, the group partnered with Lithium Australia to assess its low cost processing technology for lithium carbonate production. Meanwhile, PLS is on track to get July Resource upgrade as latest drilling at Pilgangoora delivered two new significant standalone discoveries at the South Eastern Pegmatite and the Western Domain leading to major widths of high-grade mineralization from the first seven holes. Later this year further drilling would be undertaken at these new discoveries.
 

Pilgangoora project schedule (Source: Company Reports)
 
PLS is also targeting Pilgangoora project construction from December 2016 and targeting commissioning December 2017. EBITDA over the first 5 years of operations will be approximately A$120M per annum. PLS recently also undertook the issue of 3,185,572 ordinary fully paid shares. The stock has delivered 115.25% return in six months (as of July 06, 2016). Based on the foregoing, we maintain our “Buy” recommendation on the stock at the current price of  $0.625
 

PLS Daily Chart (Source: Thomson Reuters)
 
Lithium Australia NL


LIT Details

Positive prospects: Lithium Australia NL (ASX: LIT) has reported for expansion of greenbushes interest with the recent grant of three exploration licenses in July 2016. This provides more access to the target structural trend from Donnybrook to Bridgetown. The company also recently earned 25% interest in the Electra Project JV; and as per an update from Alix Resources, lithium-bearing, clay-rich sedimentary assemblage over 1.1 km distance has been identified while the results are comparable Bacanora /REM Buenavista concession. LIT earlier announced for identification of lithium with values as high as 246 parts per million (ppm) lithium at the Electra Project Mexico.
 

Granted tenure in Greenbushes (Source: Company Reports)
 
Meanwhile, LIT and ANSTO Minerals are investigating the suitability of LIT’s Sileach^TM process to produce high-value lithium carbonate and the pilot testing of Pilgangoora and other concentrates would start in the near future. Moreover, LIT is acquiring the lithium rights in relation to the E63/1722 and 1733 from USH for which LIT would issue 9 million fully paid ordinary shares to USH in consideration for acquiring the lithium rights (subject to the regulatory approvals). Additionally, Western Australia’s Department of Mines and Petroleum granted approval for initial preparatory site works by LIT on the Company’s wholly owned Ravensthorpe project. LIT stock rose 65.63% in the last six months (as of July 06, 2016) and still, we give a “Speculative Buy” recommendation on the stock at the current price of $0.27
 

LIT Daily Chart (Source: Thomson Reuters)
 
Orocobre Limited


ORE Details

Tincalayu plant production on schedule: Orocobre Limited (ASX: ORE) has upgraded the Borax Argentina borax decahydrate plant at Tincalayu and the full production of 100 tpd is expected to be achieved by September 2016 from the 30tpd. The Olaroz Lithium Facility was said to reach the 3000 tonnes of lithium carbonate production in June 2016.
 

Olaroz Expansion (source: Company Reports)
 
Meanwhile, ORE stock already rose 87.80% in the last six months (as of July 06, 2016) and we believe that the stock is currently trading at higher valuations. We give an “Expensive” recommendation on the stock at the current price of $4.44
 

ORE Daily Chart (Source: Thomson Reuters)
 
Galaxy Resources Ltd


GXY Details

Merger proposal with General Mining: Galaxy Resources Limited (ASX: GXY) made an off market takeover offer to General Mining Corp to form Australia’s second largest lithium company. Under the offer, General Mining shareholders are offered 1.65 new Galaxy shares for every 1 General Mining share. After merger, General Mining Shareholders would own approximately 29% of the Merged Entity.
 

Galaxy has both Brine & Hard Rock Assets (Source: Company Reports)
 
The offer is closing on July 29, 2016. Merged company will have Mt Cattlin production, along with the development of the Sal de Vida brine project in Argentina and James Bay hard rock project in Quebec in Canada. Meanwhile, currently 4.94% of General Mining shares have entered into pre-bid acceptance agreements. We maintain our “Hold” recommendation on the stock at the current price of $0.50
 

GXY Daily Chart (Source: Thomson Reuters)
 
Capital Mining Ltd


CMY Details

Lithium Project Update: Capital Mining Ltd (ASX: CMY) has fallen 16.67% in the last six months (as at July 06, 2016). With regard to the company’s Chakola project, the planning for the next phase of exploration has begun with identification of a polymetallic deposit at the Harnett Prospect that demonstrated the presence of significant gold and base metal mineralization. Further, there has been an extension of due diligence at the Shaw River portfolio of lithium projects in the Pilbara region of Western Australia for a full and complete assessment. CMY earlier announced for identification of outcropping pegmatites at the Shaw River portfolio within the proposed portfolio of lithium-prospective assets in the Pilbara region of Western Australia. CMY is also actively looking at additional project opportunities to complement the Shaw River and Wolfhound acquisitions. We believe that CMY is yet to demonstrate potential in terms of lithium mining and exploration, and looks “Expensive” at the current price of $0.005
 

CMY Daily Chart (Source: Thomson Reuters)

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