Lithium Co. With New Project Adds Industry Luminary as Advisor

Right on the heels of acquiring a 100%-interest in a new lithium salar project in Argentina, American Salars Lithium Inc. (USLI:CSE) announced it is adding David Guerrero, who has more than two decades of experience in the international mining industry, to its advisory board.

Guerrero spent 15 of those years in roles specifically related to lithium, the company noted. He held roles at major Rio Tinto, was an advisor for Lithium X (which was acquired for CA$265 million), and had a functional role in a major M&A transaction involving Australia's Galaxy Resources (now Arcadium Lithium).

Most recently, he was the country manager for Alpha Lithium Corp. when it sold for CA$330 million last December to TechEnergy Lithium Canada Inc., a subsidiary of Tecpetrol Investments S.L., billionaire Paolo Rocca’s steel and energy group. As the former president of the Salta Mining Providers Chamber and AUSCHAM Argentina's vice president, Guerrero also has local knowledge of Argentina's northern region.

He "brings a tremendous wealth of experience in the lithium sector and has substantial knowledge of the Argentina mining industry," said American Salars Chief Executive Officer and Director Nick Horsley. "This significantly strengthens our operations and access to M&A opportunities."

American Salars announced its agreement to acquire 100%-interest in the Pocitos 1 lithium salar project earlier this month. 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). The company also has an NI 43-101 compliant inferred lithium resource of 457,000 tonnes LCE at its Candela II project on the Incahuasi Salar.

The MRE is for 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 both combined blocks, 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 has said.

Stock 'Suddenly Came to Life,' Analyst Says

Technical Analyst Clive Maund said 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 wrote on June 17. "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.

Technical Analyst Clive Maund said the stock was a Strong Buy "for both fundamental and technical reasons."

"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."

Since Maund wrote about it, the stock has held tight, going up 6.67%.

American Salars is focused on lithium projects in North and South America, with projects in Argentina, the United States, and Canada.  Its primary focus is the expansion and development of its Argentina-based 3,000-ha Candela II Lithium Brine Project.

The company plans to start a new drilling program at Pocitos when the permits are issued by the Salta Mines Department.

The Catalyst: China Dominates Important Market

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. 

However, "according to traders familiar with the matter, manufacturers grappling with slowing EV demand growth have been cutting orders for lithium products, in anticipation that they may soon be able to restock inventories at even lower prices," Yvonne Yue Li and Annie Lee wrote for Bloomberg.

"Still, some traders said they see limited downside in prices, which have already been squeezing the margins of some higher-cost producers. Contracts in Guangzhou for July are the cheapest on offer, suggesting a bottoming out during summer," they wrote.

Fastmarkets reported a consensus among market analysts pointing to a recovery in lithium prices in the fourth quarter of 2024.

"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 28.8 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$6.5 million. It trades in a 52-week range of CA$0.45 and CA$0.11.

Important Disclosures:

1. 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.
2. 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. 
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
4.  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 17, 2024

1. 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. 
2. 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.