The lithium sector has certainly been an exciting space to be in the last couple of years. And at this year’s Prospectors & Developers Association of Canada (PDAC) conference in Toronto, it was clear that enthusiasm in the space is still very much alive.
The Investing News Network (INN) had the opportunity to speak with David Sidoo, CEO of Advantage Lithium (TSXV:AAL), about what the company has been up to. Notably, Advantage Lithium recently announced that it had surpassed its best results to date in the Clayton Valley.
Commenting on that development, Sidoo said the results validate “that there’s a larger resource there than everybody’s thought about in the past.”
Other highlights of our conversation include:
- what the company’s main focus will be when drilling at Cauchari in Argentina
- where Advantage Lithium will fit into Argentina’s production ramp up in the coming years
- what has made the company successful
- how a recovery in the cobalt space will impact lithium
Below is a transcript of our conversation. It has been edited for clarity and brevity. To listen to the interview, please scroll to the top of this page.
INN: On March 1, Advantage Lithium announced that it has surpassed its best results to date at Clayton Valley in Nevada. What excites the company the most about these results?
DS: I think it validates our geologist’s view that we believe there’s another … that we can drill into that has a large upside potential for reserve development in Clayton Valley. As you know, Albemarle (NYSE:ALB), the large company that’s down there, is the only producer in North America, and in the US actually. They’ve been doing it themselves for a long time, and here we’ve come — a young junior company come in — and basically validating that there’s a larger resource there than everybody thought about in the past.
INN: Drilling at Cauchari is expected to start soon. What will be the company’s main focus with respect to that drilling?
DS: We’re really excited about that, because that’s a real focus of the company. We’ve got five permits and those are the five permits that have been given to us as the first company that’s received five permits to drill in Cauchari … so we’re quite excited about that. It gives us the opportunity to drill down to 400 to 450 meters deep, which is the deepest holes that will be drilled there, to potentially build a larger resource that’s there in Cauchari. So we’re excited about those first five holes, and then we have another 12 diamond holes we can drill off those five permits. So 17 holes over the next six to eight months. Lots of news coming out of Cauchari.
INN: It’s been said that Argentina will be the next leading exporter of lithium. As lithium production has significantly ramped up in the country over the last few years, and with a number of projects under development, where does Advantage Lithium fit into all of this?
DS: It’s interesting. You look at all the research that’s being done out there right now. They’re saying by 2020 you’re going to see these major car companies that are coming into the lithium industry, bringing out their vehicles into the marketplace, and there’s going to be a huge need for supply of lithium. We’re going to be right in that wheelhouse. At that time, between 2019, 2020, Advantage Lithium thinks we’ll be one of the producers in Argentina, and that’s exciting for us.
INN: Some have said that many junior lithium mining companies won’t succeed. What has made Advantage Lithium so successful?
DS: That’s a really good question. I always talk about the table that has four legs on it when you ask that question. The number one leg: you’ve got to have a very good asset. We’ve got excellent assets, we’ve got a developed asset in Cauchari, we’ve got five other assets that are exploration assets that sit in the middle of salars. We’ve got a management team that’s built resources in mining, and oil and gas and technology over the years. We’ve got a team that’s raised enough capital to get those assets monetized, and the fourth leg on that table is we’ve got a team and a group that can create liquidity in the market and eyeballs on your stock.
I feel that separates us from all the other people out there. We’re not arm waving saying we have an opportunity because we’ve got it in area play, we surround the salar, we’re near SQM (NYSE:SQM), we’re near Lithium Americas (TSX:LAC). We’re actually in the middle of salars with five assets that we own 100 percent of, and we’re developing one that we own 75 percent of that’s more of a development asset. That separates us from everybody.
INN: Many have said that this is the year for cobalt. If cobalt manages a recovery this year, how do you think that will impact lithium moving forward?
DS: That’s a good question, too. There’s three components that make up the batteries. Lithium is one, cobalt’s one and nickel is another one. The largest input in a battery is lithium. I don’t think any increase in cobalt supply in the marketplace, or nickel is going to make any difference to the price of lithium right now. Lithium is a rare element that is really impervious to any kind of fluctuations politically or economically around the world. If you’ve looked the last eight months, you’ve had Brexit in London, you’ve had the presidential election in the US, you’ve seen gold pull back, you’ve seen silver pull back, you’ve seen gold go up and down. Lithium prices have been solid as a rock where they’ve been between $10,000 and $12,000 a tonne. So I don’t think it’s going to have much of an effect.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in contributed article. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Advantage Lithium is a client of the Investing News Network. This article is not paid-for content.