As the energy storage revolution gains rapid momentum, with ground zero in the state of Nevada, lithium exploration company Dajin Resources Corp. (TSX-V:DJI) (DJIFF) (Frankfurt A1XF20) is poised for long-term gains as lithium defies the commodities slump and gears up for an explosive spike in demand.
While other commodities flounder, Lithium emerges as the poster child for investors looking to gain a foothold in the next big game on the energy scene, carried along by already steady demand that is set to increase dramatically as Tesla’s (NASDAQ:TSLA) battery gigafactory comes online in Nevada, sparking a race to build battery manufacturing capacity that will render lithium one of the most prized commodities on Earth.
Most of the world’s lithium comes from Argentina, Chile, Bolivia, Australia and China, but American resources being developed by new entrants into this market have set up the state of Nevada to become the key venue and proving ground for the game-changing trade in lithium.
For several years, experts have been predicting a lithium revolution, and while investors were being coy at first, the reality of the battery gigafactories is now clear, and nothing has hit this home more poignantly than Tesla’s recent supply agreements with lithium providers who will be the first beneficiaries of this boom, followed by a second round of lithium brine developers that are climbing quickly to the forefront.
The newest entrant on this scene – Dajin Resources Corp – has two projects in Nevada, only a short distance from the only producing lithium mine in the U.S., and also in close proximity to another small miner who has recently signed a preliminary supply agreement with Tesla.
10 Reasons to Watch Dajin in this lithium resource game:
1. The lithium revolution in powering transportation and homes is just getting under way. This is only the early stages. Dajin has positioned itself right in the middle of Nevada’s lithium sweet spot, and when lithium supplies begin to slack in the face of spiking demand, Dajin will be ahead of the longer-term game here, with exploration well under way.
2. Dajin’s 3,800-acre Alkali Lake project is a strategically located lithium target in the booming state of Nevada, and is located just 12 kilometers from the producing Rockwood Lithium Mine, where surface sampling has already confirmed the presence of near-surface lithium in the enclosed basin, which is some 4,000 feet deep. And it’s 100% owned by Dajin.
3. Dajin’s 3,000-plus-acre strategic Teels Marsh project in the Mineral County desert lake basin—an area with a rich mining history--is only some 40 miles away from producing Rockwood and new exploration projects that have already signed preliminary supply agreements with Tesla. The company has already completed geoprobe work on this 8,900-foot-deep basin. It’s also 100% owned by Dajin.
4. Dajin is also advancing a third asset—in Argentina, one of the original ‘lithium triangle’ countries (Bolivia, Argentina, Chile), with its 100%-owned Salinas Grandes Salar in Jujuy Province. Some 70% of the world’s lithium currently comes from Argentina and Chile.
5. But right now, Nevada is the place to be because this is the front line of the North American lithium boom. More specifically, this is where lithium can be found in brines, the most cost-effective lithium on the market, which means it is exactly what Tesla and rival gigafactories are looking for. Nevada’s lithium will be a global game-changer.
6. There are very few American properties like Dajin’s, with an aquifer and a closed deep basin containing lithium.
7. With the lithium rush in full swing and Nevada the go-to state, public and private companies are rushing to stake their ground here and make strategic acquisitions. This means that land values are set to explode and that Dajin is sitting on golden property. Existing lithium players are also eyeing a bigger footprint, further boosting land values.
8. Dajin is an early entrant here, and this is critical for a number of reasons: land grabbing, takeout potential, off-take agreements, permitting, and exploration logistics, among other things. This means that Dajin is way ahead of any else who wants to get in this game. This is all a major de-risker.
9. This is a small cap company, and with small-cap companies in particular, we look very seriously at management because without stellar management, the best potential can be wasted. Dajin has strong management that elicit shareholder trust and have proven significant strategic foresight in terms of early entrance for high value creation.
10. Having lithium resources anywhere near a battery gigafactory is an instant value-booster. Dajin’s property is right in Tesla’s backyard. Just one of these gigafactories will need 15,000 tons of lithium carbonate a year just to get started—and the first is slated to come online as soon as next year. More than anything, though, grid storage and the powerwall will drive lithium demand through the roof, with General Electric (GE) predicting the energy storage sector to quadruple to $6 billion by 2020. Overall, lithium demand is expected to more than double from 2012 to 2017.
By James Burgess of Oilprice.com
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