As lithium’s use in electronics ranging from tablets to batteries for hybrid vehicles expands the super-conductive element is and will likely continue to be in high demand. With demand for lithium growing, wise companies involved in the exploration for and production of lithium are aggressively working to take advantage of the phenomenon. The industry is currently dominated by a couple of large producers, but there are several earlier stage companies like Western Lithium USA Corp. (OTC:WLCDF, TO:WLC), Li3 Energy Inc. (OTC:LIEG) and AmeriLithium Corp. (OTC:AMEL) that have very interesting prospects.
AmeriLithium’s potential is especially intriguing. AMEL is an exploration stage company that has holdings in disparate locations like Nevada, Alberta and Australia. Well positioned to capitalize on the growing need for lithium, AMEL is also investigating the prospect of gold on its Australian property. Headquartered in Nevada, AmeriLithium has one of the largest North American lithium portfolios in the industry with nearly 700,000 acres of Nevada properties located in and around the Clayton Valley, home to the only producing lithium company in the U.S. AMEL is proceeding with its Nevada drilling program after carefully reviewing the result of a recent Gravity and CSMAT Geophysical Surveys. With permits expected to be finalized in the coming weeks, the company is looking to identify the potentially large lithium resources suggested by those surveys.
Lithium, from the Greek word “lithos”, is a soft, silver-white metal which is very light and highly conductive. Identified by the symbol Li and the atomic number 3, prices for the metal have tripled since 2000 in a market reportedly worth $1 billion a year and still growing. As a result of varied and newly innovative uses for lithium, the increasing demand for the element and growth for the industry will continue. The fact is that manufacturers of items like Apple’s iPad and the Toyota Prius hybrid electric-gasoline car have few alternatives to consider in the pursuit of greater performance and mobility.
Analysts have forecast lithium demand to double by 2020, which would match the growth from 2000 to 2011. The cause of such abundant growth is the simple reality that a typical lithium cell can generate more electricity than competing cells such as lead-acid. And unlike lead acid, lithium production from brine often utilizes the natural processes of solar and wind evaporation. As ideal a source of energy as it is, and despite lithium reserves existing across the globe, lithium production is not common to all regions.
Lithium is also just as well suited for use in alternative energies, and as such, adoption of lithium is somewhat of a reaction to fossil fuel dependency. Some analysis suggests that lithium demand growth of more than 10% per year will persist, thanks in part for demands for batteries. Lithium prices are also expected to continue to rise, in line with previous increases. Prices reportedly tripled from $2,000 per metric ton to $6,000 per metric ton between 2000 and 2011. Few expect this pace of growth to abate thanks to consistently increasing demand.
To that end, AMEL is determined to finalize, with the assistance of its strategic partner Strategic Resource Management Pty Ltd., exploration on its Australian lithium and gold property. The geophysical study of the three held by AMEL within the Katanning Greenstone Belt in Western Australia indicated geology that is consistent with Ausgold Limited’s nearby 5-million-ounce Katanning gold discovery. In particular, AmeriLithium’s Bare Rocks license block is considered highly prospective due to a series of structural features that appear to be relatively unique for the Katanning area.
The company stated that the joint venture with Strategic Resource Management enabled it to explore the Australian holdings to determine its viability before committing to its development. And since the study suggests possible gold mineralization the company is preparing to move forward with its 2012 drilling program to better determine the potential for gold and lithium.
The discovery of either, but preferably both, provides a level of diversification that increases the company’s prospects and its appeal as an investment. 13 viable exploration-drilling targets identified by Core Geophysics of Perth Australia include four targets in the Normans Lake block featuring possible granitic intrusions, six targets in the Bare Rocks block featuring geophysical signatures similar to the Katanning discovery and three targets in the Hoffman Hills block.
AmeriLithium could also benefit from a number of incentives for domestic producers granted by the U.S. government. In one case the government has set aside $2 billion worth of loans, grants and tax credits to develop large-scale lithium-ion battery production for the domestic hybrid vehicle marketplace. This is in addition to a $2.4 billion tax credit for battery plants. As such, AmeriLithium Corporation represents a great ground floor investment opportunity. With its Australian prospects, North American reserves, and the ability to benefit from U.S. subsidies, AmeriLithium presents an intriguing, early-stage investment opportunity.
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