Lithium Companies Welcome Q4

Monday October 7, 2013, 4:00am PDT
By Vivien Diniz - Exclusive to Lithium Investing News

With summer now officially over and Q4 capping off its first week, here’s a look at some lithium companies that have started the latest quarter on a high note.

Providing investors with an update to the goings-on at the Quebec lithium project was Canada Lithium (TSX:CLQ). This week, the company told investors that it is on track with the commissioning of its open-pit mine and processing plant in Quebec. After a scheduled maintenance shutdown in August, Canada Lithium was able to restart operations at the Quebec lithium project by mid-September and is well underway to meeting its goal and completing the commissioning of the plant and ramping up to full production by the end of Q1 2014. Currently, the company is still operating at a reduced rate, with the expectation that mining operations will be back in full swing by the end of October. According to the company’s most recent press release, roughly 100,000 tonnes of ore remain in the stockpile at the crusher.

In September, the company received a $5 million pre-payment from its off-take partner, China’s Tewoo-ERDC. The funds were used for working capital as the company progresses with the project’s commissioning.

Nemaska Lithium (TSXV:NMX) also kicked off Q4 with good news. On October 1, the company released some results of its recent drilling activities at the Whabouchi lithium project located near Chinougamau, Quebec. Following 24 holes drilled on the property, Nemaska identified 14 diamond drill holes on the eastern portion of the deposit that stood out. Of those 14 holes, 12 “intersected spodumene bearing pegmatite dykes containing between 5% and 30% spodumene.” Further drilling extended the strike length of several of the dykes – including the main dyke – by 200 meters to the east.

Nemaska is looking to become a lithium hydroxide/carbonate producer in Quebec. The company has filed for patents to its proprietary lithium hydroxide and carbonate production methods.

Rockwood Lithium, a division of Rockwood Holdings (NYSE:ROC), started off the final quarter of 2013 by announcing that it would be increasing prices for butyllithium and other organimetallic products by roughly 4 percent globally on October 15. For those unfamiliar with butyllithium, it is an important lithium-containing organometallic compound that is applied to initial anionic polymerization of synthetic rubber. The specialty metals company has cited the need for the price increase due to the spiking prices for energy and raw materials, particularly solvents.

Dr. Gerd Michael Kraemer, vice president of global marketing and R&D at Rockwood Lithium, said the company is “continuously seek[ing] to improve production costs at various locations to offset higher material costs, while remaining committed to providing [its]customers leading quality products.”

Saying goodbye to summer

Some lithium companies decided to say goodbye to the summer doldrums and hello to Q4 with some good news in September.

Saying goodbye to the month of September in style was Western Lithium (TSX:WLC), which was happy to announce a strategic investor in Orion Mine Finance Fund I, which now holds a 19.9-percent interest in Western Lithium.

Orion Mine Finance is a $1.14-billion investment fund that aims to provide financing solutions for the development, construction, expansion or acquisition of mining projects.

The company’s CEO, Kay Chmelauskas, told investors in a statement that “[w]e have a long term investor with Orion Mine Finance, who recognizes our prospects to commercialize our hectatone(TM) organoclay and lithium businesses based on the growth of directional drilling technology and the adoption of electrified automobiles using lithium ion batteries.”

Western Lithium is currently designing a production commissioning plan slated for 2014 for a 10,000-tonne-per-day clay facility. Alongside lithium, the company is pursuing a thermally stable organoclay that can be used in oilfield drilling applications.

Bacanora Minerals (TSXV:BCN) and joint venture partner Rare Earth Minerals announced mid-September that they will be starting a Stage 2 exploration and drilling program on the El Sauz, Fleur and new staked concessions at the Sonora Lithium project in Mexico. The companies expect to start drilling sometime in early October.

The drill program’s main objectives are to complete infill holes and upgrade the known resource, as well as to conduct step-out drilling to test for extensions of the resource, in particular on newly staked concessions.

Orocobre (TSX:ORL,ASX:ORE) said goodbye to the summer months with an early September announcement of the the commissioning of the first production wells and the start of the first evaporation pond at its Olaoroz lithium project in Argentina. The company started pumping and filling evaporation pond 4B at the beginning of August — four weeks earlier than schedule. The evaporation pond is one of the first steps in the manufacture of lithium carbonate. Additional bores were commissioned and pumping was increased to 30 percent of design rate, with the expectation to be running at full rate in November.

Olaoroz remains on time and within budget with a total of US$121 million spent or committed via executed contracts in the construction project to date, as per the company’s news release. According to Orocobre‘s website, the first battery-grade lithium carbonate produced from Olaoroz is scheduled for April 2014.

Securities Disclosure: I, Vivien Diniz, hold no investment interest in any of the companies mentioned.