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Top 3 best valued lithium juniors, as lithium prices near a bottom

Following an incredible 2022, the lithium sector has had a horrible 2023; however soon the pain should be over. The China lithium carbonate spot price is down 82.5% in the past year and is now below the marginal cost of production, meaning the lithium price fall should end very soon. This assumes the marginal cost producers continue to stop production and that EV sales continue to grow in 2024.

This means it’s now time to take a fresh look at the beaten down lithium stocks as we approach 2024. Today we look at 3 very well valued lithium juniors with high quality lithium projects likely to make it to production before 2027.

China lithium spot price 5 year chart showing the lithium price bottom has been reached or it should bottom very soon

Source: Trading Economics

Critical Elements Lithium Corporation (TSXV: CRE | OTCQX: CRECF)

Critical Elements Lithium is arguably the most undervalued advanced lithium junior globally. The Company is in the project funding stage for their 100% owned Rose Lithium-Tantalum spodumene Project in Quebec, Canada.

The Rose Project August 2023 Feasibility Study resulted in an after-tax NPV8% of US$2.195 billion and an after-tax IRR of 65.7% with average price assumptions of US$4,699 per tonne technical grade lithium concentrate, US$2,162 per tonne chemical grade lithium concentrate, and US$150 per kg tantalum pentoxide (Ta2O5). Initial CapEx is estimated at US$471 million and OpEx at US$617/t spodumene.

The Project achieved its mining license in September 2023 and in October 2023 ordered its long lead equipment for the Project construction. To achieve project funding Critical Elements is evaluating what they state as “continued interest from blue-chip strategic partners”.

Management is top tier with development and operational lithium experience, including the former Rockwood Lithium CEO and CFO (Rockwood was sold to Albemarle Corporation (NYSE: ALB) for US$6.2 billion in January 2015).

Possible 2026 lithium spodumene producer. Critical Elements Lithium trades on a market cap of C$200 million.

Critical Elements Rose Project in Quebec, Canada

Source: Critical Elements Company presentation

Frontier Lithium Inc. (TSXV: FL | OTCQX: LITOF)

Frontier Lithium 100% owns the PAK Lithium Project in northern Ontario, Canada. The Project has a tier one total Resource of approximately 58.5 Mt at high grades spread across the Spark and PAK deposits, as shown below.

The PAK Project 2023 PFS resulted in a post tax NPV8% of US$1.74 billion, 24% IRR, based on a lithium hydroxide selling price of US$22,000/t. Phase 1 CapEx (Mine & Mill) was estimated at US$468 million and Phase 2 (expansion and LiOH refinery) at US$576 million.

A key positive for Frontier Lithium is they can sell high quality technical grade at a high price in the first stage of the project. Another positive is that the PAK Deposit has a very high-grade zone of 657kt at 3.59% Li2O. Road access to the Project remains the main issue; however, the upcoming 2024 DFS Phase 1 is advancing the option of building the mine and mill using a winter road and for transportation of spodumene concentrates.

Frontier Lithium is targeting to commence spodumene production in H1, 2027. Frontier Lithium trades on a market cap of C$161 million.

Frontier Lithium has a tier one lithium resource at their PAK Project in Ontario, Canada

Source: Frontier Lithium company presentation

Lithium Ionic Corp. (TSXV: LTH | OTCQX: LTHCF)

Lithium Ionic owns two lithium projects in Brazil – Itinga Project (100%) and Salinas Project (85%). Itinga is near Sigma Lithium Corporation’s (NASDAQ: SGML | TSXV: SGML) Grota do Cirilo Mine and Salinas is adjacent to Latin Resources Limited’s (ASX: LRS) Colina Project. The current Resource Estimate of the Itinga Project is a M&I Resource of 16.69Mt @1.41% Li2O and an Inferred Resource of 16.21Mt @ 1.34% Li2O.

At the Itinga Project, the 2023 PEA Initial Phase (Bandeira only) resulted in a post-tax NPV8% of US$1.6 billion and an IRR of 121% to produce 217,700tpa of spodumene over a 20 year mine life. Despite being an underground mine the CapEx estimate was only US$233 million and the OpEx was US$349/t spodumene.

In some exciting news released on December 12, 2023, Lithium Ionic reported: “Widest and Highest-Grade Lithium Intercept to Date; Drills 1.72% Li2O Over 53.7m, incl. 1.87% Li2O over 39.5m at Bandeira, Minas Gerais, Brazil. This is one of the better drill results all year globally. Lithium Ionic CEO, Blake Hylands, stated:

“These results continue to emphasize the robustness of the lithium deposit at Bandeira, which currently represents around 90% of our total resource tonnage but only ~1% of our total property size pointing to the immense potential and scalability of our projects in this lithium-rich region.”

Catalysts in 2024 include further drill results, an updated Bandeira Resource and FS due early 2024, and project construction approvals (mid 2024).

A possible 2026 lithium spodumene producer. Lithium Ionic trades on a market cap of C$203 million.

Closing remarks

Commodity prices go in cycles. For lithium, the 2022 price boom was due to a temporary deficit in the market as global plugin electric car sales surged 56% higher that year. In 2023 we are likely to see a slowdown to ~28% sales growth, which has allowed lithium supply to catch up again with demand, hence the huge lithium price fall in 2023. 2024 is open for debate. If we get similar global plugin electric car sales growth as 2023, then the lithium market should be reasonably balanced and lithium prices a lot more stable. Looking out to the second half of this decade it is hard to see lithium supply keeping up with demand as the EV boom takes off with ever increasing numbers of sales. This means lithium juniors that can make it to production after 2025 may enjoy a very favorable lithium market.

Our top 3 best valued quality lithium juniors with near term production potential are Critical Elements Lithium Corporation, Frontier Lithium Inc., and Lithium Ionic Corp. Let’s check back in 2027 and see how they are doing.




Who might follow Patriot Battery Metals lithium exploration success in Canada in 2024?

The lithium market has had a torrid 2023 with China lithium carbonate spot prices falling as much as 81% in the past year; however, lithium juniors that made discoveries still did remarkably well.

We saw this most recently with Azure Minerals Limited (ASX: AZS) (“Azure”) stock price surging 1,328% higher in the past year. Having two Australian billionaires buying Azure stock and the Chilean miner Sociedad Química y Minera (NYSE: SQM) takeover offer for Azure also helped.

Looking only at Canada the star performer the past two and a half years was Patriot Battery Metals Inc. (TSXV: PMET | ASX: PMT | OTCQX: PMETF) (“Patriot”) made a huge lithium spodumene discovery at their Corvette Project in James Bay, Quebec, Canada. From January 2021 to December 2023 the stock price rose from C$0.31 to C$8.81, representing an outstanding gain of over 2,700% (>28x).

Patriot Battery Metals Corp. (TSXV: PMET) 5 year stock price chart

Source: Yahoo Finance

Who could be next to make a company-making lithium discovery in Canada in 2024?

Firstly it should be noted that Patriot Battery Metals looks poised to make further discoveries on their Corvette Project in 2024. In particular, the CV9 pegmatite looks very promising with a recently announced “100 m of near-continuous spodumene-bearing pegmatite at CV9” at Drill hole CV23-345. CV9 is located approximately 14 km west of the CV5 Resource of 109.2 Mt @ 1.42% Li2O Inferred, the largest lithium pegmatite deposit in the Americas, and 8th largest globally.

Winsome Resources Limited (ASX: WR1 | OTCQB: WRSLF) (“Winsome”)

Winsome Resources had a great 2023 and looks set to have an even greater 2024. In January 2023 Winsome announced a superb drill result of “107m at 1.34% Li2O” at their Adina Project in James Bay, Canada. The Project is located quite near to Patriot’s Corvette Project. As a result, this region of Canada is now one of the hottest lithium exploration regions globally. Winsome is set to announce a maiden resource in late 2023 or early 2024 and expectations are for it to be ~45 million tonnes at 1.3% Li2O. January 2024 will see 5 drill rigs on site potentially leading to more great discoveries at Adina in 2024. Winsome has several other projects with lithium potential, including Cancet, also nearby in the James Bay region.

Winsome’s Managing Director Chris Evans recently stated:

Drilling continues to intersect high grade lithium mineralisation as we step out away from the core of the Adina mineralisation and we look forward to further results…The remainder of 2023 will be a very busy time for Winsome with several work programmes to be completed as well as a long list of targets requiring drill testing.

All of this means Winsome will have a wave of announcements in the coming weeks and months and should be re-rated based on announcing what should potentially be a world-class resource. Winsome’s current market cap is only A$210 million. By comparison, Patriot Battery Metals’ market cap is C$1.09 billion.

Winsome’s Adina Project Maiden Resource is expected in December or January 2023

Source: Winsome Resources company presentation

Brunswick Exploration Inc. (TSXV: BRW | OTCQB: BRWXF) (“Brunswick”)

Brunswick Exploration has spent the past 2-3 years accumulating what looks to be the largest portfolio of early stage lithium exploration tenements in Canada (Quebec, Ontario, Saskatchewan, Manitoba, New Brunswick, and Nova Scotia). Brunswick is about a year behind Winsome in terms of exploration.

Brunswick’s highest priority lithium projects for now are all in James Bay Canada and are Mirage, PLEX, Mythril, Elrond, and Anatacau.

Mirage is already showing enormous potential. Brunswick announced on December 4, 2023, that they had discovered “significant spodumene mineralization in Dyke swarm at Mirage”. The news stated:

Bonanza grades of 2.57% over 25.8 meters in drill hole MR-23-02, including 14.2 meters at 3.08% Li2O at a vertical depth of 28 meters from Dyke MR-1 in the North Zone. Thick intercept of 50.6 m at 1.06% Li2O in drill hole MR-23-07 from Dyke MR-3 in the Central Zone at a shallow vertical depth of 22 meters. Another bonanza intercept in drill hole MR-23-14: 16.2 m at 2.75% Li2O including 9.5 meters at 3.30% Li2O at a vertical depth of 40 meters in Dyke MR-4 from the South Zone. To date, spodumene-bearing pegmatite dykes have been traced by drilling over a combined strike extent of at least 1,500 meters and remain open in all directions. Only 60% of the pegmatite outcrops have been drilled, presenting further drill targets which will be tested in winter 2024. Assays are pending for a further 23 drill holes completed during the fall 2023 program…

These are very exciting grades and very strong early drill results, potentially signifying the very early days of a significant lithium spodumene discovery at Mirage.

Brunswick President and CEO, Killian Charles, commented: “We are rapidly starting to outline a major discovery in the Eeyou Istchee-James Bay. This true grassroot discovery was first identified in August with drilling beginning less than six weeks later.

Brunswick Founder and Executive Chairman, Robert Wares, stated: “I am very pleased with these initial drill results. Mirage already demonstrates potential for a large lithium-rich dyke field with some of the highest-grade intercepts reported in Eeyou Istchee-James Bay.

Brunswick has also had some very good early stage results from their Elrond and Anatacau West Projects in Quebec, Canada which will undergo further exploration in 2024. Anatacau West lies adjacent and East of Allkem Limited‘s (ASX: AKE | TSX: AKE) James Bay Project (Indicated Resource Estimate of 40.3 million tonnes @ 1.4% Li2O).

2024 should also see Brunswick drill their exciting Mythril Project (option to acquire 85%) which lies directly adjacent to Patriot Battery Metals Corvette Project and is yet to be drilled.

Brunswick Exploration trades on a market cap of C$209 million.

Brunswick Exploration is just getting started with lithium discoveries at Mirage, Elrond and Anatacau in 2023

Source: Brunswick Exploration company presentation

Closing remarks

The lithium market is out of favor right now due to lithium prices and many stocks collapsing in price in 2023. The success of Azure Minerals and Patriot Battery Metals were spectacular, but they won’t be the last.

Two of the very best lithium juniors with Canadian projects are Winsome Resources and Brunswick Exploration. Both have tasted some lithium exploration success in 2023, but that looks likely to be just the beginning with 2024 potentially company making years for both.




With lithium demand skyrocketing here are 5 early-stage lithium junior miners to watch

With lithium demand projected to increase 10-11 fold this decade, there is a huge opportunity for successful lithium junior miners to prosper. Last year Rio Tinto was quoted as saying that “filling the supply gap will require over 60 Jadar projects”.

Then just last month Tesla CEO Elon Musk said (Tesla Q1 2022 earnings call transcript): “…can more people please get into the lithium business? Do you like minting money? Well, the lithium business is for you…” Musk also said on Twitter: “Price of lithium has gone to insane levels! Tesla might actually have to get into the mining & refining directly at scale unless costs improve.

Of course, industry experts have been warning of EV metals supply deficits for some years, but it appears these warnings mostly fell on deaf ears. With this background in mind, today we take a look at some early-stage lithium junior companies with the potential to help fill the lithium supply gap in the second half of this decade.

China lithium carbonate spot prices – up about 6x over the past year due to lithium shortages

Source: Trading Economics

5 early-stage lithium junior miners to watch out for in 2022 (in no particular order)

  1. Essential Metals Limited (ASX: ESS)
  2. Green Technology Metals Limited (ASX: GT1)
  3. Metals Australia Ltd. (ASX: MLS)
  4. Lithium South Development Corporation (TSXV: LIS | OTCQB: LISMF)
  5. Winsome Resources Limited (ASX: WR1)

Essential Metals Limited (ASX: ESS)

Essential Metals is an Australian exploration company with 9 projects (lithium, gold, gold JV, and nickel JV) all in Western Australia (WA). Three of the projects are 100% owned and 6 are JV’s with other companies, with ESS retaining a 20-30% interest (see below).

Essential Metal’s flagship project is their 100% owned Pioneer Dome Lithium Project in WA. The Project is located in a known lithium corridor and the gold-rich Eastern Goldfields region of WA, which contains the Mt Marion, Bald Hill and Buldania lithium mines/projects. The Project has a reasonable sized JORC compliant Total Resource of 11.2Mt at 1.21% Li2O, still with exploration upside. The Resource starts from or near surface. Drill assay results from the recent campaign are due out by the end of May 2022.

Essential Metals also has two other 100% owned gold projects in WA, namely the Golden Ridge Project (100% owned), 20kms from the Kalgoorlie super pit and the Juglah Dome Project, 60km east-southeast of Kalgoorlie. In addition, the Company has numerous JV projects including Acra Gold Project JV (25% interest), Kangan Gold Project JV (30%), Balagundi Gold Project Farmin/JV (25%), Larkinville Gold Project Farmin/JV (25% gold interest) (hosts a JORC Resource of 19,700 t @ 3.02 g/t for 11,600 oz. Au), Blair-Golden Ridge Nickel Farmin/JV (25% nickel interest) and Wattle Dam Nickel Joint Venture (20% nickel interest).

Essential Metals trades on a market cap of A$162 million.

Essential Metals summary showing the Pioneer Dome Lithium Project location near other successful lithium mines and projects in WA

Source: Essential Metals company presentation

Green Technology Metals Limited (ASX: GT1)

Green Technology Metals (GT1) has multiple lithium projects (options to acquire, some at 80% interest others at 100% interest) spread over 39,982 hectares in Ontario, Canada. GT1’s most advanced project is the Seymour Lithium Project with a JORC Total Mineral Resource of 4.8Mt @ 1.25%. Within the Seymour Project, drill results include an impressive 40m @ 1.54% Li2O. When combining all GT1’s Ontario Lithium Projects the target resource is 50-60 MT @ 0.8-1.5% Li2O.

An updated resource estimate is targeted for Q2, 2022. Management is top tier and highly experienced.

Green Technology Metals trades on a market cap of A$212 million.

GT1’s portfolio of multiple lithium projects in Ontario Canada

Source: GT1 website

Metals Australia Ltd. (ASX: MLS)

Metals Australia is an Australian junior miner with several projects. Their most advanced project is the Lac Rainy Nord Graphite Project in Quebec, Canada with an Indicated and Inferred Resource of 13.3Mt at 11.5% TGC for 1.529M tonnes of contained graphite.

With regards to lithium, Metals Australia 100% owns the promising Manindi Lithium and Zinc Project in WA. The Project has several lithium-cesium-tantalum (LCT) pegmatites spread over a total 3km strike length. Individual pegmatites have strike lengths of over 300m and widths of up to 25-30m. Past drilling includes intersections of 15m @ 1.2% Li2O, 117 Ta205 from 34m. Drilling is ongoing notably at the Foundation pegmatite where consistently high grade lithium grab samples (1% Li2O and >0.4% Rb) have been detected over the entire 500m strike length. Assay results are expected shortly. Manindi also has an existing JORC 2012 Resource estimate of 1.08Mt at 6.52% Zn, 0.26% Cu and 3.19g/t Ag.

Metals Australia trades on a market cap of A$54 million.

Lithium South Development Corporation (TSXV: LIS | OTCQB: LISMF)

Lithium South Development Corporation (Lithium South) is already quite advanced at their 100% owned Hombre Muerto North Lithium Brine Project in Argentina. The Project lies near several billion-dollar projects such as Livent’s lithium mine, Allkem’s Sal de Vida project, and POSCO’s quite new project purchased for US$280 million. Hombre Muerto is the premiere salar in Argentina, known for very high grade lithium and very low impurities.

The Hombre Muerto North Project has an M&I Resource of 571,000t contained LCE, with an excellent grade of 756mg/L, and a very low Mg/Li ratio of 2.6:1. Drilling is about to begin at their Alba Sabrina claim with results to follow most likely later in Q2, 2022. The Resource has potential to grow significantly from here.

Lithium South trades on a market cap of only C$68 million.

Winsome Resources Limited (ASX: WR1)

Winsome Resources is a lithium explorer focused on their 4, 100% owned, projects spread over 50,000 Ha in Quebec, Canada. The Projects are Cancet, Adina, Sirmac-Clappier, and Decelles (option to acquire 100%).

The flagship Cancet Lithium Project has had outstanding previous drilling success and boasts a JORC Exploration Target of 15-25Mt @ 1-2% Li2O + 100-250ppm Ta2O5. The past drilling includes 59 holes for 5,216m averaging ~70m drill depth defining a shallow high-grade lithium deposit. Drilling will continue in 2022 with a substantial maiden Resource estimated expected later this year.

Winsome Resources trades on a market cap of A$66 million.

Summary of Winsome Resources 4 lithium projects in Quebec, Canada

Source: Winsome Resources company presentation

Closing remarks

Investing in early-stage lithium juniors carries higher risk and reward.

Of the 5 companies discussed in this article three (Essential Metals, Green Technology Metals, Lithium South Development Corp.) already have a lithium resource, one (Winsome Resources) has defined a lithium deposit with a resource estimate due later in 2022, and the other (Metals Australia) has a graphite and a zinc-copper-silver resource with an exciting lithium project with drill results out soon.

I could also include Avalon Advanced Materials Inc. (TSX: AVL | OTCQB: AVLNF) in this group, but I already wrote on them recently here, discussing their lithium projects, lithium resource, and plans for a JV lithium refinery in Thunder Bay which were given a huge boost recently as you can read here.

Finally to answer Elon’s question: “Can more people please get into the lithium business?” The problem is it takes at least 5-10 years to build a lithium mine from scratch. I will finish with two key quotes last month from lithium market experts:

  • Benchmark Mineral Intelligence was quoted stating: “Battery capacity is currently growing at twice the speed of lithium raw material supply.
  • Mr. Lithium, Joe Lowry was quoted stating: “I believe there will be a day in the future when lithium is in oversupply, but it won’t be in this decade…..You can build a battery factory in two years, but it takes up to a decade to bring on a lithium project.”

Disclosure: The author is long ALL the lithium companies mentioned in this article and intends to hold long term.