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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (42120)	8/26/2009 11:39:23 AM
From: LoneClone	Read Replies (1) \| Respond to of 197257

Cobalt - A Unique Way to Profit from Lithium? investingsuccess.ca The Lithium sector of the junior resource market has seen huge gains in the last month. OK, let's not be coy. The Lithium space is experiencing investor mania. Look at some of the gains. Canada Lithium (TSXv:CLQ) is up 30% in a month on over 7 times its usual volume. Lithium One (TSXv:LI) up 300% in 2 months from 50 cents to $1.50, and First Lithium up 300% from 8 cents to 24 cents in just 1 week. Tell the world that you have a piece of moose pasture with Lithium on it and junior exploration companies will beat a path to your door in no time like a herd of stampeding cattle. The tipping point for this surge higher was a CNBC report aired on August 13 2009 that spoke about the brilliant future ahead for Lithium thanks to the growing demand for Lithium-ion batteries. This was followed by Barrack Obama giving $2.4 billion in stimulus money to the electric vehicle industry and Ontario Premier Dalton McGuinty offering up $16.7 million for battery research. But caveat emptor....buyer beware - these lithium stocks have gotten a tad too expensive too quick. Piling in to Lithium stocks at this juncture may invite trouble to your portfolio. But the growth in lithium is happening, with General Motors planning to unleash its new VOLT electric car in 2010, with Diamler AG having just acquired a 10% interest in electric car maker Tesla and with Toyota having recently announced that its 2010 model Prius will now use Lithium-ion batteries instead of Nickle-Metal-Hydride batteries. So what should investors do? Where can one find value? The answer may surprise you. Consider investing in cobalt. You see, what has been overlooked in this investor stampede into Lithium stocks is the notion that Lithium-ion batteries use cobalt in the chemical make-up of the battery. A Lithium-ion battery consists of a Lithium-cobalt-oxide cathode (positive electrode) and a Lithium carbide graphitic anode (negative electrode). One of the main advantages of a Lithium-ion battery is its high energy density. That is, a lot of charge can be stored in a small area. This is precisely why your laptop computer, your camcorder, your cell phone and your iPod all use Lithium-ion batteries. Combine this with the long run time and the notion that Lithium-ion batteries have no memory effect ( that is, they hold their charge for a long time once charged up), and you can begin to see the popularity of this type of battery. What really intrigues me is the recently announced move by Toyota to gravitate to Lithium-ion batteries. There are 3.2 lbs of cobalt in the Nickel-Metal-Hydride battery of an older model Toyota Prius. The lithium-ion battery in the new 2010 Prius will have over eight pounds of cobalt - more than twice the cobalt content of the older Nickel-Metal-Hydride battery. The new 2010 Toyota Prius with this lighter weight, more efficient Lithium-ion battery will save 70% of the braking energy of the car vs a 30% energy savings on braking with a heavier, bulkier nickel-metal-hydride battery. This means the miles per gallon will jump up from roughly 50 MPG to near 70 MPG. It’s hard to play cobalt directly, in that it is mostly a by-product that comes out of copper refineries and nickel refineres. But, there is one stock that represents an excellent way for value oriented investors to position themselves in this strategic metal. Geovic Mining - which trades on the TSX under the ticker GMC (and on the OTC market under the ticker GVCM). GMC is trading in the C$0.70 cent range right now. This price point places it at just over its cash value per share as the company has $60 million in the bank. As the Lithium mania has unfolded, Geovic has risen only from 60 to 70 cents. Daily trading volume was higher than normal which tells me this price move was all about the smart investors getting well positioned for what they feel will be a move higher. Geovic (www.geovic.net) has one of, if not the largest, primary cobalt deposits in the world in the African nation of Cameroon. On one of its projects, Geovic has a measured and indicated resource of 54.7 million tonnes at average grades of 0.25% cobalt, 0.69% nickel, and 1.33% manganese. A second nearby deposit has an inferred 154 million tonne resource. Smaller players in the cobalt space include Formation Capital and newcomer Puget Ventures. Formation Capital (FCO-TSX), continues to work towards getting its Idaho Cobalt Project (ICP) in Idaho,USA into production. This project contains 3.7 million tonnes of ore grading 0.559% cobalt and 0.559% copper. But, Formation cautions it does not know exactly when the US Forest Service will formally approve its Plan of Operations. Add to this a bizarre argument that Formation is having with Xstrata who owns an adjacent property and the picture gets even murkier. Until these issues are resolved, project financing will be hobbled. Formation’s stock has been in a very tight trading range around 35 cents, though volume is picking up. There are 240 million shares outstanding. Puget Ventures, (PVS-TSXv), aims to place an old cobalt mine – Werner Lake West - in northwestern Ontario, Canada, back into production. The Werner Lake West copper-cobalt mine includes historically reported reserves and resources (not NI 43-101 compliant) totalling only 1.1 million tonnes of 0.31 per cent cobalt, 0.29 per cent copper and 0.011 ounce per ton gold in all categories.The company says that with minimal additional work, a production decision could be made. After completing its current $3.5 million financing, there will be roughly 20 million shares out and $3.5 million in cash. We have now seen what the future prospect of more Lithium batteries has done for the Lithium stocks. As Lithium-ion batteries containing cobalt gain more attention - ask yourself - can the cobalt stocks be far behind?