December 6th, 2021 | 12:36 CET
Standard Lithium, Triumph Gold, American Lithium, Alpha Lithium - Is lithium the new gold?
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"[...] Both the geology and the infrastructure around the project make for a very attractive cost structure. We expect to be able to produce at 50% of the current gold price. [...]" Bill Guy, Chairman, Theta Gold Mines Limited
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Standard Lithium - A new major investor puts USD 100 million on the table
Standard Lithium has smoothed out the short attack from a dubious report from Blue Orca Capital. According to the claims of the short-sellers, the pilot plant in southern Arkansas was not running as smoothly as Standard Lithium was presenting it to the authorities. The shares of the lithium company plummeted by 20% at the end of November. But now, the tide seems to be turning in favor of the shareholders.
There is again strong interest from new major investors. In addition to two very promising lithium projects in the US state of Arkansas, it is above all Standard Lithium's unique extraction technology that is attracting more prominent investors. After the German chemical group and MDAX stock Lanxess already took a stake in July, the US conglomerate Koch Industries, with annual sales of USD 150 billion, is now also getting involved in Standard. Its investment subsidiary Koch Investment Group is buying new shares in Standard Lithium for USD 100 million. As if that were not enough, the two companies also intend to cooperate operationally.
Due to Koch's investment in Standard Lithium, Lanxess is under pressure and must now decide promptly whether the investment and the cooperation with Standard Lithium will become something more. It is now getting uncomfortable for the short-sellers at Standard Lithium, who had attracted many like-minded people to their side with half-silent reporting. Because the new investors of the Koch Group probably see it entirely differently and come with deep pockets. They have scrutinized Standard's technology in detail as part of a due diligence process - and came to a positive conclusion. The share has run a bit hot after the erratic movements, so wait for a further 25% cooling as a cautious investor.
Triumph Gold - The flagship project in the Yukon area delivers
No lithium stock, but a very promising gold investment presents itself with Triumph Gold, an explorer originating from Canada, which focuses on some properties in the Yukon Territory. The Company's 100%-owned Freegold Mountain flagship project is accessible by a well-graded road. It is located in the Dawson Range copper-gold belt and hosts three mineral deposits (Nucleus, Revenue and Tinta Hill) to Canadian NI 43-101 standards.
Current drilling has been ongoing since late June, and now there was new news in early December. Triumph Gold has completed an additional 897 meters of diamond drilling in three holes on the Blue Sky Zone (BSZ). The best result was an intersection over a length of 106.5 meters with a mineralization of 0.76 grams per tonne gold equivalent (AuEq). Drilling encountered multiple styles of mineralization, including porphyry style stockwork veins, disseminated sulphides, sulphide breccias and epithermal veins.
A total of 46% of the 2021/22 diamond drill program has been completed to date. Further updates will be announced in a timely manner as results become final for the Nucleus deposit, Big Creek South fault zone, Orbit zone and regional exploration activities. The total exploration budget for 2021 is CAD 2.75 million.
Newmont Mining, the world's largest gold producer, is already a well-known shareholder of Triumph Gold and operates its Coffee Creek project in the immediate vicinity. In 2021, Triumph secured the Big Creek property, which is expected to host gold and industrially recoverable copper. With a share price of CAD 0.12, the market capitalization is currently a low CAD 16.5 million - a real Yukon bargain during the current tax loss season.
American vs Alpha Lithium - Sound barrier of 1 billion exceeded
Two other lithium companies are currently making the news, American and Alpha Lithium. Both companies have exceeded the market capitalization of CAD 1 billion in November.
American Lithium is a TSX Venture 50 index member exploring lithium and uranium properties in Nevada and southeastern Peru. All projects are still in the pre-feasibility study (PEA) stage, but indications exist of lithium-bearing clay rocks in Nevada. The state is known for its lithium deposits. Tesla's gigafactory is also located in Sparks, NV. Lithium-ion batteries for electric cars and battery packs for stationary power storage are produced there in cooperation with the Japanese electronics company Panasonic.
Alpha Lithium relies on a team of experienced industry experts to focus on the development of the Tolillar and Hombre Muerto Salar areas in Argentina. Tolillar is one of Argentina's last undeveloped lithium salars, covering 27,500 hectares and adjacent to billion-dollar lithium companies in the heart of the well-known lithium triangle. At Hombre Muerto, the Company continues to expand its 5,000+ hectare base in one of the highest grade and longest producing lithium salars in the world. Other companies in the area producing from the lithium salar include Orocobre, Galaxy Lithium, Livent, Gangfeng and Posco.
American and Alpha Lithium's projects are still in the early stages. However, the stock market currently gives the companies valuations in the billions. Millennial Lithium has already been acquired for just under USD 400 million. The last chart formations of the discussed companies show interesting top formations, and there are already initial 25% corrections. Should this train start rolling, this has only been the first small downside. Therefore, look at the charts of the hydrogen companies since February 2021 for comparison. There was already a shortfall of 80% from the top at its peak.
In the current hype phase, the stock market is willing to pay historical prices for climate protection, e-mobility and battery raw materials. Whether this will continue in 2022 is another matter. But if gold is rediscovered, Triumph Gold is likely to experience a significant price premium.
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