RM: Winner Takes All

JON HYKAWY, Byron Capital Markets (05/31/2010)
"Final Phase II auger drill results from Salar de Diablillos show better than expected lithium levels of 868 mg/l, but Mg:Li levels that are higher than previously reported, averaging 3.98. K levels are strong at 9,300 mg/l and SO4:Li ratios are acceptable at 5.3.. . .At conventional levels of porosity within the region, this amounts to many decades worth of brine. . .The company continues to follow a strong QA/QC model, heavily using standards, blanks and duplicates. This plus the use of casings and pumping at intervals allows us to have good faith in the numbers being produced. . .We believe the data produced here, coupled to data previously obtained in Clayton Valley, easily support the company ultimately producing perhaps 18,000 tons per year of Li2CO3, the majority being produced from Argentine brine. Costs for the two are perhaps $1,500 per ton in Nevada, due to very good chemistry, and $1,900 per ton in Argentina due to the higher Mg:Li ratio measured in this program. . .We reiterate that being the sole claimant on Salar de Diablillos is a major positive factor in this story. While the Phase II program showed higher levels of Mg, we would argue that risk has been reduced as the present 30-hole program has outlined what is likely a large, economic resource in Argentina."

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