David Sidoo: Lithium's Year in Argentina

Battery Metals
Lithium Investing

David Sidoo, president and CEO of Advantage Lithium, discusses what the company has been up to, and what to watch for in the next few months.

At this year’s Vancouver Resource Conference (VRIC), David Sidoo, president and CEO of Advantage Lithium (TSXV:AAL), took the time to speak with the Investing News Network (INN) about what his company has been up to lately. In particular, Sidoo spoke about Advantage Lithium’s new partnership with Orocobre (TSX:ORL) and what investors should watch for in the coming months.
Sidoo said investors have reacted positively to the partnership with Orocobre, noting, “it’s actually been a very, very good response.”
Other interview highlights include:
  • what investors should know about Advantage Lithium’s phase 2 drilling at Production Wells
  • Sidoo’s thoughts on what may happen in Argentina this year
  • the factors he thinks will impact the lithium sector the most in 2017
  • how, in his mind, a Trump presidency will impact the resource market
  • other lithium companies Sidoo is impressed with so far

Below is a transcript of the conversation. It has been edited for clarity and brevity. To watch the interview, please scroll to the top of this article. To view INN’s other VRIC interviews, click here.

INN: Recently you announced that you and your partner, Nevada Sunrise Gold (TSXV:NEV), will begin phase 2 drilling near Production Wells. What is the biggest highlight from the announcement that investors should know about?
DS: In Nevada, where we have some assets, we have a six-drill program in Clayton Valley North where Albemarle (NYSE:ALB) is the only producer in North America. They have been producing producing there for 40 years now. We drilled three holes there that probably had the best results of any junior in Nevada, and we are very excited about that. On the heels of that, we’re going to start drilling in the first quarter of 2017. That’ll be six holes we’ll have drilled, and the first three were very successful. We’ve got Albemarle’s attention, I think. They’re wondering, “who’s this young junior having some success?” That’s unlike anything they’ve seen down there.
INN: In November 2016, Advantage Lithium and Orocobre announced that Advantage would acquire 75 percent of Orocbore’s Cauchari project and a 100-percent interest in five other projects. How have investors reacted to this partnership so far?
DS: We’re just about to close a large financing right now, so it’s actually been a very, very good response. I had a roadshow that I did before Christmas. I went to Toronto, Montreal, New York and then Asia. I went to Australia, where a lot of the Orocobre shareholders are. We saw a lot of big money people, large fund institutions, and they were very impressed with what we’ve done with Advantage Lithium in the last six months. We’ve got a tremendous team there, we’ve got the ability to raise capital, and we’ve got some great assets now in Argentina that are all in the middle of a salar.

The key one that you did mention is the Cauchari asset, and that’s where all the action is happening right now. Last week, Lithium Americas (TSX:LAC), which is in the Cauchari Basin as well, announced up to a quarter-billion dollars of deals with two Chinese battery-making companies. That’s very significant for us. We’re the envy, I think, of a lot of juniors because we’re right in the thick of where all the action is and where all the short-term production is going to happen … in the next couple of years.
INN: What do you think is going to happen this year? Is there anything more significant that will come out of that?
DS: That’s a very good question. We have five holes permitted in Cauchari now. We’re going to start drilling in the first quarter — probably in March sometime — five holes in Cauchari to delineate a very large exploration target. We’ve got just under 500,000 tons of lithium carbonate equivalent now up there in that basin. We’re going to try and prove up from anywhere from another 500,000 to 5.6 million tons in those five holes in the next two or three months. They are going to be very important to delineate that exploration target, so it could be big for us at Advantage Lithium.
INN: Aside from Tesla Motors’ (NASDAQ:TSLA) lithium-ion gigafactory, what do you think will impact the lithium sector the most this year?
DS: That’s an interesting question. Everyone’s talking about supply and demand and price, and that kind of thing. I think if you look at a big company like Albemarle, they’ve actually gone back into exploration. They’ve been producing for many years, and they’ve gone back into exploration in Argentina. It’s a very popular and easy place to work. You can get your permits there. The government’s very pro-development and mining. They’ve come into a salar called Antofalla that’s just south of ours. So we’re the northern part of the salar, they’re the southern part. I think you’re going to see more companies like that coming into exploration and validating the fact that supply in the next four to five years is going to be short … and you need to go back into exploration and develop more.

INN: How do you think a Trump presidency is going to impact the resource market?
DS: So far, the Trump effect has been very positive. I think the administration there is very pro-oil and –gas and -mining. It’s very easy for us to work in Nevada where we’re working right now. I think the market in the next couple of years is going to be very, very strong. I’m not into politics or anything like that, but I see right now from the markets the way they’ve responded with the election, that we’re going to see the next couple of years be very, very strong.
INN: Finally, are there any companies you’re watching this year or that are making big strides or that you’re impressed with?

DS: You know, I have to say our partner Orocobre. Orocobre is our joint venture partner with Cauchari, and we acquired five other assets from them in Argentina, which are probably some of the best salars in Argentina for exploration. They’re going to start increasing their production. They’ve just started cash flowing now for the first time in a decade — 17,500 tons, they’re going to increase that to probably 35,000 — and hopefully we’re going to be a part of supplying that to them. Watch out for Orocobre, I think they’re an up and coming in Argentina.  
Don’t forget to follow us @INN_Resource for real-time news updates!
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 and Nevada Sunrise Gold are clients of the Investing News Network. This article is not paid for content.
The Conversation (0)