Lithium, Cobalt and Gold: Three Elements Fueling Tech Innovation are all front and center for miners in Argentina
There’s plenty of junior mining companies trying to get in on the Energy Metal hoorah these days. In any given week, we probably review over 100+ of these types of companies, because let’s face it, the Sector is hot, it’s only going to keep growing, and when you get in on a promising junior play, the profit margins are astronomical, for little risk…
There is one problem though, and it’s quite a big one. Most companies don’t meet our criteria, many have nothing more than a land claim! For that reason, very few companies in that space end up here, but thee ones that do, tend to show some pretty fancy returns in a relatively short time frame, which is exactly what we like, and probably exactly what you are looking for as well.
Keeping the above in mind, our research and due diligence has isolated what we believe to be a relatively ‘easy’ play. Take a look at: Marifil Mines Limited which trades on both the Canadian and U.S. exchanges (TSX.V: MFM // OTC: MFMLD).
Marifil is a junior resource company, that has been building towards a profitable future in resources that is suddenly burning bright as they hone their focus in Argentina to bring in the lithium, cobalt and gold resources that are making a fortune for successful miners. Again, I urge you to look at this company. The share structure, price, and sector is very well positioned, as we will explain below.
We don’t just pull these out of a hat, we have a very specific model, and a ton of criteria before something ends up here, let us explain further:
Electric cars, smartphones, and renewable batteries all need one thing to work well and that one thing relies on two very specific elements. That one thing is a lithium-ion battery and those elements are Lithium and Cobalt, as we all have come to know.
These batteries are in very high demand by high-tech, industrial, and research-focused businesses the world over. As governments push for renewable energy sources over coal or oil, the need for more and better batteries and battery arrays isn’t going away anytime soon. At the same time, consumers are driving massive growth in the high tech battery-powered devices market, as well as the Electric Vehicle or EV industry.
In all of these applications, the need for both lithium and cobalt is increasing at an exponential rate.
But what about gold? Well, if as those same battery-powered devices and systems get more advanced, gold is being used to create the memory chips and other supporting components of the devices that are running most everything. [1]
And while the demand for gold may be smaller in technology, it’s still a growing market.
Further, gold is a “staple” precious metal with an established value. It may not be surging at the moment, but it’s a solid element for any mining focused developer, especially as a compliment to say lithium and cobalt.
So for a company looking to expand its opportunities in this upwardly trending market, it’s not hard to pin down the emerging hotspot for these elements.
The place is South America, to be certain and hot on the charts is Argentina for several reasons.
That’s exactly where Marifil Mines Limited has placed its emphasis for the new mining era.
Marifil Mines: From Broad Scope to Intense Focus
Marifil Mines Limited (TSX.V:-MFM // OTC: MFMLD) has, in the past, stretched their focus attempting to go after a number of elements and base materials as they progressed. While this scattershot approach may have spread out their efforts, the wide net it cast has served to set them up in a prime position to capitalize on the current mining conditions in Argentina.
Marifil Mines, headquartered in Canada, is now on a new path- one that focuses their broad range of resources on a limited scope of high-value elements. Above all else, MFM has a solid business structure. As of the end of 2017, much of their outstanding debt has been consolidated and they are under the leadership of a new CEO. With all of this change, MFM is taking their new direction seriously.
Marifil Mines Limited is a junior mining company. This means that their focus is on acquisition, exploration, and evaluation of mining properties- the earliest (and often most profitable) stages of the mining process. When a valuable site has been identified, MFM will look to develop and/or do a joint venture with a large mining company for follow-through of the mining process.
An Advantage in Argentina with Near Perfect Timing
Marifil didn’t decide on its new focus by chance or by simply choosing something that’s popular- they realized that although their previous strategy hadn’t hit a home run, it had done an important thing that they could use to their advantage. During the last few years, Marifil had been steadily acquiring territory in Argentina.
Now, Argentina is is becoming a focus of the lithium mining industry.
The attitude toward mining in Argentina has changed drastically in the last few years. South America, specifically the countries of Chile, Bolivia, and Argentina, is the most promising site for mining these modern-necessity elements.
This region, nicknamed the “lithium triangle”, may hold as much as 70% of the world’s lithium reserves. While Bolivia and Chile aren’t making any moves to increase their attractiveness to mining companies, Argentina is taking major steps and blazing a path that’s creating opportunities. [2] [3]
The biggest changes in Argentina’s policy all stem from one place: the recently elected Mauricio Macri. Under this new leadership, policies that were once meant to hinder the mining industry and foreign investors and disappearing. At the same time, legislation that was once unclear and varied wildly from province to province is being normalized.
In short, Argentina is opening up to mining in a big way, providing an excellent opportunity to anyone willing to get involved.
MFM already has their foot in the door in Argentina and has for a number of years. So now, that position is promising to pay off in a big way.
To give you a better idea, Marifil Mines (TSX.V:-MFM // OTC: MFMLD) has been in Argentina for over 15 years. This is driven largely by their top level management on the ground. At the core, the company’s head Geologist and QP (Qualified Person), Dick Walters was one of the first foreign prospectors in Argentina and was a founding member of Yamana Resources. That small company ultimately became Yamana Gold – now an $11 stock with a $4 billion market cap.
Walters has spent most of the last decade scouting the Argentinian properties that now form the company’s backbone.
MFM’s status as a junior mining company and their experiences in the area give them a keen advantage when it comes to minimizing risk, especially now that the government is on board with mining reformation.
Argentina is attempting to position itself as the world’s leading lithium producer. By 2020, they forecast an annual capacity of 165,000 tonnes. They can’t do that without the support of talented mining companies – especially juniors.
Currently, Marifil has in excess of 152,000 acres slated for their lithium efforts, they also own an additional 887 acres for cobalt exploration, as well as right to mine nearly 92,000 acres for gold. As they have recently raised a significant amount of capital to support their mining efforts of these three key elements, those numbers may soon change.
Lithium, Cobalt, and Gold: A Mining Emphasis
Gold is a highly efficient conductor. As the use of solid-state electronics and similar components increases, gold demand will, too. Lithium and cobalt, on the other hand, are currently needed most in the production of lithium-ion (Li-ion) batteries. Each of these is comprised of roughly 3 parts Nickel to 1 part Cobalt and 1 part Lithium, as well as a minor amount of aluminum. In most formulations, there are no viable substitutions for any of these parts.
Lithium
Investing in lithium is the hot topic at the moment. Most people at least have a passing knowledge of its applications and necessity in creating many of the devices that power modern life. The vast majority of lithium demand is driven by the electric vehicle market. EV production is further estimated to increase by as much as 30-fold by 2030 with nearly 25 million vehicles produced. That’s a lot more batteries than we have now. The question is, can lithium supply keep up with demand? The answer: Probably not.
In recent years, just the rumor of a lithium shortage caused the price to nearly triple, in the face of an actual shortage it could do much more than that. At the same time, Argentina, where Marifil has so strategically positioned themselves, is set to be the single largest produces of the element in the world. [4]
Cobalt
There’s already a cobalt shortage and as demand for Li-ion batteries grows, it’s not going to get any better. This goes to show how high the demand for cobalt is, and just how important Argentina opening itself up to greater mining possibilities is an exceptional opportunity, especially for anyone with boots on the ground already.
Marifil Mines is certainly at the very top of this category. In fact Marifil has one of the only cobalt properties in Argentina. That property is one of the largest nickel deposits in Argentina.
In order to secure a supply, EV and major electronic producers including Tesla and Apple are looking to buy directly from mines, cutting out middlemen. They have also discussed tentative plans to secure personal supply lines or stockpile the element in case of a long-term shortage. With the current demand and estimates only growing, neither of those propositions is outlandish.
As cobalt demand swells and production struggles to keep up, substitution and recycling efforts have increased. Recycling capacity and production of cobalt may reach as much as 22,500 tons in 2015, a significant amount but nowhere near the projected global demand of more than 50,000 tons, conservatively. [5] [6]
Gold
Investing in a mining company with an interest in gold is really a hedge against gold itself. This may be part of the reason that MFM has gold as a focus in their strategy- it’s a staple in many industries, with many high-value uses and applications. It’s also been a safe haven investment in geopolitical upheaval.
The demand for gold may not be surging at the moment and there may be no looming shortage, but it’s still a highly valuable precious metal. It’s also relatively stable, as a product, and found in similar areas to cobalt.
Gold is a real emphasis for Marifil in Argentina. Their Las Aguilas prospect is an advanced stage epithermal deposit showing significant mineral deposits over 92 patented mining claims in a very favorable mining region. If Marifil were to list its assets in terms of priorities, you would have to say that Las Aguilas and its gold prospects rank as a flagship for the company.
Will Li-ion Batteries Be Replaced?
Yes, the recent high demand for all three of these elements has been tech-driven. As is the case with any technology, it could always be replaced and at the current pace of technology innovation, is it possible that lithium-ion batteries and other lithium and cobalt-based tech will be replaced in the next decade? Experts say no.
Even with all the pressure to find a substitution as cobalt’s supply problems increase, finding an element that can do everything that nickel does for the battery and technology industry, and something that works with it as well as cobalt may very well be next to impossible. The best they can hope for is a reduced cobalt formulation. Still, there will be shortages. [7]
In fact, even though the pressure to find alternatives to these elements in battery production is incredibly high, experts predict that the elements are more likely to run out before we find a solution to that particular problem. Even recycling currently produced batteries is a long shot due to how different the manufacturing process, design, and formulation for each battery can be. While that might be a dreary thought about the future, it’s a good sign for investors looking for a less risky, long-term investment. [8]
Feature Stock: For Comparison
Marifil Mines Limited
(TSX.V:-MFM // OTC: MFMLD)
Market Cap: ~$11.382M
Marifil Mines Ltd. engages in acquiring, exploring, and evaluating mineral resource properties in Argentina. The company primarily explores for gold, silver, indium, copper, potash, nickel, phosphate, zinc, sulfur, limestone, platinum, palladium, cobalt, lithium, and lead, as well as oil and gas. It has a portfolio of properties totaling approximately 450,000 hectares within 8 provinces of Argentina.
Sector Stars: Mining Companies Making It Lithium Lead Efforts
There is currently no company quite like Marifil Mines when it comes to specialization and positioning in the resource sector in Argentina. There are, however, successful companies looking to take advantage of the current position of lithium and cobalt, as well as those just entering the Argentinean region. These offer great examples of the potential for miners developing in this unique scenario.
Sociedad Quimica y Minera de Chile
(NYSE: SQM)
Market Cap: $12.554B
SQM is a Chile-based mining company with a specialization in lithium (in fact, they are currently the world’s largest lithium producer), but hold no stake in the cobalt area as yet. They also deal in plant nutrients and iodine production.
Recent Headline: SQM Posts 4Q profit
Nemaska Lithium Inc
(TSE: NMX)
Market Cap $552.49M
Nemaska focuses on all viable forms of lithium for electronics, batteries, and industrial applications. It owns 100% interests in the Whabouchi property that consists of 33 claims covering an area of 1,716 hectares located in the Eeyou Istchee/James Bay area of Quebec province; and the Sirmac property, which comprises 24 mining claims covering an area of 1,101 hectares located to the north-west of Chibougamau.
Recent Headline: Nemaska Lithium Announces the Completion of the Sale of Sirmac Lithium Property to ABE Resources
Lithium X Energy Corp.
(TSE: LIX.V)
Market Cap $258.72M
Lithium X Energy Corp. operates as a lithium exploration and development company in Argentina and the United States. Its principal property is the Sal de los Angeles lithium-potash brine project comprising 8,854 hectares area located in Salta Province, Argentina. The company was formerly known as Royce Resources Corp. and changed its name to Lithium X Energy Corp. in November 2015. Lithium X Energy Corp. was founded in 1997 and is headquartered in Vancouver, Canada. As of March 12, 2018, Lithium X Energy Corp. was taken private.
Recent Headline: Lithium X closes the Orocobre Agreement acquiring 100% control over the Diablillos Basin Brine
Orocobre Limited
(ASX: ORE)(TSX: ORL)
Market Cap: $ 1.54B
Orocobre is a lithium supplier and boron producer. Its flagship project is the Salar de Olaroz lithium project located in north-west province of Jujuy. They have a widespread presence in South America. Orocobre Limited is based in Brisbane, Australia.
Recent Headline: Cauchari JV Drilling Update
NEO Lithium
(OTC: NTTHF) (TSX.V: NLC)
Market Cap: $218.503M
NEO Lithium is an established lithium explorer focusing on lithium-brine projects in several countries worldwide. They have achieved tremendous growth in the last few years with an important project base in Argentina.
Recent Headline: Neo Lithium Discovers Deep Aquifer with High Grade Lithium
Argentina Is Vying to Be a Mining Superpower – Marifil Mines is Perfectly Positioned To Ride The Wave
A rising tide may lift all boats, but that lift may do more for a well-positioned mining company than one just trying to get in the door. The simple fact is, Argentina is now the place to be for lithium mining and offers strategic advantages for cobalt and gold as well.
Argentina’ mining sector is expanding rapidly, fueled by the demand for pure lithium and the battery metals needed to power the revolution taking place in power storage and the EV markets.
In addition to being in one of the best strategic positions just as the EV, Li-ion, and mobile technology markets are eating up the current supplies of lithium and cobalt, MFM has recently undergone a few drastic changes inside the company. They include hiring a new CEO to bolster the company as it drills down into what should be its core focus: lithium, cobalt and gold.
In order to fund this new trajectory and put the company on more stable financial footing, Marifil has settled a considerable amount of outstanding debt and recently raised $2 million in private placement funding as of early 2018. That money will help fund a host of new efforts into exploring and evaluating potential mines for these highly profitable elements. [9] [10]
Marifil Mines Limited is well positioned in one of the best areas in the richest South American region for its targeted mining activity. With the Argentinean government now getting on side with the mining industry and pushing for its growth, MFM is perfectly aligned to take advantage of growth in all three of its key focus areas.
Successfully bringing on a resource in any one sector (lithium, cobalt or gold) would make Marifil a very, very worthwhile prospect. Clearly, Marifil is not content with a “one hit wonder”, and so look for significant news from all three of their resource prospects as Argentina continues its rise on the world resource stage.
Editorial Staff
USA News Group
Sources:
1 – https://www.scmp.com/business/commodities/article/2123037/gold-consumption-expands-first-time-2010-because-rising-use
2 – https://seekingalpha.com/article/4115162-lithium-investing-roads-lead-argentina
3 – https://www.hgomezgroup.com/2017/05/23/mining-in-argentina-overview/
4 – https://www.bloomberg.com/graphics/2017-lithium-battery-future/
5 – https://slate.com/technology/2018/02/apple-may-buy-cobalt-directly-from-mines-fearing-a-shortage-in-the-future.html
6 – https://www.bloomberg.com/news/articles/2017-12-18/how-batteries-sparked-a-cobalt-frenzy-and-what-could-happen-next
7 – https://www.govtech.com/fs/transportation/EVs-Tech-Have-a-Cobalt-Problem.html
8 – https://www.scitecheuropa.eu/scenario-2050-lithium-and-cobalt/85396/
9 – https://marifilmines.com/news-releases/
10 – https://www.stockhouse.com/news/press-releases/2017/11/10/marifil-mines-announces-new-ceo-private-placement-and-settlement-of-debt
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