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Admiralty Resources (ADY)17cCHIEF Admiral Phil Thomas claims he is regularly shadowed by shareholders desperate for the next clue about the miner's activities.Indeed, his recent visit to a Northern Territory prospect was reported on a day-traders' share tattle site moments after his plane's wheels hit the tarmac.Alert but not yet alarmed,Criterion momentarily averted his eyes from his soy latte and scanned the cafe whereThomas Was appraising him of Admiralty's South American activities.Fortunately, there was no evidence of trench-coated speculators furtively taking notes. Then again, they wouldn'tbe so obvious, would they?Espionage or not, there's been an unusual level of interest in the stock, which has a market cap of only $87 million. Volume in the past 12 months has exceeded 2.2billion shares, which compares with the 490 million on issue.ADY is a stock to consider for investors who are jaded with coal, iron ore and base metals.While ADY is into iron ore and is looking for lead and zinc,its main wheeze is a huge resource of lithium and related minerals in Argentina.Lithium is used for a variety of purposes, including welding fluxand anti-static treatments.But the real killer app (haven'theard that one for a while) is forheavy-duty batteries.The latter offers a potentially huge market, as car makers start paying more than lip service toyota hybrid vehicles. Lithium also hasa key role in the hydrogen economy (not that we know what this term really means); as the volatile element can be stored in a lithium solution.ADY's Argentinian site consists of a hyper-saIine lake atRincon Salar, nestled high in the Andes.Its inferred resources consist of 70,000 tonnes of lithium,1.3 million tonnes of potassium and 500,000 tonnes of magnesium.In reality, the resource could be limitless, as the mineral-richwater is constantly replaced.The minerals - and other by-products such as boric acid - are produced from evaporating the water in large ponds.The $US39 million ($51million) project is due to start in 2007-08.Thomas says the lithium market is dominated by a cartel of three Chilean and Argentinian players."We have the potential to be the fourth member, or the cartelbuster," Thomas says. Unlike the others, ADY's sales will focuson Asia, where battery manufacturing has been ramping up in Malaysia and China inparticular.The Rincon Salar project is being partially funded by aseparate 49 per cent owned iron project in northern Chile.The resource consists of 38 million tonnes of high-grade ore. Three million tonnes are already stockpiled in neat mounds, the legacy of forrmer dictator General Pinochet, who scared off the former owners in 1973.The plant is due for commissioning in the current half. Estimated production of 2.5 million tonnes a year is expected to produce net earnings of $USlO million from 2006-07.Thomas agrees the iron ore isa sideline to fund Rincon Salar.Oddly, the company had been working on an orthopaedic (hipreplacement) venture to provide the requisite cash flow.According to resources specialist Martin Place Securities, ADY is trading at a"considerable discount" to the 48c a share the firm reckons it's worth. The firm notes the-successof Rincon Salar depends on ADY securing long-term sales contracts.The company recently signed up the British-listed Rheochemto buy up to 10,000 tonnes of potash and sell up to 30,000. tonnes of potassium chloride onan agency basis. Criterion rates ADYa SPECULATIVE BUY.On Martin Place estimates,ADY will produce a net loss of$31.5 million in the current year,a $17.6 million deficit next year and a $38 million profit in 2007-08. ADR's forthcoming listing of American DepositaryReceipts may spark US investor interest in the stock