After massive moves in Lithium (“Li”) juniors last year, will history repeat? Who knows, there will be big winners in 2017, but far fewer. Investors learned a lot about which stories have a chance and which likely don’t. For example, if one is invested in an Esmeralda County, Nevada (host of the Clayton Valley basin) Li play, it might be time to take a closer look. Why? The superpower in the area, Albemarle Corp., [NYSE: ALB] believes it has a senior claim on ALL water rights in the basin.
Water rights and/or lack of scale will be the downfall of dozens of hopefuls in western States. This is also true (for the same and other reasons) in many jurisdictions of Canada, Australia & Argentina (“ARG”). Investors looking for good ideas should pay particular attention to ARG. For some, that might mean development-stage companies like Lithium Americas [TSX: LAC]which owns 45.75% of a very strong project, Cauchari-Olaroz, (along with 45.75% partner SQM [NYSE: SQM]) in Jujuy Province. Or, ASX-listed Galaxy Resources [ASX: GXY], owner of the very promising Sal de Vida project on the western side of the Salar del Hombre Muerto.
Cheap valuation, world-class team, sizable Li brine option in Argentina
I’m looking for juniors with cheap valuations PLUS 1) strong management, 2) access to capital and 3) potential projects of scale. NRG Metals Inc. [TSX-V: NGZ] [OTC: GPOFF ] stands out for its valuation (2nd lowest market cap of 15 ARG Li juniors I track) Note: {Valuation is more important than ever. Dozens of Li stocks are up hundreds or thousand(s) of percent, even after meaningful pullbacks from 52-week highs}. NRG has a world-class management / technical team, and has gained control (through a low-cost option) of nearly 30,000 ha in the Salar de Carachi Pampa.
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