A Small Basket of Recommended Lithium Companies

Lithium is not only a taste of the year.
It has high demand for hybrid and electric vehicles, laptops, mobile phones, and will continue to maintain higher demand as technology improves and global consumer demand increases.
The gold report recently spoke to Jon Hykawy, a lithium analyst at Byron Capital Markets.
Jon discussed various factors involved in supporting the lithium and vanadium markets.
He recommended a basket of lithium companies, but he also admitted that the basket was small.
It is still in its early stages, with opportunities for companies and potential investors.
Gold Report: Jon, you are a strong supporter of lithium and from what you told us before, you think it\'s hot. How hot is it?
Jon Hykawy: it\'s getting hot.
What we \'ve seen recently is that there are a lot of deals in the market that seek financing that are being completed.
We are currently making an IPO in Toronto.
An Australian.
Listed company Orocobre Co. , Ltd. (OTCPK:OROCF).
To be precise, the company has just issued a press release suggesting that they will go out and raise $22 million.
There are rumors that we will see their direct neighbors on salar in Argentina go public soon.
We have seen some vacation and cooperation agreements being signed including Toyota Tsusho (OTCPK:TYHOF)
Agreed with Orocobre.
Interest in the industry has never been so great.
TGR: how are these deals so easy to get financing compared to other rare earth deals?
I think part of the reason is that we see so much media attention on electric vehicles.
Actually, I just attended the Geneva motor show.
People in Geneva actually refer to this special event as the electric car show \".
\"I went in at the request of the president of the company to take some photos of new hybrid cars and electric cars.
I realized it was about 10 minutes because I was going to run out of battery so I had to quantify how many flashes I consumed from my phone camera.
Every major car dealer in the world is represented and each of them has a new hybrid car and/or a new pure electric car.
TGR: Will lithium-ion batteries be sustainable in the next two years as potential new technologies enter the market? JH: Absolutely.
Potential new technologies are mainly new iterations of lithium-ion batteries with new chemicals in the cathode and new materials for anode use.
You can greatly improve the lithium battery from here.
Keep in mind that this is a technology that has been developed since the mid-80 th century and has been commercially developed since the late 90 th century.
This is a technology that has a long way to go.
TGR: You mentioned in a research report that you recommend investors to consider a basket of lithium companies.
As far as I know, these are development companies. Are they long-term plays? JH: They are.
Some of them are longer.
Than others.
There is no way to play lithium batteries directly from the existing production, except for Talison Lithium batteries (
Private company currently)
Go to the market;
If they come back for the IPO, if it succeeds.
I don\'t think Talison will play an important role in the battery industry in the view of most investors.
What you are looking for is a lithium development company that can play this role to produce cheap battery grade lithium.
Mainly composed of salt water and clay producers.
We mean the basket.
This is similar to our lithium company in the West (WLCDF. PK)
Rodenia mining companyTSX. V:RM]
And Salares Lithium Battery Corporation. [TSX. V:LIT].
If you don\'t mind, explain the difference between salt water and clay producers.
Salt water producers;
Lithium is usually produced by extracting salt water from dry salt lakes in South America.
Historically, this is still the cheapest way to produce lithium.
Lithium is present in brine in the form of lithium chloride salt.
What you\'re doing is dramatically simplifying it, you\'re basically vaporizing the water that leaves lithium in the salt water, and then treating it to produce a chemically manageable form.
The story of clay producers is completely different.
Western Lithium is one of the companies with very large lithium reserves.
Clay in Nevada is actually close to the northern border of Oregon.
According to their range of studies, they have the ability to produce lithium that is relatively cheap.
It should be very clean lithium, which also reduces the cost of producing an ultra-pure battery class.
We are very positive about this possibility, and we think that the cost of some other salt water companies is relatively low and can also enter the market.
You said before, salt water.
With reference to evaporation, lithium-based supply is active and cannot be produced too quickly.
If the supply is there, in the long run, will it come down to companies that can get to market quickly in terms of stock value?
It has to enter the market relatively quickly and relatively cheaply.
Your biggest problem for any commodity industry is to maintain control over costs.
You have to make sure that you are not one of the companies that fail because of the inevitable price drop hitting the market.
Our basic approach in Byron is to build a model for pure variable costs that we believe are produced from a particular deposit, and then look for potential producers with the lowest cost.
TGR: in Bolivia and Chile, will the potential nationalisation of lithium have a potential impact on the price of lithium?
In fact, it no longer has potential.
Bolivia announced that they will create a national lithium company, and I believe that the mission of the company is to go out and develop Uyuni Salar as a source.
Last year the media hyped Bolivia as Saudi Arabia, which is about to become lithium.
Uyuni Salar is the largest deposit in the world.
I\'m afraid this will be much bigger than most people think.
Our initial lithium report shows that one of the main cost drivers is dissolved magnesium and lithium in brine.
The higher the content of magnesium, the higher the cost of producing lithium, and Uyuni is definitely an excellent source of magnesium.
You will face a big problem in terms of economic development.
We have no shortage of lithium.
What we have is a shortage of cheap lithium, which will come back to bite the Bolivian company.
I just don\'t know how they can develop Uyuni at the current price point.
As far as Chile is concerned, one senator has proposed nationalizing the industry.
The government has recently changed to a more central right-wing government, not a left-wing government.
The party that used to be in power.
I think you will see a more professional
Business and Professional
The mining position taken by the government there.
I don\'t think the nationalisation is a success.
TGR: When you look at companies like Salares in Chile and compare them with Western lithium in Nevada, will you take a place in both sides as an investor
Each risk has a different association.
No one has yet produced commercial quantities of lithium from clay in Nevada or anywhere else.
You must balance the technical risks.
We think this is relatively small because the processing of lithium clay looks very much like the processing of iron ore or magnet ore for vanadium.
This is a process that has been going on commercially for decades.
Balancing the two, I think it would be better for you to find a basket of potential producers with collective low cost.
15% of world output comes from FMC (NYSE:FMC)
It\'s in a place in Argentina called Salar del hormbré Benito.
This is an expensive lithium and it is not produced in a cheap place.
Much more expensive than Atacama.
This leaves considerable room for others to enter and try to occupy 15% of the market share.
It helps to drive the market, doesn\'t it?
That\'s true.
We believe that in the next few years, this is not only the growth of the market as a whole, but also significant;
It has the potential to replace some expensive supplies in the current market.
TGR: how many companies are there in the lithium basket?
We have three names in the report. they are Canadian.
Listed companies.
We haven\'t touched the company.
Take business with Toyota Japan.
This will provide Toyota Tsusho with the ability to purchase 25% of the first project.
This is an important recognition that makes Orocobre a very strong company in this field.
Beyond the Rodinia minerals Salares lithium and Western lithium batteries, we like and have reports based on, plus
A clear candidate list is lithium one (OTC:LITHF).
We don\'t recommend it at this point, but people can check it out.
They will find that lithium is sharing the sound of del Hombre\'s death with the Cuban Women\'s Federation.
When you have a company that will produce 15% of the world\'s lithium in the future, it\'s a good sign that you know you may also have a commercially viable project.
Literally, they\'re just across the street from salar, so it\'s not a close match.
This is the direct neighbor of the same production salar.
It is good to have this proximity in some ways.
In other ways, it\'s not good for them to share the same water.
TGR: Cobalt is a more prominent component of lithiumion battery.
Should we look at a basket of cobalt companies?
BTW: I have to say clearly no, there is a good reason for this. You\'re right.
Cobalt is an important component of the current lithium ion battery.
I know some of the institutional clients that have already been in contact and they tell you that you have to have cobalt and a lot of cobalt, because with the launch of electric vehicles, there will be a huge demand.
But we\'re also familiar with what we \'ve seen on YouTube and TV about battery failures.
The fact is that these batteries occasionally explode and at least catch fire.
This is actually a function, especially the cobalt in these less modern lithium-ion batteries.
The cathode material in the laptop battery actually contains a material called lithium cobalt oxide.
Unfortunately, at the same temperature it reaches when running and/or charging, it can start releasing oxygen.
The release of oxygen is released.
This means that the battery will get hotter.
So you\'re going to get into a vicious cycle, the battery is going to get hot and even release more oxygen.
Before you know it, the battery is very hot, and the pressure inside the battery is also very high.
The battery should be protected by a small device called a thermal resistor.
This can sense the temperature in the battery and, if needed, can cut off the charging of the battery or completely cut off the function of the battery until it cools down.
Sometimes, the thermal resistor does not work.
When there is a fault with the thermal resistor and other safety systems, the battery will burst and you will find a hot battery exposed to oxygen and everything will catch fire.
Automakers decided a long time ago that they would not risk these batteries with little chance of catching fire.
Therefore, they put forward some battery chemicals for the cathode that does not include cobalt.
This will include lithium manganese oxides intended to be used in Chevrolet Volts.
It will also include some lithium polymer designs being studied in Japan, as well as lithium iron phosphate, which is owned by A123 batteries in the United States.
Lithium vanadium phosphate produced by BYD Co. , Ltd. (OTCPK:BYDDF)
There are also studies in China.
All of these chemicals are inherently safe.
None of them have the same potential as lithium cobalt oxide to pop up batteries and cause fires, and none of them contain cobalt.
TGR: Isn\'t that a devastating news for cobalt?
I don\'t think so.
Cobalt companies trade on a large scale by using cobalt in various steel alloys.
With demand in China and other developing regions, steel is still a very high growth area.
If they want to trade on the potential of using cobalt heavily in a car battery, I would say they are unlucky.
Even in devices such as mobile phones and PCs, you may see a decline in the use of cobalt over time.
The analysis we have done shows that on the basis of raw materials, due to the price of cobalt, other materials in phosphate, vanadium phosphate are more expensive, and the magnesium oxide combined with lithium is much cheaper than cobalt oxide.
What is vanadium?
Vanadium: Vanadium is a metal with some very interesting electrical and physical properties.
One strange thing it does is that it dissolves in steel to form an alloy.
At a relatively low level, it can produce very strong construction steel.
It is used to significantly strengthen and improve the quality of steel at a very reasonable price.
However, in 4% or 5% alloys in steel, vanadium actually makes it strong enough to become high-speed tool steel.
So, this will be the cutting bit in the milling machine and something like that.
There is no other material to do this.
People may be familiar with molybdenum as a steel alloy agent.
Before you reach the strength point that even a small amount of vanadium can reach, you have no ability to dissolve molybdenum in steel.
Nb is another material that you can replace, but it has only one --
The third is effective.
So it usually trades about one
Third, the price of vanadium on the market.
Steel use like this accounts for more than 80%, but we believe there are other important uses for construction.
One of these uses is lithium-vanadium phosphate lithium cathode. ion batteries.
Over the past few years, there has been a lot of research showing which cathode material is the most potential lithium battery.
In a lithium battery, what you want is a battery that produces a relatively high voltage, because the voltage is directly equal to the battery\'s power to some extent.
But you also want to produce a battery with a lot of energy.
It can maintain more per charge than standard lithium cobalt oxide batteries.
Fortunately, vanadium phosphate meets these two criteria.
It has a higher voltage. around 4. 7 volts or 4. 8 volts—
Compared to about 3.
Standard batteries are produced today.
It has also increased its energy content by 22%.
If you take it into account, you get a battery that is essentially safe.
It may charge faster because it doesn\'t matter if you heat it up a bit more.
Because it can generate more energy, it will accelerate and have the ability to accelerate faster.
Every time you charge, you will need a distance of 20% to 22%, which is lower than the lithium cobalt oxide battery.
So we\'re pretty excited about this, and these batteries have the potential to get into smaller electronics like laptops, where working life is important.
Another important thing we think is the manufacturing of grid storage technologies like vanadium redox batteries.
These redox batteries are very, very large storage systems.
They will last for years to decades before they fail.
They can store megawatts.
A few hours of energy can generate megawatt power.
In any case, they are not small batteries, about the size of the building containing large batteriesbox store.
They can do something very interesting in winter to support intermittent or less reliable alternative energy generation.
TGR: will you expect it to see a basket of vanadium companies as the use of vanadium changes?
We believe that potential is certain.
One thing you have to realize is that the battery side of the business has not been affected yet.
You don\'t understand technology.
May or may not succeed.
We believe it.
We have incorporated this into our project, but even on the basis of an increase in steel demand, you need more junior vanadium companies.
More vanadium is needed in the world.
TGR: Do you see this happening in the near future? JH: We do.
One of the companies we cover is Largo Resources Ltd . [TSX. V:LGO].
They have a good deposit outside a small town called maracas in Brazil.
In fact, this is the highest level of deposit we have ever seen.
It\'s not the biggest resource we \'ve ever seen, but it\'s important to get it out of the economy.
We believe they have one of the world\'s lower-cost potential vanadium projects.
Their production costs could be around $13 a kilo.
The price of vanadium is never less than $20 per kilogram.
In the last recession we just stepped out of, a large number of vanadium producers closed due to the drop in vanadium to around $30.
The company could have easily pulled through and taken huge market share from other companies.
We believe that they will be put into production soon and are financing the completion of the project for the Maracas project.
TGR: Do you see an increase in demand for this metal, as its only use at the moment is steel?
BTW: no doubt.
Just because of China\'s growth, you will put forward higher requirements for China, because the Chinese ask for better and better construction grades.
So your choice in construction is: use steel that is twice as much as traditional steel at a higher cost, or use vanadium coated steel.
Use less steel structures that are equally sturdy, but there is more room to go inside and you can rent it out to people.
This comes down to an easier choice.
Using higher grade vanadium paint steel, this is the best choice for any building today.
TGR: Is there a supply problem with this metal?
BTW: Unfortunately, there is an unfortunate aspect that may result in a limited use of the battery.
Over the past two years, we have seen the price of vanadium fluctuate between the current levels of $25 or $30, up to $80 or $85 per kilogram.
You can\'t let the material you use heavily in your battery vary by quantity and expect to build a business based on that.
I can give you some specific numbers in this regard.
If you look at the battery of Nissan Leaf and driving it, it\'s a 24-degree battery.
This is a very important capability in terms of energy storage.
It will use lithium carbonate equivalent worth about 20 to 25 kilograms.
The price of lithium carbonate today is about $5,000 per ton.
So you\'re thinking about putting lithium raw materials worth about $100 to $125 into the battery.
The battery is priced at $10,000, which is rather trivial.
If this battery is made using Lithium vanadium phosphate chemistry, it will contain vanadium worth thousands of dollars.
If the price suddenly tripled, its value could rise from vanadium worth $2,000 to vanadium worth $6,000 or $7,000.
Suddenly, the manufacturer of the battery does not see any profit in any sales.
In fact, they may sell the batteries at a loss.
No one will take the risk for a long time.
Regular contracts for these batteries.
If not long-
It will certainly not be used by car manufacturers.
What really meets the requirements of stable pricing is the additional supply on the market.
TGR: Is there a potential project for us to find more vanadium or is this really a supply issue in the world?
I know there are four listed companies in Toronto.
In addition to Largo, there is also a Chinese drama called \"vanadium in China\". TSX. V:SVX]
And energy resources [URST. OB](
Previous uranium star)
There is a project in Ma Island.
There is also a company called Apella Resources Inc. [TSX. V:APA; FWB:NWN].
There are projects, of course, but this is also a question of finding financial deposits.
In the field of vanadium, they are more difficult to obtain than many people because it is a relatively scarce material.
TGR: this information is very rich.
Thank you for your time. Toronto-
Based on Jon Haichuan, he received a doctorate in physics (
University of Manitoba, 1991)and an MBA (
Queen\'s University, 1997)
Prior to his appointment as a lithium analyst in August by Byron Capital Markets, he worked as a clean technology/alternative energy analyst in the capital markets for four years.
Jon started his career in the investment industry in 2000, initially a technical analyst focused on lithium.
Jon has become a valuable resource for everything about light, Silverwhite metal—
From supply and demand to exploration and production.
He has extensive experience in the solar, wind and battery industries and has conducted important research in the field of rechargeable batteries from alkaline to lithium
Ion mobile battery. DISCLOSURE:1)
Ellis Martin, who reports gold, conducted the interview.
He personally and/or her family shared the following companies mentioned in this interview: No 2)
The following companies mentioned in the interview are sponsors of the energy report or the gold report: West lithium
Saras lithium, Inc. 3)
Jon Hykawy does not own any of the stocks mentioned in this article and has not received compensation from any of the companies mentioned.