Liberty One Lithium (LBY:CA): A Well-Funded Emerging Lithium Exploration Company
May 15, 2017
•6 min read
The price of lithium has risen threefold in the past two years because of the growing demand for electric cars and battery-powered devices. The appeal of lithium ion is its ability to hold a positive charge in compact space, meaning batteries require less material and can charge more rapidly than other alternatives. Morningstar analysts predict that lithium demand will rise 16% annually over the next decade, which would make it the fastest-growing commodity over the past century.
The Company believes that global resources are the key to a robust energy A key catalyst for the lithium market is the desire for countries worldwide to reduce carbon emissions. The Paris Agreement was intended to signal the end of fossil fuels as the primary means of economic growth. The 200 countries that ratified the deal are now searching for ways to affect peaking greenhouse gases. Electric vehicles, which depend on lithium-ion batteries, will be a main driver in this shift. It’s why Goldman Sachs called the light metal “the new gasoline.”
While Tesla (TSLA) and its “Gigafactory” get all the attention in the EV space, it isn’t the only player making big moves. Around the world, production factories are opening up to address the impending demand. China, as an example, is expanding its EV sector to reduce carbon emissions, which when coupled with Tesla’s Gigafactory, could continue a strong upward market trend for many years to come.
One potential chokepoint for this trend, however, is whether there will be enough raw materials to match production demand, which suggests lithium prices have nowhere to go but up from here. For Liberty One Lithium Corp. (LBY:CA)(LRTTF:OTCBB), which is an emerging exploration company focused on the acquisition and development of high grade lithium brine deposits destined for use by global business interests, staying opportunistic is critical in this burgeoning industry.
Currently, Liberty One’s initial property is the Paradox Basin, located in Southeastern Utah and only about 750 miles away from Tesla’s Gigafactory. Yet, as lithium demand continues to soar, the search for new sources is quickly expanding internationally. Those positioned to adjust to the evolving market dynamics will be poised to lead this trend in the years ahead.
“Lithium demand is going to continue its growth path for the foreseeable future,” Bradley Hoeppner, President and Director of Liberty One, told Equities. “As the demand for lithium increases over the next decade, finding new sources of supply will be imperative. Whether those sources be North American, as in our Paradox North project in Utah, or from other jurisdictions, as in the Lithium Triangle, more supply will be absolutely necessary to feed this growing market moving forward.”
Can Lithium Supply Meet Booming Demand?
Just looking at Tesla’s recent projections suggests the company would need about 27,000 tonnes of lithium carbonate a year to reach its 2018 annual sales target of 500,000 vehicles. That figure alone would have equated to 16% of global consumption last year.
Image via Steve Jurvetson/Flickr CC
From a supply perspective, it’s also important to consider that the lithium industry is currently locked in a tight oligopoly. Albemarle, the world’s biggest lithium producer, acquired Rockwood, owner of Chile’s second-biggest lithium deposit, in 2014. Albermarle and three other companies—SQM, FMC of America and Tianqi—hold most of the world supply of lithium salts, according to Citigroup. So, it would seem that it would be in Tesla’s best interest to be able to count on a new generation of producers to help meet its goal.
Another factor of the lithium market fueling demand is the hybridizing of the power grid. These new power systems work with a combination of renewable energy and lithium-ion batteries, which provide multiple advantages over lead acid batteries. Lithium batteries can tolerate higher heat, eliminating the need for cooling equipment. Utilities will increasingly use giant battery packs, charging them at times of low demand and switching them on at peak times providing an alternative to constructing a fossil-fuel plant that will drain money as it sits idle.
AES Energy Storage, a big provider of energy storage, is putting its money in lithium to manage the lifespan of a storage system and reduce costs. In 2014, AES built a “peaker plant” in Southern California capable of adding 100 megawatts of power to the grid.
Liberty One Lithium Corp is On the Hunt for Properties with Potential
As for Liberty One Lithium, the company very recently uplisted as a TSX Venture Exchange Tier 2 company, and subsequently announced that it closed a first tranche of its $4.2-million non-brokered private placement. These milestones now position the company well to execute on its acquisition strategy of lithium properties.
“With our goal of finding production-worthy lithium brine deposits, having a strong financial position allows us to move forward with our Paradox North project, while at the same time keeping our eyes open to opportunity.” Hoeppner said.
With water restrictions becoming stricter in Nevada’s renowned Clayton Valley, where many junior lithium companies have staked claims, brine in Utah could prove to be extremely important in the near future. What’s more, Liberty One’s Paradox Basin has lithium grades that are 6x greater than Albemarle’s best wells in Nevada and 18x greater than Pure Energy’s in the same area.
But the lithium boom isn’t driven just by North American demand alone. It’s very much a global theme, and Liberty One looks to remain prudent and calculated in its search for the next big producer.
“The demand for lithium worldwide is going to continue to increase through 2025 and beyond,” added Hoeppner. “We are exceptionally pleased to be moving forward in this growth sector.”
For more information on Liberty One Lithium Corp. visit www.libertyonelithium.com.
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