{"id":108913,"date":"2017-07-12T10:08:10","date_gmt":"2017-07-12T14:08:10","guid":{"rendered":"http:\/\/countingpips.com\/?p=108913"},"modified":"2017-07-12T10:08:10","modified_gmt":"2017-07-12T14:08:10","slug":"lico-energy-metals-lithium-cobalt-junior-on-the-move","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/07\/lico-energy-metals-lithium-cobalt-junior-on-the-move\/","title":{"rendered":"LiCo Energy Metals, Lithium & Cobalt Junior on the Move"},"content":{"rendered":"
July 12, 2017<\/div>
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By<\/strong>\u00a0Peter Epstein, CFA \u00a0 \u00a0epstein.peter4@gmail.com<\/a>\u00a0\u00a0 \u00a0http:\/\/EpsteinResearch.com<\/a><\/span><\/b><\/p>\n

Two months ago I interviewed\u00a0Dwayne Melrose<\/a>,<\/span>\u00a0Director & Chair of the Technical Committee for\u00a0LiCo<\/span>\u00a0Energy Metals\u00a0[TSX<\/span>-V:\u00a0LIC<\/span>\u00a0\/\u00a0OTCQB<\/span>:\u00a0<\/strong>WCTXF]<\/strong>.\u00a0 Since then there has been a number of noteworthy press releases, and the Cobalt price continues to rise.\u00a0 In addition,\u00a0Bearing Lithium\u2019s\u00a017.7% pro forma interest in a\u00a0Chilean\u00a0Maricunga\u00a0project\u00a0(a ~4,400 hectare project valued by the market at about\u00a0C$280 M)<\/em>\u00a0is getting a major mineral resource upgrade this month, and\u00a0a rumor that a Chinese PE firm might acquire up to 20% of\u00a0NYSE: SQM\u00a0sent\u00a0Wealth Minerals\u2019\u00a0shares up ~10% on July 5th. \u00a0<\/span><\/p>\n

Here\u2019s a brief recap of 3 developments at LiCo from just the past 3 weeks\u2026.\u00a0<\/span><\/p>\n

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\u200bAs of June 22nd,\u00a0Greg Reimer\u00a0joined LiCo\u2019s Advisory Board.\u00a0 Greg is EVP of\u00a0BC Hydro\u2019s\u00a0Transmission & Distribution Network. \u00a0BC Hydro is Canada\u2019s 3rd largest Electric Utility with over 4 M customers and $5.7 billion in revenue. \u00a0{See\u00a0press release<\/em><\/a>}<\/p>\n

In a press release dated\u00a0June 28th<\/a>, LiCo announced that, in conjunction with the\u00a0Purickuta project<\/a>,\u00a0it\u2019s opening an exploration & development office in Santiago, Chile.<\/p>\n

On July 5th, positive\u00a0geophysical results<\/a>\u00a0were reported,<\/p>

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\u201cBeneath the surface crust is detected a conductive unit with values of resistivity less than 1 ohm-m, (interpreted as brines) divided into 2 sub units; a high-conductivity saturated unit (0.4 to 0.9 ohm-m) 6.3 to 22 meters thick, and\u00a0<\/em>a\u00a0very high-conductivity saturated unit\u00a0(0.2 to 0.4 ohm-m) detected at two depths, the first under the saline crust with thickness of 3 and 7 m, then again under the unit of high-conductivity\u00a0with a thickness of 100 m, not detecting the floor of this stratum,\u201d<\/em>\u00a0\u00a0(meaning beyond the detective depth capacity of the TEM survey).<\/p>\n

Each of these events is significant in building out key components of the Company, especially the reading of the geophysical results, which suggest full speed ahead on initial drilling.\u00a0Regarding Mr. Reimer, I believe that a senior executive with his green energy credentials choosing LiCo to express optimism on surging Li & Cobalt (\u201cCo\u201c) demand is a meaningful vote of confidence in the Company.<\/p>\n

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Boots on the ground is one thing, some juniors barely have that, but opening an office, \u201cin- country<\/em>\u201d is another thing entirely.\u00a0 For example, in looking at roughly 20 Canadian & Australian-listed Li juniors that have optioned, leased or own Li properties in Argentina, few have in-country offices.\u00a0 Director Melrose\u2019s comment from my earlier interview appear to be accurate,<\/p>\n

\u201cI\u2019ve been impressed at how rapidly we have been able to move the ball forward on our projects.\u00a0 That\u2019s something that attracted me to LiCo Energy, a corporate culture of getting things done and being properly funded to work quickly and efficiently.\u201d<\/em><\/p><\/blockquote>\n

Behind the scenes, discussions continue\u2026.<\/h3>\n

Management, consultants & advisors continue to review lithium & cobalt assets in Canada, Chile & Argentina.<\/p>\n

Did someone say \u201cCobalt?\u201d \u00a0\u201cCanada?\u201d \u00a0Notice last week\u2019s blockbuster news that\u00a0First Cobalt Corp. intends to combine Australia\u2019s\u00a0Cobalt One\u00a0and Vancouver\u2019s\u00a0Cobaltech Mining\u00a0into a pro forma entity with a $160 M market cap.\u00a0 I think this is great news for LiCo\u2019s\u00a0Teledyne project<\/a>.\u00a0 In my mind, this pretty much assures\u00a0cobalt production will be returning to the immediate area,\u00a0an area measured in just thousands of square kms.\u00a0 Talk about close-ology, and on a prolific past producing mine site, with valuable underground mine workings.\u00a0 The only thing better would be if LiCo could lockdown additional property\u2026.. they\u2019re working on that.<\/p>\n

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LiCo was one of the first companies to assemble\u00a0both Li & Co\u00a0assets into a single company, and one of the few willing to take a Li leap into Chile.\u00a0 Next up, how about a first mover to combine Li & Co assets in Chile?\u00a0 Yes, there are discussions being held on that front.<\/p>\n

For more about progress in Chile, I caught up with\u00a0Malcolm Bell, a consultant with over\u00a045 years\u2019 experience either as principal, director, or senior officer of private & public resource companies. \u00a0{see bios<\/a>\u00a0of officers, directors & technical advisors<\/em>}<\/p>\n

Malcolm, I understand that LiCo Energy Metals is keeping you busy, what have you been up to?<\/h3>\n

On LiCo\u2019s behalf I\u2019ve been to Chile 5 times and Argentina twice.\u00a0 Of the two places, Chile seems to have better lithium opportunities at the moment.\u00a0 The salar de Atacama, the Salar itself, not the surrounding desert, is the largest & highest-grade source of lithium brines on the planet, and that\u2019s where LiCo\u2019s flagship project is located.\u00a0 Nearly 40% of the world\u2019s production comes from this single region.<\/p>\n

How about Argentina, are you seeing interesting assets there?<\/h3>\n

Yes, both countries have high-quality assets and reasons to be excited, but the infrastructure in Chile is much better.\u00a0 At the Atacama, I can stay at a 4-5-star hotel that\u2019s a 30-minue\u00a0walk\u00a0from the edge of the salar.\u00a0 There\u2019s a national highway running across LiCo\u2019s concession, plus a natural gas pipeline and power transmission lines nearby.\u00a0 Argentina\u2019s salars, for the most part, are more remote and sit at higher elevations.<\/p>\n

Some investors have questioned the size \/ scale of the\u00a0Purickuta project (160 hectares).\u00a0 Is it too small to be a viable lithium brine operation?<\/h3>\n

It could be too small, but LiCo is actively seeking to expand that footprint.\u00a0 And look, it all depends on brine chemistry, flow rates and extraction \/ processing methodology, among other things.\u00a0 Readers comparing each Li brine junior they come across to say a\u00a0Lithium Americas\u00a0Corp\u00a0(TSX:\u00a0LAC) are probably making a mistake.\u00a0 LiCo need not produce 25,000 Mt of LCE to be a winner.\u00a0 There are many possible roads to viability.<\/p>\n

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LiCo plans to drill a hole in late July or early August to begin the investigation of brine chemistry and flow rate characteristics.\u00a0 If a solid Li grade and flow rate can be determined (no direct evidence of this yet<\/em>) then\u00a0even one production well could potentially lead to a viable business for a company with a market cap of just few thousand tonnes of LCE\/year.\u00a0 However, a production outcome would likely be predicated on the use of an advanced extraction \/ processing solution such as\u00a0Tenova Bateman\u2019s, which hasn\u2019t been proven at commercial scale.<\/p>\n

Why do some investors seem to believe that Li juniors will have a very difficult time in Chile?\u00a0 A more difficult time than in Argentina?<\/h3>\n

I\u2019m not sure why that is, but I take your point.\u00a0 There are, what, about 20 Li juniors in Argentina, but only 4 or 5 in Chile?\u00a0 I think there\u2019s less available property in the (possibly fewer<\/em>) Li sweet spots.\u00a0 There\u2019s a perception of widespread disagreements (legal, tax, royalties, fraud, corruption<\/em>) and uncertainties among SQM, Albemarle \/ (Rockwood), Corfo, etc.\u00a0 But the Rule of Law is strong in Chile.\u00a0 Long-lasting problems attached to these large players are tied to corporate \/ governmental politics of which juniors should be relatively immune.<\/p>\n

Conclusion<\/h3>\n

LiCo Energy Metals\u00a0[TSX<\/span>-V:\u00a0LIC<\/span>\u00a0\/\u00a0OTCQB<\/span>:\u00a0WCTXF]\u00a0<\/span><\/strong>is making impressive moves in Cobalt & Lithium in Canada & Chile.\u00a0 The price of Cobalt continues to rise.\u00a0 Punctuated by First Cobalt\u2019s proposed merger with Cobalt One and Cobaltech, all eyes are on the prime property surrounding the town of Cobalt, Ontario.\u00a0 LiCo\u2019s Teledyne project is in the middle of that fairway and management is pursuing a significant expansion there.\u00a0 In Chile, not only is a substantially larger Li footprint a good possibility, management is carefully considering a few really interesting cobalt prospects.\u00a0 Unlike in Argentina, there are only a few Li juniors to choose from in Chile.\u00a0 LiCo has a lot of bases covered and a lot of discussions underway that could lead to important news in July & August, in Cobalt and Lithium, in Canada and Chile.<\/p>\n

Disclosures: \u00a0The content of this article is for illustrative and informational purposes only.\u00a0 Readers fully understand and agree that\u00a0nothing\u00a0contained herein,\u00a0written\u00a0by Peter Epstein of\u00a0<\/em>Epstein Research<\/a>,\u00a0<\/em>[ER]\u00a0<\/em>including but not limited to, commentary, opinions, views, assumptions, reported facts, estimates, calculations, etc. is to be considered implicit or explicit, investment advice. Further,\u00a0nothing\u00a0contained herein is a recommendation\u00a0or solicitation to buy or sell any security.\u00a0 Mr. Epstein and\u00a0<\/em>[ER]\u00a0are not\u00a0responsible for investment actions taken by the reader.\u00a0 Mr. Epstein and\u00a0<\/em>[ER]\u00a0have never been, and are not currently, a registered or licensed financial advisor or broker\/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and they\u00a0do not\u00a0perform market making activities. Mr. Epstein and\u00a0<\/em>[ER]\u00a0are not\u00a0directly\u00a0employed by any company, group, organization, party or person.\u00a0 Shares of\u00a0<\/i>LiCo Energy Metals\u00a0are highly speculative, not suitable for all investors. Readers understand and agree that investments in small cap stocks\u00a0can result in a 100% loss of invested funds. It is assumed and agreed upon by readers that they consult with their own licensed or registered financial advisors before making investment decisions.<\/em><\/p>\n

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At the time this article was posted, Peter Epstein owned shares in\u00a0<\/em>LiCo Energy Metals\u00a0<\/em>and the Company was an advertiser on<\/em>\u00a0[ER].\u00a0By virtue of ownership of the Company\u2019s shares and it being an advertiser on [ER], Peter Epstein should be considered biased in his views on the Company.<\/em>Readers understand and agree that they must conduct their own research, above and beyond reading this article. While the author believes he\u2019s diligent in screening out companies that are unattractive investment opportunities, he cannot guarantee that his efforts will (or have been) successful.\u00a0Mr. Epstein &\u00a0<\/em>[ER]\u00a0are not responsible for any perceived, or actual, errors including, but not limited to, commentary, opinions, views, assumptions, reported facts & financial calculations, or for the completeness of this article. Mr. Epstein &\u00a0<\/em>[ER]\u00a0are\u00a0not expected or required to subsequently follow or cover events & news, or write about any particular company or topic.\u00a0Mr. Epstein and\u00a0<\/em>[ER]\u00a0are not experts in any company, industry sector or investment topic.<\/em><\/p>\n<\/div>\n

 <\/p>\n<\/div>\n<\/section>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

By\u00a0Peter Epstein, CFA \u00a0 \u00a0epstein.peter4@gmail.com\u00a0\u00a0 \u00a0http:\/\/EpsteinResearch.com Two months ago I interviewed\u00a0Dwayne Melrose,\u00a0Director & Chair of the Technical Committee for\u00a0LiCo\u00a0Energy Metals\u00a0[TSX-V:\u00a0LIC\u00a0\/\u00a0OTCQB:\u00a0WCTXF].\u00a0 Since then there has been a number of noteworthy press releases, and the Cobalt price continues to rise.\u00a0 In addition,\u00a0Bearing Lithium\u2019s\u00a017.7% pro forma interest in a\u00a0Chilean\u00a0Maricunga\u00a0project\u00a0(a ~4,400 hectare project valued by the market at about\u00a0C$280 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-108913","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/108913","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=108913"}],"version-history":[{"count":1,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/108913\/revisions"}],"predecessor-version":[{"id":108914,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/108913\/revisions\/108914"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=108913"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=108913"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=108913"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}