American Salars Lithium Inc. (USLI:CSE) announced it has entered into an agreement to acquire a 100%-interest in the Pocitos 1 lithium salar project in Argentina.
The project, which consists of 800 hectares (ha) near the town of Pocitos, has a National Instrument 43-101 Mineral Resource Estimate (MRE) from December of 2023 consisting of an Inferred 760,000 tonnes lithium carbonate equivalent (LCE).
"We are excited to add the Pocitos 1 lithium salar project to our Argentina lithium portfolio," said Chief Executive Officer and Director Nick Horsley. "We now control both the Candela II lithium salar project with an inferred LCE of 457,000 tonnes and the Pocitos 1 project."
The MRE is contained in the Pocitos 1 block (800 Ha) in combination with the neighboring Pocitos 2 block (532 ha). All of the drilling that makes up the basis of the MRE, on the combined Pocitos 1 and Pocitos, occurred on the Pocitos 1 block being acquired by American Salars in the agreement with Recharge Resources Ltd.
"We look forward to working with our technical team to update the NI 43-101 mineral resource estimate to reflect our Pocitos 1 concession, which represents approximately 60% of the combined ground used in the existing mineral resource estimate and hosts all of the drilling to date," Horsley said.
"This is clearly a major positive development for the company," Maund wrote of the Pocitos 1 acquisition. "The conclusion is that American Salars is on course to break out to new highs soon."
Building a 'War Chest' of Assets
American Salars is focused on lithium projects in North and South America, with projects in Argentina, the United States, and Canada. The company's primary focus is the expansion and development of its Argentina-based 3,000-ha Candela II Lithium Brine Project which hosts an inferred NI 43-101 457,000 tonnes LCE resource open for expansion.
Horsley had recently told Streetwise Reports that the company was looking at other projects in Argentina. "The plan is building a war chest of world-class lithium assets," he said.
Technical Analyst Clive Maund told Streetwise Reports that the stock was a Strong Buy "for both fundamental and technical reasons."
The highest lithium value tested at Pocitos was 169 parts per million (ppm) at a depth of 363 meters, American Salars said.
The company also said a geophysics survey discovered a large area to the west with a resistivity of 0.4Ω.m and a depth of more than 1 kilometer.
A pilot plant achieved 94.9% extraction efficiency with brines at an average lithium concentration of 86 ppm lithium, of which 80.76 ppm was recovered, the company noted.
Recharge Resources announced last month that it had completed its environmental baseline assessment report that will be used for a production environmental impact assessment at the project, a key step toward development and potential production at Pocitos 1.
American Salars said it will start a new drilling program when the permits are issued by the Salta Mines Department.
Analyst: Stock a 'Strong Buy'
Technical Analyst Clive Maund told Streetwise Reports that the stock was a Strong Buy "for both fundamental and technical reasons."
"After a massive speculative runup in 2020 and especially in 2021, the lithium price fell victim to a severe bear market that ran from mid-2022 through the end of 2023," Maund continued. "By the end of last year, this bear market had exhausted itself, and a basing process began that has continued up to the present."
American Salars' stock was "dormant" from September through late February, marking out a low base with almost no trading, Maund noted.
"But in March, it suddenly came to life, blasting higher on strong volume to double in price
in a matter of a few days," Maund wrote. "However, since that early March surge, it has meandered around in a rather erratic manner, dropping back hard during the second half of April and early May to successfully test the support shown at the breakout point."
The "recurrent heavy upside volume since early March is also bullish," Maund said. "This is a powerful indication that the stock is destined to break out above the resistance to clear new highs soon, despite the dip of the past week or so."
The Catalyst: An 'Electric' Opportunity
China dominates the lithium market, which is projected to grow from US$2.5 billion in 2023 to US$6.4 billion by 2028 at a compound annual growth rate (CAGR) of 20.4% from 2023 to 2028, according to a report by Markets and Markets.
The consensus among market analysts points to a recovery in lithium prices in the fourth quarter of 2024, Fastmarkets reported.
Streetwise Ownership Overview*
American Salars Lithium Inc. (USLI:CSE)
"This optimism is grounded in expectations of increased activity . . . to meet end of year targets, strong battery production seen in March and April finally filtering through upstream and low inventory levels necessitating restocking," the website noted.
Katusa Research predicted the lithium market could have a major breakout this year, citing its use in EVs and storage batteries as key drivers.
"The opportunity in lithium is more electric than ever," Katusa wrote.
Ownership and Share Structure
American Salars said it has 24.83 million shares outstanding and 5.5 million warrants, according to the company.
As for insiders, the CEO Horsley owns about 1.83 million, or about 7.37%, with 4666,666 warrants. Strategic investor Hillcrest Merchant Partners owns 1 million shares or 4.03%. There are no institutional investors, and the rest is retail.
Its market cap is CA$5.89 million. It trades in a 52-week range of CA$0.45 and CA$0.11.
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Important Disclosures:
- American Salars Lithium Inc. has a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000.
- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of American Salars Lithium Inc.
- Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
- This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.
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* Disclosure for the quote from the Clive Maund source June 4, 2024
- For the quote (sourced on June 4, 2024), the Company has paid Street Smart, an affiliate of Streetwise Reports, US$1,500 in addition to the monthly consulting fee.
- Author Certification and Compensation: [Clive Maund of clivemaund.com] is being compensated as an independent contractor by Street Smart, an affiliate of Streetwise Reports, for writing the article quoted. Maund received his UK Technical Analysts’ Diploma in 1989. The recommendations and opinions expressed in the article accurately reflect the personal, independent, and objective views of the author regarding any and all of the designated securities discussed. No part of the compensation received by the author was, is, or will be directly or indirectly related to the specific recommendations or views expressed.
Clivemaund.com Disclosures
The quoted article represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks cannot be only be construed as a recommendation or solicitation to buy and sell securities.
