Lithium Co. Finds Grades up to 180 PPM at Nevada Project

American Salars Lithium Inc. (USLI:CSE) announced assay results from soil samples collected during the Phase 1 exploration program at its 100%-owned Black Rock South lithium project close to Tesla's Gigafactory in Nevada.

Out of 38 samples, 33 recorded lithium concentration of more than 100 parts per million (ppm) or higher, the company said.

The highest grade was 180.5 ppm with an average grade of 131 ppm across the 33 samples of the surface of the property, which is 72 miles north of the Gigafactory.

"The results of our Phase 1 exploration program returned significant lithium values," said Chief Executive Officer and Director R. Nick Horsley. "We are now planning a Phase 2 program to further expand on this discovery and complement our established and growing lithium resources in Argentina. The company is actively engaged in M&A for strategic opportunities and holds a strong belief in the recovery of the lithium commodity price. The current lithium carbonate price is attractive for brine projects and a real challenge for our hard rock competitors.”

In a release, the company noted that the "assay results reveal a northeast trend of anomalous lithium that could represent a lithium brine at depth."

The 38 samples were collected at a spacing of about 300 meters, according to the results from ALS Geochemistry Laboratory in Reno, Nevada. Prospecting sample assays taken on other areas of the salar were received and will be studied internally, the company said.

Technical Analyst Clive Maund told Streetwise Reports that the stock was a Strong Buy "for both fundamental and technical reasons."

Technical Analyst Clive Maund told Streetwise Reports that the stock was a Strong Buy "for both fundamental and technical reasons."*

"The entire San Emidio Desert basin is a highly prospective lithium exploration zone and is about 38 kilometers long and up to 11 kilometers wide at the widest point, with the central playa measuring about 8.5 kilometers north-south and 4.5 kilometers east-west," he said.

"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."

The Catalyst: No Energy Transition Without It

An important part of the energy transition as an important element in electric vehicle (EV) batteries and energy storage systems, it is also used to strengthen alloys and as a high-temperature lubricant.

According to FastMarkets, prices for the metal have fallen over the past 18 months amid weaker demand improved availability. Shares of Albemarle Corp. (ALB:NYSE), the world's largest producer, hit record lows this week.

However, this "has done little to deter the appetite for expansion," raw battery materials analyst Jordan Roberts told FastMarkets. Jiangxi Ganfeng Lithium Co. Ltd. (GNENF:OTCMKTS; 002460:CH) (one of the world's largest lithium producers) "has started production at a 50,000 tonnes lithium carbonate plant in the Hebei province and another plant with 50,000 tonnes of capacity is due to come online in the fourth quarter of 2024," he said.

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

"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.

Companies continue to search for Western sources of the metal as China dominates the 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. 

Projects in North, South America

In addition to its location near the Gigafactory, American Salars Lithium's Black Rock South project is 93 miles southwest of Thacker Pass and 215 miles northwest of the United States' only producing lithium mine, the Silver Peak lithium brine mine owned by Albermarle.

"The claims cover a conceptual target for lithium brines, which is very similar to the published geology of the Clayton Valley lithium brine production area approximately 200 miles to the southeast," American Salars said in a release. "The concept is consistent with generally accepted data and theories about the formation of lithium brine resources. The target area is lithium — brines hosted in basin-fill sediments."

American Salars is focused on lithium projects in North and South America, with projects in Argentina, the United States, and Canada.

American Salars announced its agreement to acquire 100%-interest in the Pocitos 1 lithium salar project last 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), which will need to be updated as 40% of it covers the neighboring Pocitos 2 block.

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.

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$4.47 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. 

For additional disclosures, please click here.

* 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.