Nanalyze

19 Lithium Junior Mining Stocks

One of our most popular articles lately has been one we published in August 2015 titled “Don’t Invest in Lithium Mining Companies“. The reason this article has become quite popular lately can be attributed to the below graph from Google Trends that shows people’s interest in lithium mining based on their searches:

Lithium_Mining_Interest

As you can see in the above chart, interest in lithium mining peaked in 2010, and now this theme is becoming popular again. Our previous article discussed how the 3 dominant lithium mining companies are responsible for over 90% of the world’s lithium production. Since that article was published, these three companies have realized a +13% increase. Why so low? The reason is that lithium contributes a very small proportion of revenues for each of these three companies.

Our readers were quick to point out that we shouldn’t overlook the potential of junior lithium mining companies. The problem with this investing thesis is, that the majority of these companies are only accessible to U.S. based investors via the over-the-counter exchange (OTC) which is rife with scams and companies that typically lose investors’ money. Since our first article, lithium prices have been on a tear and consequently all companies attaching themselves to the lithium story have experienced a strong increase in share prices. Here are 19 junior lithium mining companies mentioned by our readers and their share price performance over time (MC is the present market cap of each company in U.S. dollars):

Ticker YTD 1-Year 5-Year MC
Orocobre TSE:ORL +25% +43% +10%  480
Pilbara Minerals ASX:PLS +55% +1174% +787% 318
Galaxy Resources ASX:GXY +147% +763% -77%    275
Neometals ASX:NMT +135% +900% -31%    168
Nemaska Lithium CVE:NMX 114% 429% 80%    147
Altura Mining ASX:AJM +281% +950% +31%    153
Bacanora Minerals CVE:BCN -22% -19% +109%     90
Lithium Americas TSE:LAC +63% -14% -51%     68
Lithium X Energy Corp CVE:LIX +244% +287% N/A     64
Rare Earth Minerals LON:REM -25% -54% -2%     55
Pure Energy Minerals CVE:PE +24% +208% +47%    37
European Metals ASX:EMH -3% +132% -21%    26
Red River Resources ASX:RVR +23% -21% +35%     17
Dajin Resources CVE:DJI +4% +114% -50%     13
Sirios Resources CVE:SOI +104% +79% -61%     12
Aberdeen International TSE:AAB -13% -7% -84%     10
International Lithium Corp CVE:ILC +33% +300% -71%      6
Ultra Lithium CVE:ULI +100% -20% -77%      6
Nevada Sunrise Gold Corp CVE:NEV -9% -45% -68%      5
+67% +274% +28.13%   1,950

 

The first takeaway is that if you invested in all 19 of these lithium junior mining companies in 2010 when the theme was subjected to a great deal of hype, you would be up +28% compared to an S&P return of +54%. If you remove the outlier, Pilbara Minerals, you would be down -16%. On the other hand, if you invested in all lithium junior miners exactly one year ago, you would be up +218% compared to a -1% return for the S&P500. Transaction costs aside, these are some spectacular returns for “speculators” in the short term. For “investors” who bought into the last lithium hype in 2010, you’re still down compared to a much less risky investment in the S&P500. Since lithium isn’t a publicly traded commodity, we can only assume that the price of lithium has increased 3X in order to merit the fact that all lithium junior miners have increased accordingly in just 1 years’ time. It will be interesting to see how many of these companies are still around 5 years from now.

So if we are invested in some or all of these companies, the question becomes when do we sell? Based on the performance trends we see, the answer would be not yet. However if you are waiting for one of these junior miners to sign an agreement with Tesla, don’t expect a huge return if that news comes out. Bancora Minerals signed an agreement with Tesla last year, and yet the share price has lost -19% in the last year.

So if you’re keen on investing in lithium junior mining companies, you can buy a basket of the above 19 lithium junior mining stocks. Note that the entire market cap of all 19 lithium junior mining stocks does not even exceeed $2 billion in total market cap. For U.S. based investors, you’ll either need to trade this basket by buying these stocks on the illiquid OTC market, or pay extra transaction costs to buy these stocks on their native exchanges.

We’ve excluded any company that had a market cap less than $5 million USD because these companies generally showed horrendous 5-year returns. Are there any lithium junior mining companies with a market cap greater than $5 million USD that you think we missed? Drop us a note.

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  • Joe

    Looks to me like you got them all….my blog piece had also mentioned Durango Resources, DGO on the TSX or ATOXF on the OTCBB, but it doesn’t meet the $5 million threshold you set, it currently has a MC of appx $1 million CDN. According to news Durango has staked all the land around Nemaska’s proposed mine, so perhaps they’ll meet that $5 million benchmark in the not too distant.

    Good article, better than the one from Aug of last year.

    • Andy

      A very good one not on the list is ADV 0 Ardiden

      • Andy

        As in Ardiden ( ASX: ADV) Super Jumbo Flakes and Lithium,going to go off like a rocket and not on the radar of most

  • Vicent el de L alcudia

    Molt bon article. Jo tinc acsions de Dakota i me van collonudes. Bona Nit.

  • JCruz

    FROM WIKIPEDIA

    Another example of an activity that skirts the borderline between legitimate promotion and hype is the case of LEXG. Described (but perhaps overstated) as “the biggest stock promotion of all time”, Lithium Exploration Group’s market capitalization soared to over $350 million, after an extensive direct mail campaign. The promotion drew upon the legitimate growth in production and use of lithium, while touting Lithium Exploration Groups position within that sector. According to the company’s December 31, 2010 form 10-Q (filed within months of the direct mail promotion), LEXG was a lithium company without assets. Its revenues and assets at that time were zero.[19][20] Subsequently, the company did acquire lithium production/exploration properties, and addressed concerns raised in the press.[21][22]

    BUYER BEWARE

    • Nanalyze

      Thank you for the comment Jcruz. This is exactly why we warned investors about INVESTING in junior lithium mining companies. You can speculate while the hype is driving share prices up, but don’t get caught holding the proverbial bag.

      • Joe

        Very sage advice Nanalyze…..and I would like to underline the fact that the company I mentioned in my earlier comment, Durango….it is my opinion that it is a candidate for exactly that type of situation….if it goes up I expect it will be driven by hype, promotion and forward looking (and safe harbor protected) news.

        You have mentioned the Greater Fool axiom before…..that is how I am intending to play it, and hopefully I get out too soon with some nice profits. I always miss the top by a wide margin.

        • Nanalyze

          Thanks for all the input Joe!

          Any idea what the lithium price is today? We reached out to some contacts in the commodities industry to try and find out as we don’t know a source for this critical piece of information.

          • Joe

            Because Lithium isn’t a publicly traded commodity, as your articles have noted….its subject to contractual deals with suppliers. But I’m hearing current prices are as high as $15K USD p/tnne for carbonate in China, but that is likely for small orders. I think large scale orders that are on-going are more likely in the $7K-$8K range.

            A note on Durango…it looks like its going to break above a dime, and who knows….it might just make your $5 million Market Cap Threshold. Nemaska was just 17 cents per share when I first bought in last year.

  • Paul

    Any predictions on Galaxy? Seems to be rising more each day

  • guy de byl

    lithium is the hot thing at the moment and during the last few days I’ve made money on the Australian shares you mentioned. I just wish that I’d been alerted to those shares sooner. Does anyone know of any site that alerts people of companies that have risen steadily for perhaps 2 months, and could be the next hot thing. I got onto Bellamy’s baby formula and Blackmore’s vitamin hysteria and made good money there, but just wish that i had been alerted to their initial solid rises say over the first 2 months. i would appreciate any suggestions.

    • Nanalyze

      Your approach sounds like speculating, not investing. Investors will be left holding the bag inevitably wondering where their savings went. People who chase prices will inevitably end up buying at the top then holding until “it takes off again” and lose their investment. It’s good to hear you made some money but be aware that you are speculating when you buy penny stocks, not investing. Buyer beware.

  • Pierre

    I hear a lot of great thing coming up for Nemaska Lithium as the Johnson Mattew deal that is about to launch off really soon. What do you guys think of this NMX.V stock?

  • Randy Humt

    The best deposit and management of any junior lithium play is Houston Lake Mining. They have the richest grades , the cleanest ore , the widest zones of any deposit in Canada. The most experienced management team who’s CEO owns the largest drilling and blasting company in North America. There chief geologist came from Tanco , who produced lithium and tantalum for decades. All info is under “investor presentation” at houstonlakemining.com. They will also be in Las Vegas May 24 and 25 at the Lithium Show.

    • Nanalyze

      Thank you for the heads up on Houston Lake Randy!

  • Herb

    I do not know why analyst’s have not reported that lithium is also used in explosives. It is reported that it is very volatile [ unstable], hence the research in battery tech to stabilize. In explosives it is a catalyst. Lithium is one of 3 different atom that make up our sun.

  • you have the wrong country for Orocobre however you slice it. OROCF is a US ADR for a company listed in Australia. It also trades in Canada as ORL. But its primary listing is Down Under.
    Its lithium mine is in Argentina and it has a key minority shareholder, car company Toyota. I think it deserves a correct write-up. Our Latina reporter Frida Ghitis visited the mine before the Cristina Fernandez government lost the election and tipped it as a good long-term LI play’ Frida like all my writers is honest and paid by my firm, http://www.global-investing.com for what she comes up with. We fire people who pump shares

    • Nanalyze

      Thank you for the note Vivian and the clarification on Orocobre. Great to hear that you fire people who pump and we only wish all investors could recognize pumping and do the same!

  • Mark

    Many lithium juniors are at various stages of production: doscovery of the stuff, mining, refining, selling the final product. They seem to be transparent in this regard. Most are not selling the metal yet. It seems likely it will be on a commodity exchange sooner or later. I think the idea is the supply will trail the demand by a long shot with EV vehicles becoming not the exception but the rule. In other words one can speculate / invest in the stocks but, outside of hype marketing, it’ll be a wait to separate the players from the prayers among the miners.

    • Nanalyze

      Thanks for the thoughts Mark. Would be great if lithium can make it onto an exchange. Intuitively, the big-3 mining companies wouldn’t be supportive of that though.

  • Jim

    The world’s largest lithium producer Albemarle Corporation (ALB) hit a new 52-week high yesterday of $95.79 per share and is now trading with a market cap of $10.61 billion. Tesla (TSLA) announced two weeks ago that their Nevada Gigafactory has begun lithium battery cell production. As TSLA’s Gigafactory production ramps up big in the months ahead – the world is going to quickly face a major lithium supply shortage.

    ALB’s nearby Silver Peak is currently the only producing lithium mine in North America, so it is inevitable that ALB will soon be trading for well above $100 per share. NIA’s President believes that he has discovered a lithium stock that will make its members an absolute fortune in the weeks ahead as ALB continues to hit new 52-week highs!

    In the upcoming weeks, he expects the stock of Advantage Lithium (TSXV: AAL) to immediately explode from its current price of $0.92 per share to a new 52-week high of above $1.34 per share – followed by a move into the $2-$3 range!

    AAL’s Clayton NE Property is directly adjacent to ALB’s Silver Peak Lithium Mine Property and consists of 55 unpatented claims totaling approximately 1,080 acres (437 hectares). On November 1st, AAL began a major drilling campaign at Clayton NE and immediately intersected lithium-bearing brines on its first borehole. Less than one month ago on December 21st, AAL announced that its third Clayton NE borehole was its strongest to date, with peak values of 322 mg/l lithium, within 387.69 metres averaging 243.66 mg/l. These results were comparable to ALB’s brine samples from their immediately adjacent Silver Peak mining operation!

    Although we expect AAL to explode to new 52-week highs in the days/weeks ahead due to Clayton NE alone, the main reason NIA is 100% convinced that it will make a HUGE fortune on AAL in the weeks ahead – is the HUGE joint venture agreement they have entered into with Orocobre (TSX: ORL). ORL is the only junior lithium producer in the world! So far, it has revenue of only $15.53 million, yet its market cap is already $913 million!

    So that ORL can focus on ramping up production it has decided to farm out all of their key lithium exploration assets in Argentina to AAL! AAL and ORL have entered into a MEGA joint venture agreement to explore/develop ORL’s Cauchari lithium project, which hosts an inferred resource of 470,000 tonnes of lithium carbonate equivalent! It is located just 10-20 km south ORL’s flagship Olaroz Lithium Facility!

    AAL will become the immediate owner of 50% of Cauchari with the ability to earn up to a 75% interest in the project! Currently, AAL’s market cap is less than $50 million vs. ORL’s market cap of $913 million! NIA’s President considers this to be the lithium opportunity of a lifetime that will make its members very wealthy in 2017!

    • Nanalyze

      Any time we hear someone describe the potential of a stock using the word “explode”, we question the veracity of the messenger. Then when the whole diatribe ends with “opportunity of the lifetime”, we’re glad Jim came here to drop of that bit of wisdom so we can warn everyone to stay far, far away from whatever it is Jim recommends. You’ll have to go somewhere else to pump Jim. Not here.

  • Sim MH

    Hi
    There is this company in Australia by the name of Alliance Mineral Asset Limited which is under your radar.
    Thank You.

    • Nanalyze

      Thank you for adding to the list!

  • Tracy Hartford

    Nice article, thank you. I have personally found that when focusing on a market where macroeconomics of supply and demand suggest that there may be a pending deficit in the commodity in the near future; (Lithium in this case), many questions arise such as: What is lithium? What do I look at, for lithium mining? Is lithium a good investment? Attached is an article I found that’s short, but answers these questions http://bit.ly/2rmBETg

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