The Newswire

Your daily serving of financial goodness

Could this Lithium IPO Become the Next Galaxy Resources?

Could this Lithium IPO Become the Next Galaxy Resources?
Much of the global lithium supply comes from Chile, Argentina and Australia, but one of the most promising regions in the US is Nevada, which hosts America’s only operating lithium mine, Silver Peak.
Feb 21, 2017 By Simon Herrmann Tags: IPO, LI3

Lithium is a key ingredient in batteries to store solar power and to drive electric cars. Demand for lithium is increasing dramatically worldwide thanks to companies like Tesla which recently commenced construction of a lithium battery ‘Gigafactory’ outside the city of Sparks, Nevada. It is projected to produce more lithium ion batteries in 2018 than the entire world has produced in 2013.

Much of the global lithium supply comes from Chile, Argentina and Australia, but one of the most promising regions in the US is Nevada, which hosts America’s only operating lithium mine, Silver Peak.

An Australian mineral exploration company has acquired more than 100sq km not far from this mine and is now raising capital to systematically explore these assets. Could this company become the next Galaxy Resources, the West Australian-based lithium producer that was one of the best-performing ASX stocks in 2016?

Lithium Consolidated Mineral Exploration Limited, or LCME, seeks to raise between $5m and $8m to list on the ASX in March. Over 50 per cent of the funds will be used for drilling, predominantly in in the 80 per cent owned Tonopah Lithium Project in the Big Smokey Valley, Nevada.

Near-term drilling activities are designed to demonstrate the commercial potential of the company’s Nevada assets and any significant discovery would validate LCME’s exploration strategy. Located close to a mine that has been producing lithium for over 40 years, the location appears strategically favourable but a maiden resource estimate is required to confirm the grade and scale of the deposit.

As new supply is coming slow to market, lithium prices have experienced a ‘price boom’ and there is a risk that this could represent a cyclical peak. However, LCME is looking to take advantage of this ‘hot sector’ and exploration success will be the primary value driver for this IPO.

ASX Code: LI3
Shares on Offer: 25m - 40m
Listing Price: $0.20
Market Capitalisation: $17.7m - $20.7m
Listing Date: March 17

Share this article

Simon Herrmann Author: Simon Herrmann Feb 21, 2017

Simon is a financial analyst at independent research firm Wise-owl who wants to change the world by disrupting the cliché approach to investment decision making with convergent thinking. Wise-owl’s goal is plain and simple: Find the best opportunities for our members by following a proven methodology and to create long-term value through high-quality advice, innovation, technology and education. We combine industry experience and the agile mentality of a start-up. Wise-owl is the future of stock market investing.


Interested in IPOs? Bid directly here:

Loading...
Disclaimer: Clicking on this link will take you to a third-party website. We do not control or give advice regarding the content or links that appear on these sites and Wise-owl accepts no responsibility or liability in respect of any third party materials. Wise-owl may earn a commission from any product or service from third party websites.

Northern Cobalt banks on lasting cobalt boom

Northern Cobalt Limited (ASX:N27) is the latest cobalt exploration company to list on the ASX. Seeking to raise up to $6 million, should investors consider this junior explorer?

Author: Simon Herrmann Aug 07, 2017

Errors

Sign Up for Free Trial
Subscribe
Recent Tweets
Recent News