Schaeffer writes up Lithium X (LIX.V), market does what market does

Lithium market maker Lithium-X (LIX.V) got the big write up by oil and gas guru Keith Schaefer in CEO.CA today, in which he said of the company, “The race is on, and Lithium X is ahead.”

The market, as expected when Schaefer puts his shoulder behind something, reacted as expected, sending the stock up $0.07 to $1.98 in midday trading.

Schaefer likes LIX.V because:

  • [The company] took a big step to being The Next Big Lithium Producer with a deal last week to get a pilot plant operating at their Sal de Los Angeles property in Argentina.
  • The plant is expected to cost only US$9.3 million to build. The new partner, a technical consortium known as SESA, will earn its 50% stake by contributing US$6 million.
  • Even forecasts that use conservative assumptions around electric cars and exclude power storage completely still see lithium demand tripling within a decade.
  • There are few assets in the world that people really need; but new lithium mines are one of them. That’s why these junior lithium stocks are running so hard.

These are all good reasons to like LIX. The bigger one, for most either into the story or playing it daily, is who is attached to the company, and the likelihood they’ll build something quantifiably large.

The LIX fever has spread hard. I had two calls this morning from companies diving into lithium assets, and everyone thinks theirs will be ace. I’m only involved in one at present – little Resolve Ventures (RSV.V), which sits snuggled up to the southwest corner of LIX’s Nevada property.

But right now a sniff of brine is all you need to propel a stock hard upwards.

I won’t say it’s exactly like the weed rush of 2014, but it’s pretty darn close. Then, companies were jumping the fence into weed left and right, with nary an idea of what they might do with it should they ever be allowed to grow it. Most never got that far.

The lithiumistas at least have a decent notion that there’s a demand for the lithium, and that they face less regulatory problems than the weed guys if they want to actually build a business out of it some day.

The big question is, are we at peak lithium craze? Is there still room to jump? Or is the trough of reality coming?

— Chris Parry

http://www.twitter.com/chrisparry

 

Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.

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