Co. Anticipates Lithium Rally, Looks at Acquiring New Canadian Assets

Source: Streetwise Reports 10/18/2024

American Salars Lithium Inc. (USLI:CSE; USLIF:OTC; Z3P:FWB; A3E2NY:WKN) says it is strategically reviewing multiple Canadian mineral properties prospective for lithium. Prices for the metal important to the energy transition have fallen, but many analysts say they will recover.

American Salars Lithium Inc. (USLI:CSE; USLIF:OTC; Z3P:FWB; A3E2NY:WKN) announced it is strategically reviewing multiple Canadian mineral properties prospective for lithium close to recent pegmatite, or hard-rock, lithium discoveries.

The first project under review is about 150 kilometers north of Matagami, where there is a small town with a rail link to much of James Bay, and has the Billy Diamond Highway running through it.

American Salars said it’s close to Q2 Metals Corp. (QTWOTSX-V; OTCQB:QUEXF) Cisco Lithium Project, which reported drill intercepts of 215.6 meters at 1.69% Li2O, including 64.6 meters at 2.29%. Also nearby are multiple projects owned by Sayona Mining Ltd (SYA:ASX), which is currently Canada’s only lithium producer.

“Our primary objective remains the acquisition of low-cost lithium brine assets in Argentina while expanding our existing NI 43-101 lithium brine resources,” said Chief Executive Officer and Director R. Nick Horsley. “We believe that Quebec-based hard rock lithium assets can now be acquired at deeply discounted prices and advanced with critical mineral flow through financing incentives in anticipation of the next lithium rally.”

American Salars said it is reviewing additional projects close to Sayona, which will be subject to disclosure “once due diligence is completed and a deal is completed.” The company stressed that its “intent to acquire property and current strategic review does not necessarily mean that a transaction will occur.”

Current Assets Also in Argentina, Nevada

The company’s existing portfolio of lithium deposits includes two NI 43-101-compliant Inferred Mineral Resource Estimates (MREs) consisting of 457,000 tonnes of lithium carbonate equivalent (LCE) at the Candela 2 Lithium Brine Project and a shared MRE at the Pocitos 1 Lithium Brine Project consisting of 760,000 tonnes LCE. The Pocitos MRE is shared with the neighboring Pocitos 2 property, which is not under contract or owned by American Salars, but the company noted that none of the drilling that makes up a partial basis for the MRE took place on the Pocitos 2 block. Both brine projects are located in Salta Province, Argentina.

Major mining company Rio Tino recently invested in Argentina by acquiring Argentina lithium producer Arcadium Lithium for US$6.7 billion, making the company the world’s third-largest lithium producer.

American Salars recently released assay results from soil samples collected during its Phase 1 exploration program at its 100%-owned Black Rock South lithium project close to Tesla’s Gigafactory in Nevada.

Technical Analyst Clive Maund wrote that the entire “San Emidio Desert basin is a highly prospective lithium exploration zone and is about 38 kilometers long and up to 11 kilometers wide at the widest point, with the central playa measuring about 8.5 kilometers north-south and 4.5 kilometers east-west.”

Out of 38 samples, 33 recorded lithium concentration of more than 100 parts per million (ppm) or higher, the company said. The highest grade was 180.5 ppm with an average grade of 131 ppm across the 33 samples of the surface of the property.

Technical Analyst Clive Maund wrote that the entire “San Emidio Desert basin is a highly prospective lithium exploration zone and is about 38 kilometers long and up to 11 kilometers wide at the widest point, with the central playa measuring about 8.5 kilometers north-south and 4.5 kilometers east-west.”*

“After a massive speculative runup in 2020 and especially in 2021, the lithium price fell victim to a severe bear market that ran from mid-2022 through the end of 2023,” Maund continued. “By the end of last year, this bear market had exhausted itself, and a basing process began that has continued up to the present.”

In addition to its location near the Gigafactory, Black Rock South is 93 miles southwest of Thacker and 215 miles northwest of the United States’ only producing lithium mine, the Silver Peak lithium brine mine owned by Albermarle.

The Catalyst: More Growth Coming

Lithium is critical in the energy transition for its use in batteries for EVs and other applications. It also is used in electronics, medicine and other industries.

According to a report by Grand View Research, market size for the metal was estimated at US$31.75 billion last year and is projected to grow at a compound annual growth rate (CAGR) of 17.7% from this year through 2030.

“The automotive application segment is expected to witness substantial growth, driven by stringent regulations imposed by government bodies on ICE automakers to reduce carbon dioxide emissions from vehicles,” researchers at Grand View said. “This has shifted the interest of automakers toward producing EVs, which is anticipated to benefit the demand for lithium and related products.”

EVs and battery storage primarily will fuel future growth of the lithium market, Marin Katusa of Katusa Research wrote recently. He pointed out that all major electric vehicle batteries require lithium, about 1.55 pounds per kilowatt hour of battery capacity, on average.

“I think the data speaks for itself that there’s more growth and opportunity on the horizon,” Katusa wrote.

According to FastMarkets, prices for the metal have fallen over the past 18 months as weaker demand improved availability. However, this “has done little to deter the appetite for expansion,” raw battery materials analyst Jordan Roberts told the publication.[OWNERSHIP_CHART-11095]

The consensus among market analysts points to a recovery in lithium prices in the fourth quarter of 2024, Fastmarkets reported.

“This optimism is grounded in expectations of increased activity . . . to meet end of year targets, strong battery production seen in March and April finally filtering through upstream and low inventory levels necessitating restocking,” the website noted.

Ownership and Share Structure

American Salars said it has 28.8 million shares outstanding and 5.5 million warrants, according to the company.

As for insiders, the CEO Horsley owns about 1.83 million, or about 7.37%, with 4666,666 warrants. Strategic investor Hillcrest Merchant Partners owns 1 million shares or 4.03%. There are no institutional investors, and the rest is retail.

Its market cap is CA$4.79 million. It trades in a 52-week range of CA$0.45 and CA$0.08.

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Important Disclosures:

1. American Salars Lithium Inc. has a consulting relationship with Street Smart an affiliate of Streetwise Reports. Street Smart Clients pay a monthly consulting fee between US$8,000 and US$20,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of American Salars Lithium Inc.
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
4. This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.

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* Disclosure for the quote from the Clive Maund source June 17, 2024

1. For the quote (sourced on June 17, 2024), the Company has paid Street Smart, an affiliate of Streetwise Reports, US$1,500.
2. Author Certification and Compensation: [Clive Maund of clivemaund.com] is being compensated as an independent contractor by Street Smart, an affiliate of Streetwise Reports, for writing the article quoted. Maund received his UK Technical Analysts’ Diploma in 1989. The recommendations and opinions expressed in the article accurately reflect the personal, independent, and objective views of the author regarding any and all of the designated securities discussed. No part of the compensation received by the author was, is, or will be directly or indirectly related to the specific recommendations or views expressed.

Clivemaund.com Disclosures

The quoted article represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund’s opinions are his own, and are not a recommendation or an offer to buy or sell securities. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund’s opinions on the market and stocks cannot be only be construed as a recommendation or solicitation to buy and sell securities.

( Companies Mentioned: USLI:CSE; USLIF:OTC; Z3P:FWB; A3E2NY:WKN, )