https://www.linkedin.com/pulse/lithium-update-portfolio-selection...

https://www.linkedin.com/pulse/lithium-update-portfolio-selection-august-2018-rodney-hooper/

Min Res running hard today on rumours that there is a buyer for 49% of Wodgina at $1.5bn. Last large AUS hard rock on offer. LiOH production potential of 115k MT per year.

Hydroxide still all the rage but the market needs to take a closer look at Li2CO3, carbonate. The oversupply myth regarding the Atacama is fading. ALB & SQM are facing various issues in the Atacama. Not just water but also Corfo sanction for not paying sufficient royalties etc. The local communities are not happy, WML decided to postpone its drilling program given push back. What does this all mean? Simply put the Atacama is likely to produce 150k-200k MT per annum, not 400k MT. It remains to be seen if LAC / Ganfeng succeed in C/O and reach 25k MT nameplate. One might ask why SQM pulled from C/O if they aren't going to reach their own targets - simple reason - the amount of management time and $ to secure 50% of 25k MT per annum (12.5k MT) wasn't worth it. Simon Moores of benchmark highlighted the reality - the large producers want 50-100k MT per year projects. The fact is that Li2CO3 is going to be in shorter supply than analysts are forecasting - likely to result in a much narrower pricing spread between LiOH and carbonate.

So what quality deposits are left? For brine my money is on NLC and LPI. However, despite both projects being likely to end on 4m MT resources the majors won't engage unless they can buy them outright. Others might JV but the majors won't - IMO. Both projects could reach 50k MT pa + in a 2nd phase expansion. So we'll see - both are trading at very low EV's  - despite have high Li content and low impurities.