When you first heard that Elon Musk was manufacturing battery-powered cars, did you invest? If you had the foresight you could have been sitting alongside some of the world’s wealthiest investors and it would have given you the opportunity to grab hold of one of the fastest growing industries in the world! Elon Musk’s name is synonymous with alternative energy & investing and has created major opportunity in an industry that until recently, has not gotten the attention it deserves! Elon Musk could have told you that one of the best ways to build wealth is to get in on the ground floor, of a new technology.
His business Tesla has now begun to drive huge progress in an industry that could soon be witnessing a boom of its own and as with most investments, the market is looking to find the answer to the question…
“What will this next ground floor opportunity be?”
Right now, some of the biggest banks and analysts are targeting a “New Gasoline.” The market may have found something that fits that description. In-fact, the strategists at Goldman Sachs have coined this term for the emergence of an energy source that could one day power the entire world!
What is this “New Gasoline”? Lithium.
Liberty One Lithium (LRTTF)
Could be the Next Ground Floor Opportunity Set to Create the Next Batch of Energy Billionaires!
According to banks like Credit Suisse, demand for lithium could surpass supply in 2020 by 25%. At that point, the world is expected to need over 380,000 tons of lithium (reported as lithium carbonate equivalent or “LCE”). Considering the demand number was about 190,000 tons in 2014, that’s a jaw-dropping 100% growth in demand over a six-year period. Much of that growth will come from lithium batteries.
In our opinion, ignoring lithium could be a very costly idea for any smart investor. Goldman Sachs has called lithium “The New Gasoline” for a reason and we don’t think this term is thrown about loosely, by one of the world’s largest investment banks. After all, oil has been the most important commodity in the world for over a century, could lithium be next?
We could be in the midst of a lithium revolution versus fossil fuel powered vehicles. Even with the price of oil, many countries are focused on cutting carbon emissions and using clean energy as a matter of policy, regardless of oil price. Electric cars have already taken the market by storm and with companies like Audi, BMW, Mercedes, Lexus, Volkswagen, and others either producing electric cars or in the process of developing them. This doesn’t even include tech giants like Apple and Google entering the space, which could re-shape the automotive industry even further.
Citi-Research projects the global lithium battery market to be $40 billion by 2020. That’s a 10-year growth rate of more than 250%.
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And let’s not forget the major developments that industry leader, Tesla has begun to make. The build out of the company’s GigaFactory has now created a gigantic ripple effect across the industry. Since the landscape has been previously dominated by a few larger lithium producers, Tesla has come out to say directly that it is targeting early stage, higher risk companies that could offer access to an alternative supply.
Elon Musk, visionary co-founder and CEO of Tesla, has indicated that he seeks a lithium supply to fill enough batteries to power 500,000 of the company’s EVs per year by 2020…just do the math…that’s no small sum and no small pace considering we’re talking a 3-year period!
Another big source of demand could also come from electricity storage. The holy grail of renewable electricity is batteries that are inexpensive but can also hold enough to overcome the regularity of solar and wind power. Again, Tesla is working to be at the forefront of this and recently announced it will start installing “Powerwall” battery packs in American and Australian homes to store solar energy, at a cost of $3,000. Enel, an Italian utility, is also launching similar storage products in South Africa, where homes and businesses suffer frequent black-outs.
According to market research firm IHS Markit, lithium-ion batteries represent the fastest-growing form of energy storage and will be a part of about 80% of storage installations by 2025. Because of the spectacular energy density afforded by the lightweight metal, there is nothing likely on the near-term horizon as a substitute for lithium-powered batteries in terms of economic utility. In other words, lithium is essential, and could be set to continue to grow in importance for the foreseeable future.
Liberty One Lithium (LRTTF)
Could be positioned to command attention of investors especially considering the timing of both industry growth and corporate events. Where depleting natural resources vital for lithium production (like water for instance) in previously popular locations like Nevada, many juniors are scrambling to find new ground to break. (LRTTF) has found itself at the cross-roads of what could become one of the US’s up and coming lithium bearing regions and it’s just a few hundred miles away from Tesla’s GigaFactory; an epicenter for lithium demand!
(LRTTF)’s initial prospect located in Utah’s Paradox Basin, which has historically been a source of high grade lithium-bearing oilfield brines. Previous oil & gas exploration offers historic data and attractive re-entry economics utilizing existing exploration wells. But this is just the surface of why now could be the time to be paying close attention to (LRTTF).
According to data collected by Benchmark Mineral Intelligence, the price of lithium carbonate so far as of 2016 figures is 47% higher than last 2015’s average. And in anticipation of this growth, (LRTTF) has not only strategically targeted areas capable of real lithium production with favorable climate conditions, but management has also taken strong steps to account for this growth. (LRTTF) has undertaken a multi-million-dollar capital raise that will be used to fund the exploration of the recently acquired Paradox North Property.
(LRTTF) has also just submitted National Instrument 43-101 compliant technical report for the Paradox North Property…this may seem like just words to someone not familiar with the industry but these two things alone are critical to the future success of any company in this space, let alone (LRTTF)!
Why is This Important?
It’s all about timing and transparency in our opinion. This NI43-101 report leaves very little doubt for investors because the requirements made requiring producers to file is specifically designed to make sure that no misleading or fraudulent info relating to the properties is given to investors. This isn’t just some mining company with targets, they’ve specifically put their money where their mouth is and once the report is filed, (LRTTF) will reveal their hand.
Timing is key, in our opinion, not only because of the submission of this report but also for the fact that once the company reveals the results, a positive outcome could be a massive catalyst. And again, those on the ground floor that speculate on a positive outcome will have had a huge advantage once the mainstream catches on; remember that part about the next batch of energy billionaires?
As the first battery cells roll off the production line at Tesla’s 1.9m sq. ft. GigaFactory, a scramble is under way to secure supply of the lithium, which is their key ingredient. The Liberty One Lithium “North Paradox” property consists of 233 placer claims encompassing 4,480 acres. And the history of this property that was originally thought to be a “nuisance” has revealed that this location could be prime for lithium production.
During oil and gas exploration there were several blow-outs caused by the intersection of brines under significant pressure within the Paradox unit. These brines were initially considered a nuisance to drilling but were found to often be super-saturated brines containing high amounts of potash, sodium chloride, magnesium chloride, lithium, bromine, boron and other potentially payable minerals.
Only a few holes were drilled specifically to test these brines and all supported the conclusion that these brines could be an economically important resource. The (LRTTF) property could potentially produce from both the brines and from solution mining of the potash beds.
Though there are currently no N.I. 43-101 compliant resources or reserves at the (LRTTF) property, there are numerous oil and gas test wells in the project area that define the presence of a very large tonnage of potash in several beds underlying the area. One 1964 letter suggests that there may be 9 million tons of potassium oxide under the White Cloud area, (LRTTF)’s area of interest in just one of the several identified beds!
All arrows could be pointing to huge potential for (LRTTF) and the ground floor could be here and now for those expecting a big move for lithium. Multiple sources suggest that the best is yet to come for lithium stocks and 2017 could mark a major tipping point.
The U.S. Geological Survey recognizes the dramatic cliff we’re standing on right now, noting: “Lithium supply security has become a top priority for technology companies in the United States and Asia.”
Lithium stocks have led the market for the past two years—and this year has been cited as being “the real break-out year where pretty much everyone is expecting a dramatic run on Lithium stocks,” according to reports from OilPrice.com.
“The lithium feeding frenzy has only just begun, and right now we’re staring down the mouth of the most lucrative commodity we’ve seen in a very long time. And while the Lithium oligopoly is already dead for all intents and purposes, the real value is in the juniors making new Lithium discoveries.”
-James Stafford of Oilprice.com
Investors and analysts are finally taking note of lithium as demand is expected to systematically outstrip supply in a few years, according to brokers at Macquarie Research. According to the broker’s estimates, in 2019 demand for Lithium will be 239,000 tons while supply will struggle to match, at 233,000. In 2020, demand will be 260,000 and supply only 237,000, while in 2021 demand could be 283,000 and demand still 237,000.
And like many of the lithium breakouts of years past, (LRTTF) could be set for a similar course already seen by many of the Canadian lithium stocks. This time, the average US investor can have a clear shot at taking advantage of this incredible growth opportunity. Just look at some of the biggest moves in Canadian lithium producers:
|Company||Price Move||Percentage Increase|
|Millennial Lithium Corp||$0.15 to $2.45||1,533%|
|Standard Lithium||$0.30 to $1.25||317%|
|Advantage Lithium Corp.||$0.35 to $1.34||283%|
|Albemarle Corporation||$45 to $106||136%|
|Sociedad Química y Minera de Chile S.A||$15 to $34||127%|
No matter how low or how high the price of these stocks were, those investors who made sure to pay close attention to these companies BEFORE major milestone were made, had an opportunity to cash-out in a big way. Those who took advantage of small cap lithium opportunities saw some of the largest percentage increases to the tune of OVER 1,500%!
At current levels, (LRTTF) could be presenting massive potential of its own for U.S. investors looking for an opportunity to get in on the action. Not only has the company focused on proper capitalization but they’ve also targeted a region that could be abundant in reserves.
The industry economics on a basic level could already be pointing to major move coming for lithium. This could have all the signs of an emerging metals bull market, including tight supply and surging demand. Specifically, for (LRTTF), certainly the completion of its NI 43-101 report could be a key catalyst for those who look for phase 2 breakouts.
But again, if and when (LRTTF)’s report reveals positive information, it could be those that are looking at this company at the ground floor who will be able to take advantage full advantage of any aggressive move in this emerging lithium stock. Which side will you be on?