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November 23, 2024

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LiCo Energy Metals (LIC.V) is a raging multi-headed beast

There’s a dude in our building who is an award-winning biochemist, novelist, journalist, triathlon athlete and a professional musician.

If you ask him what’s up – you get bombarded with competing narratives.

So it is with LiCo Energy Metals (LIC.V) – a company so vibrant and eclectic in its ambitions – that the brain jams up trying to unpack it.

Companies with a single mantra (make-cell-phones; find-gold; sell-cars) are easier to market than multi-headed beasts.

To be fair: LiCo Energy is playing in a single sandbox.

From the company website:

“The Company’s focus is directed towards exploration for high value metals integral to the manufacture of lithium ion batteries.”

It’s just that LiCo’s sandbox is that it has five different toys in it.

And they’re all shiny.

Here’s the Coles Notes on LiCo’s five exploration properties:

  1. Glencore Bucke Cobalt Project, Cobalt, Ontario: signed agreement to acquire a 100% interest in the 16.2 hectares Glencore Bucke Property, 6 km from Cobalt, Ontario. Two delineated two zones of mineralization measure 150 meters and 70 meters in length.
  2. Teledyne Cobalt Project, Cobalt, Ontario: option to earn 100% ownership in the Teledyne Project located near Cobalt, Ontario. Adjacent to the Agaunico Mine which produced 4.3 million pounds of cobalt and 980,000 ounces of silver. Agaunico’s economic mineral structures extend onto LiCo’s property.
  3. Purickuta Lithium Project, Chile: located within famed 3,000 square kilometer Salar de Atacama salt flat – home to 35% of the global Lithium production. The salar possesses mega-high grade lithium (1,840mg/l) and Potassium (22,630mg/l). LiCo’s 160 hectare property is right in the thick of the action, surrounded by the big players
  4. Dixie Valley Lithium Project, Nevada: option to acquire a 100% interest on a large lithium exploration project at the Humboldt Salt Marsh in Dixie Valley, Nevada. The geologic setting is similar to producing lithium brine deposits at Clayton Valley, Nevada.
  5. Black Rock Desert Lithium Project, Nevada: option to acquire a 70% interest in the Black Rock Desert Lithium Project that consists of 128 placer claims (1,036 hectares) in southwest Black Rock Desert, Washoe County, Nevada.

Before we get into LiCo’s latest acquisition – a quick refresher to recently re-awoken coma victims: lithium and cobalt are key ingredients in electric vehicles.  Sales of EVs are expected to increase from 650,000 in 2017 to about 7 million a year in the next decade.

Lithium is a growth story in the same way that the Pacific Ocean is a body of water.

It’s big, and it’s not going away.

News has been streaming out of LiCo like a Game of Thrones BitTorrent.

On September 13, 2017 LiCo filed a NI-43-101technical report for its Glencore Bucke Project. The recent purchase agreement with Glencore Canada (GLEN.L) includes a back-in provision, production royalty and an off-take agreement.

September 12, 2017 LiCo announced plans to start Phase 1 diamond drilling on its Teledyne and Glencore Bucke cobalt properties.

A 1,500 meter diamond drill program will begin in the third week in September.

The history of this project is worth noting.

In 1981, Teledyne Canada Ltd. leased the Glencore Bucke and then completed and extensive diamond drill program that delineated two zones of mineralization measuring 150 meters and 70 meters in length.

The 2017 drill program is intended to confirm results from historical drilling completed by Teledyne Canada, while drilling step-out holes to expand the mineralized zones.

Drilling is also planned for the adjacent Teledyne Cobalt Property where historical drilling revealed cobalt/silver mineralization extending from the boundary of the Agaunico Mine.

In 1979, Teledyne completed 6 diamond drill holes totaling 1,280 meters. A year later the company built a 700 meter long production decline to reach the encountered mineralization.

A total of 22 underground diamond drill holes totaling 1,880 meters were completed. Both the surface and underground drilling programs unearthed significant cobalt mineralization along a 152 meter strike length  kicking out from the Agaunico Mine onto the Teledyne Cobalt Property.

That would’ve been a good day’s work – but there’s more:

The drill program revealed a second zone with a strike length of 137 meters, including .64% cobalt over 16.9 meters and .74% cobalt over 8.7 meters.

LiCo intends to confirm results from the historical drilling, expand the mineralized zones, and test some under-explored structures.

The drilling will be conducted as part of LiCo’s flow through financing.

“We are very excited and looking forward to the milestone event of the commencement of the diamond drill program on these properties,” states Tim Fernback, LiCo’s President & CEO, “Acquiring the Glencore Bucke Property from Glencore and adding it to our land package significantly adds more potential to LiCo’s Cobalt properties.”

In public statement, Fernback has pointed out that the purchase agreement gives LiCo a green light to expand one of Glencore’s key Canadian cobalt assets.

“If all goes as planned, we could be selling all our cobalt produced back to Glencore in the future,” stated Fernback, “If it is a property sale, we have also found a significant future customer.”

As we mentioned earlier, LiCo’s Ontario asset is one of the five roaring heads of this battery material company.

The Purickuta Lithium Project in Chile is of extreme interest.

Chile has dominated lithium production for decades.  It is a mature mining jurisdiction. Chile produces about 30% of the world’s copper. The resource industry drive the national economy. The Atacama salt flat has the largest and highest-quality proven reserves.

Isolation, scarce rainfall and lithium-rich brines keep Chile’s production costs low. Chile has favourable rankings of ease-of-doing-business, levels of corruption, and the quality of its legal system.

The reality is, you could spin LiCo Energy into six different companies and make a 20 page power-point on each project.

We like risk-diversification and we like ambition. Stick this one on your watch list and keep an eye on the news-flow – because it’s fast and furious.

Yesterday, I ran into my Renaissance man in the elevator.

I asked him about his summer vacation.

“Vacation”, he replied, “What’s that?”

Full Disclosure:  LiCo Energy Metals in an Equity Guru marketing client.  We are also investors.

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