"The history of Eureka lies in its future." - Lambert Molinelli, 1878


The author/editor of the Eureka Miner owns common shares of local mining stocks, General Moly (GMO) and Newmont Mining (NEM); together with benchmark miner Freeport-McMoRan (FCX). Please do your own research, markets can turn on you faster than a feral cat.

Wednesday, April 14, 2010

The Future Comes to Big Smoky - More Lithium in Northern Nevada

*** BREAKING NEWS *** Barrick Gold Corporation welcomed today a U.S. District Court April 13 decision that mining operations can continue at its Cortez Hills Mine

Morning Miners!

It is 6:04 AM and the coffee's hot, pardner. There are few things I enjoy more than receiving a hot tip from one of our faithful readers. Since last September, the Report has been covering an exciting story on how emerging battery technologies may become very important to our state and county through the mining of lithium, vanadium and silver. The demand for these metals will grow as more and more electric and electric hybrid vehicles pass through our town and the roadways of America. In the coming years they will complement and not replace fossil fuel powered transportation as our country moves to greater energy security. Farther down the road the electrics may dominate the transportation landscape, at least for family and light-haul applications. Transportation will not be the only benefactor; futuristic batteries are expected to dot the landscape storing electricity from wind and solar farms for large capacity, power grid applications.

The speed of this transition has a lot to do with the development of lighter, smaller and more affordable batteries for transportation and more practical storage devices for large scale use. The Report gave an overview of both small and large battery technologies last November, What's in a Battery for Eureka County?. We'll close with a complete list of articles on this developing story.

Fortunately for the mining community, exotic chemistries for futuristic batteries translate to greater demand for metals such as lithium, vanadium and silver - all of which are abundant in our state. To date, lithium has probably attracted much attention from all corners of the global investment community; from billionaire investor Warren Buffet to South Korean steel producer POSCO (Buffet Wants More POSCO, Both Want Lithium).

As previously reported, a low cost source of lithium is available in Kings Valley of nearby Humboldt County. Western Lithium (TSX-V:WLC) is currently developing that site for open pit mining of lithium carbonate. This "clay" extraction approach is an alternative to the more common "brine" technique where lithium is produced by pumping salty water out of dry salt lakes in South America and our own Clayton Valley just west of Goldfield, Nevada.

There is another player seeking lithium in our state. Li3 Energy, Inc. has acquired properties near the Clayton Valley and, most recently, lithium assets in the Big Smoky:

"[Li3 Energy] has acquired a 100% interest in 170,000 acres of a strategically located property prospective for lithium brine, located in Big Smoky Valley near Tonopah, Nevada. The Property shares similar geology to Clayton Valley, which lies a few miles south and contains Rockwood Holdings' Silver Peak Mine, one of the world's leading producers of lithium hydroxide, and currently the only producing lithium mine in the United States of America." (MARKETWIRE, 3/12/2010)

You can read the entire press release on your break:

Li3 Energy Closes Acquisition of Next Lithium Assets at Big Smoky Valley, Nevada (MARKETWIRE, 3/12/2010)

And here's their website:

Li3 Energy, Inc.

Presently Li3 (OTCBB:LIEG) is listed on the OTCBB, an "over the counter" securities market often used by start-up mining companies in the preliminary stages of exploration and acquisition. Western Lithium (TSX-V:WLC) is listed on the Toronto Venture Exchange which serves a similar purpose. As successful mining companies grow to the development/production stage, they typically transition to the larger equity exchanges (e.g. NASDAQ) with more stringent listing requirements. Yesterday LIEG closed at $0.79/share, here is their 3-month chart:

Presently, the ole Colonel does not own shares of either WLC or LIEG but both companies are on my watch list. Potential high rewards travel with high risks, please do your own homework before investing buckaroos!

Below is a complete list of articles by this Report on emerging battery technologies and the related mining important to our State and County:

The Next Big Thing in Northern Nevada (The Eureka Miner's Market Report, 9/28/2009)

A Big Step into the Future for Eureka County (The Eureka Miner's Market Report, 10/23/2009)

A Silver Lining for the Silver State? (The Eureka Miner's Market Report, 11/16/2009)

What's in a Battery for Eureka County? (The Eureka Miner's Market Report, 11/23/2009)

More News on US Gold & Western Lithium (The Eureka Miner's Market Report, 01/12/2010)

Buffet Wants More POSCO, Both Want Lithium (The Eureka Miner's Market Report, 03/19/2010)

Western Lithium, Gold, Silver, Copper & Oil (The Eureka Miner's Market Report, 03/12/2010)

A Third Tank on Our Hill? Lithium & Vanadium Update (The Eureka Miner's Market Report, 03/22/2010)

Enough talk, let's walk the walk:

4-WD is OFF - smoother markets return; the VIX or "fear index" is in the 15-16s far below 25 which is good; metals & miners are good with benchmark FCX comfortably above $74, 10-year Treasurys are below 4% preserving a low-interest rate environment (what's this?)

The YELLOW light is switched back on our fuel gauge with oil above $80

An ORANGE light is ON for possible adverse regulation/legislation: Miner's claim fee, Miner taxation, Cortez Hills & mercury emissions

Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)

NYMEX/COMEX: Oil is up $1.53 in early trading to $85.58 (May contract, most active); Gold is up $7.0 to $1160.4 (June contract, most active); Silver is up $0.231 to $18.480 (May contract); Copper is up $0.0125 to $3.6130 (May contract); Western Molybdenum Oxide sits at $17.50, LME moly 3-month & 15-month seller's contracts remain at $18.60

The DOW is up 54.26 points to 11073.68; the S&P 500 is up 7.51 to 1204.81. The miners are up except for Newmont:

Barrick (ABX) $40.76 up 0.82%
Newmont (NEM) $53.68 down 0.19%
US Gold UXG) $3.20 up 2.89%
General Moly (Eureka Moly, LLC) (GMO) $3.66 up 2.52%
Thompson Creek (TC) $13.85 up 1.47%
Freeport-McMoRan (FCX) $85.88 up 1.31% (a bellwether mining stock spanning copper, gols & molybdenum)

The Steels are happy, (a "tell" for General Moly & Thompson Creek):

ArcelorMittal (MT) $46.62 up 2.08% - global steel producer
POSCO (PKX) $121.25 up 1.46% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is up 1.41% to $1,449,121.91 (what's this?).


Colonel Possum

Write Colonel Possum at colonelpossum@gmail.com for answers to your questions or to request e-mail updates on the market

Headline photograph by Mariana Titus

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