Early adapters of new technologies propelling major economic revolutions are historically the ones that stand to benefit from it the most. The current revolution in lithium-ion batteries powered by expanding electric vehicle markets, and now a potentially robust market for home energy storage systems, has principally benefitted Elon Musk and anyone else who’s been holding Tesla (TSLA) since early 2013. The company’s stock has gained almost 600% since that point.
However, any major market shift is going to create a lot of opportunity. For every Tesla out there that’s skyrocketing in value, there’s also a variety of smaller companies that will be benefitting from all the attention paid to a company like Tesla.
Take, for instance, the market for lithium, something of a key component in lithium-ion batteries. Tesla’s accelerated growth has also created a new market for lithium, one where the players are less familiar. That means that the opportunity for investors is arguably in much stronger shape, with companies offering more value for those ready to do some research.
One company that’s well-positioned to take advantage of this opportunity is Dajin Resources (DJI:CA). With two key Nevada properties, a third in Argentina, and access to new technology that could both improve time to market and reduce costs, Dajin is poised to become a major lithium player just as the market is taking off.
Equities.com talked with Brian Findlay, President and CEO of Dajin, about the exciting time for lithium and why Dajin is in such a strong position to seize the opportunity.
EQ: At the moment, with Elon Musk and his plans for the Gigafactory, there's a lot of talks surrounding lithium ion batteries. How does this sort of intense interest affect commodities markets in ways that maybe a lot of people haven’t entirely anticipated?
Brian Findlay: Lithium ion batteries have been around for the better part of 15 years now, and every year the demand has been increasing. A lot of people aren’t aware of the fact that the interest in the lithium market goes hand in hand with the oil and gas market. I think Elon Musk is anticipating a huge increase in the price of fuel in the near future, which, in turn, is going to turn into a substantial increase in the demand for lithium.
You look at the size of the factory Elon Musk is planning and it's a true indication of the potential for this market. Lithium ion batteries are going to create a revolution in how the energy is supplied for the home and automotive industry, and we want to be part of it. We’ve got a large land holding in Nevada, we've got a huge land holding in Argentina, and we're looking at future opportunities as well.
I think lithium is going to be a household name in the very near future. Everybody that has a cellphone, a laptop, any electronic device; they're all going to be powered by lithium ion batteries. Elon Musk is taking advantage of this opportunity, and I understand, from what I’ve been reading recently, that he's expanding out into applications involving solar power, storing energy from solar panels in batteries at a residential level. Even the aircraft and boating industry right now have lithium ion batteries as backup power sources. So there’s a lot of opportunity out there.
EQ: Why don’t you talk a little bit about Teels Marsh and Alkali Lake exploration programs. What is it about Nevada that makes these properties so attractive for Dajin?
Brian Findlay: Teels Marsh was the first project we took on in Nevada. It had some prior land disputes, and it's never been properly explored for lithium. Originally, Francis “Borax” Smith was there in the 1870s with the 20 Mule Team Borax company processing boron at the eastern side of the property.
Our area of interest is right in the center of the property. We recently completed a gravity survey which indicated a depth of the basin to be over 8,000 feet with the potential for the presence of lithium. We’ll also be doing 3D seismic testing and hopefully setting up a drill program later this year. If we get the results we are looking for we plan on utilizing new technology so we don’t use huge evaporation ponds like they have over in Clayton Valley with the Rockwood Lithium Mine. With new technology we expect to recover the lithium within 24 to 48 hours where evaporation ponds can take two years from when they take the brine fluid out of the ground.
Moving on to Alkali Lake, this is an opportunity that came to us just 7 miles northeast of Clayton Valley. Different valley, but it has the same geological structure, same characteristics you need for a lithium brine project. It has the hot springs that run the hot fluids into these valleys. I think we’re going to get some good results out of that area, too. It’s really well located because most of these properties require a lot of energy to process the brine, and, of course, Clayton Valley already has the power located there, so it's not going to be an issue.
EQ: Is Tesla sourcing raw materials primarily from within North America.
Brian Findlay: You're 100% correct. Musk is going to be looking for all of his supply to come from North America. The only producing lithium brine facility in North America right now is in Clayton Valley, so one would expect Tesla is going to be looking for other sources of lithium in Nevada. Obviously, it's close by, and Nevada is, by far, one of the easiest locations in the world to actually move forward with the permitting process necessary to put a mine into production.
One thing about brine is that, from start to finish, quite often you’ll be in production in half the amount of time it takes to put a hard rock into production. Also, the cost of building a brine facility is much less then constructing a hard rock mine. You’ll get lithium and, quite often, you'll get potash and boron as by-products whereas, with hard rock, you're pretty limited just to the lithium.
EQ: I understand there is a third property in Argentina in what’s known as the lithium triangle.
Brian Findlay: The lithium triangle is primarily in Chile, Bolivia, and Argentina, with 75% to 80% of known lithium resources in that area. Right now, Chile, through the Atacama Desert, produces roughly 40% with Australia’s the second biggest producer. A small amount right is produced in Argentina. Bolivia’s grade is low and there's a lot of impurities in the lithium that make it very hard to process. I think our property is probably one of the largest, undeveloped potential lithium brine properties in Argentina. We have control over 100,000 hectares, In the Salinas Grandes Salar in Jujuy Province. We went in there about eight years ago and started on the project, but then the government changed the rules and regulations and we're still proceeding to complete the permitting process.
We recently, at a meeting at PDAC in Toronto spoke with the top mining executive for the Argentina and he said he's going to try to assist us to move forward. We’ve been talking with the provincial governments, and we’re generally getting a positive response. In the meantime, we’ve been keeping in touch with all the local communities trying to work out a program to move forward. They're always looking for foreign capital to come into the country to help develop their resources.
EQ: What should investors be on the lookout for from Dajin in the next 6 to 12 months?
Brian Findlay: Our main focus will be to move forward with the Teels Marsh project. It’s well located in Nevada, got huge upside potential due to its depth that we've recently been able to identify with the gravity survey. We’ll be drilling there, hopefully, by the end of the year. Then, running in parallel with that, we'll be running a gravity survey across the Alkali Lake Project.
There’s also a few other projects that we're looking at. We’ve got a lot interest from third parties wanting to get involved with us as it appears the demand for lithium is going to continue to grow here in the near future. The price of oil appears to have bottomed out last month as it's back up to about $60 a barrel. When the price at the pump starts moving up, people are going to be looking for the alternative, which is going to be the electric powered vehicles. That is going to put greater pressure on the lithium ion factories and, I’m sure, Mr. Musk is going to be very happy.
EQ: Any additional closing comments?
Brian Findlay: I believe we are at the beginning of a technical revolution that will change the worlds reliability on fossil fuels to clean reliable power generated by products utilizing lithium. Electric vehicles will be able to travel greater distances on quicker charges, in many cases on charges from their residence.
Everybody that has an interest in the lithium sector should follow it closely because it's really changing on a day by day basis.
Lithium will be the source of energy to power our future.
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