Friday 28th April 2017

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Posts tagged ‘Nemaska Lithium Inc (NMX)’

A 2016 retrospect

December 20th, 2016

Was it the comeback year for commodities—or just a tease?

by Greg Klein

Some say optimism was evident early in the year, as the trade shows and investor conferences began. Certainly as 2016 progressed, so did much of the market. Commodities, some of them anyway, picked up. In a lot of cases, so did valuations. The crystal ball of the industry’s predictionariat often seemed to shine a rosier tint. It must have been the first time in years that people actually stopped saying, “I think we’ve hit bottom.”

But it would have been a full-out bull market if every commodity emulated lithium.

By February Benchmark Mineral Intelligence reported the chemical’s greatest-ever price jump as both hydroxide and carbonate surpassed $10,000 a tonne, a 47% increase for the latter’s 2015 average. The Macquarie Group later cautioned that the Big Four of Albermarle NYSE:ALB, FMC Corp NYSE:FMC, SQM NYSE:SQM and Talison Lithium had been mining significantly below capacity and would ramp up production to protect market share.

Was this the comeback year for commodities—or just a tease?

That they did, as new supply was about to come online from sources like Galaxy Resources’ Mount Cattlin mine in Western Australia, which began commissioning in November. The following month Orocobre TSX:ORL announced plans to double output from its Salar de Olaroz project in Argentina. Even Bolivia sent a token 9.3 tonnes to China, suggesting the mining world’s outlaw finally intends to develop its lithium deposits, estimated to be the world’s largest at 22% of global potential.

Disagreeing with naysayers like Macquarie and tracking at least 12 Li-ion megafactories being planned, built or expanded to gigawatt-hour capacity by 2020, Benchmark in December predicted further price increases for 2017.

Obviously there was no keeping the juniors out of this. Whether or not it’s a bubble destined to burst, explorers snapped up prospects, issuing news releases at an almost frantic flow that peaked in mid-summer. Acquisitions and early-stage activity often focused on the western U.S., South America’s Lithium Triangle and several Canadian locations too.

In Quebec’s James Bay region, Whabouchi was subject of a feasibility update released in April. Calling the development project “one of the richest spodumene hard rock lithium deposits in the world, both in volume and grade,” Nemaska Lithium TSX:NMX plans to ship samples from its mine and plant in Q2 2017.

A much more despairing topic was cobalt, considered by some observers to be the energy metal to watch. At press time instability menaced the Democratic Republic of Congo, which produces an estimated 60% of global output. Far overshadowing supply-side concerns, however, was the threat of a humanitarian crisis triggered by president Joseph Kabila’s refusal to step down at the end of his mandate on December 20.

Was this the comeback year for commodities—or just a tease?

But the overall buoyant market mood had a practical basis in base metals, led by zinc. In June prices bounced back from the six-year lows of late last year to become “by far the best-performing LME metal,” according to Reuters. Two months later a UBS spokesperson told the news agency refiners were becoming “panicky.”

Mine closures in the face of increasing demand for galvanized steel and, later in the year, post-U.S. election expectations of massive infrastructure programs, pushed prices 80% above the previous year. They then fell closer to 70%, but remained well within levels unprecedented over the last five years. By mid-December one steelmaker told the Wall Street Journal to expect “a demand explosion.”

Lead lagged, but just for the first half of 2016. Spot prices had sunk to about 74 cents a pound in early June, when the H2 ascension began. Reaching an early December peak of about $1.08, the highest since 2013, the metal then slipped beneath the dollar mark.

Copper lay at or near five-year lows until November, when a Trump-credited surge sent the red metal over 60% higher, to about $2.54 a pound. Some industry observers doubted it would last. But columnist Andy Home dated the rally to October, when the Donald was expected to lose. Home attributed copper’s rise to automated trading: “Think the copper market equivalent of Skynet, the artificial intelligence network that takes over the world in the Terminator films.” While other markets have experienced the same phenomenon, he maintained, it’s probably the first, but not the last time for a base metal.

Was this the comeback year for commodities—or just a tease?

Nickel’s spot price started the year around a piddling $3.70 a pound. But by early December it rose to nearly $5.25. That still compared poorly with 2014 levels well above $9 and almost $10 in 2011. Nickel’s year was characterized by Indonesia’s ban on exports of unprocessed metals and widespread mine suspensions in the Philippines, up to then the world’s biggest supplier of nickel ore.

More controversial for other reasons, Philippine president Rodrigo Duterte began ordering suspensions shortly after his June election. His environmental secretary Regina Lopez then exhorted miners to surpass the world’s highest environmental standards, “better than Canada, better than Australia. We must be better and I know it can be done.”

Uranium continued to present humanity with a dual benefit—a carbon-free fuel for emerging middle classes and a cautionary example for those who would predict the future. Still oblivious to optimistic forecasts, the recalcitrant metal scraped a post-Fukushima low of $18 in December before creeping to $20.25 on the 19th. The stuff fetched around $72 a pound just before the 2011 tsunami and hit $136 in 2007.

Cardiff Energy expands its James Bay lithium property

July 11th, 2016

by Greg Klein | July 11, 2016

Cardiff Energy TSXV:CRS reaffirmed its new focus on lithium by nearly doubling its Eastmain River property in Quebec’s James Bay region. The 1,109-hectare acquisition covers a 1.8-kilometre-long outcrop of white pegmatite that has yet to be mapped in detail or explored for lithium, the company announced July 11. It lies “at the periphery of the Kapiwak Pluton and adjacent to the Lower Eastmain Greenstone Belt, a geological setting which is reported to offer great potential for rare metal-bearing pegmatites.”

Cardiff Energy expands its James Bay lithium property

Cardiff stated that ASX-listed Galaxy Resources’ James Bay deposit and the Cyr-2 lithium showing “form an approximately four-kilometre-long corridor of spodumene-bearing pegmatite that is roughly parallel to the trend of the regional bedrock geology. The pegmatite outcrop of the eastern claim block is located approximately 4.5 kilometres southeast of the Cyr-2 lithium showing in a direction that is roughly on strike to the regional bedrock geology.”

The region’s more advanced projects include Critical Elements’ (TSX:CRE) Rose lithium-tantalum deposit and Nemaska Lithium’s (TSXV:NMX) Whabouchi project.

Cardiff’s property lies 2.5 kilometres from a highway, with accommodations and other amenities eight kilometres southwest and an airport 30 kilometres away. The company is currently planning a work program.

Read interviews with Chris Berry and Jon Hykawy discussing energy metals.