Lithium for the “Hungry Red Dragon”

Part two of a look at Oxford Resource Explorer's lithium teaser pitch

By Travis Johnson, Stock Gumshoe, July 26, 2017

I went into a lot more detail on the David Fessler’s teased “ultra-lithium” company on Tuesday, but there was also some curiosity about the second lithium stock he hinted at in those ads for his Oxford Resource Explorer, so I’ll take a quick look-see at that one as well.

If you want to go back and start at the beginning and read my more exhaustive blather about the lithium market, just click here for that piece.

Go ahead, we’ll wait.

Ready? OK, here’s what Fessler says further down the ad:

“I’ve also found another play to help you pocket substantial gains from the lithium megatrend…

“Fourfold Demand From the ‘Hungry Red Dragon’ ….

“… in early 2016, spot prices in China for battery-grade lithium leaped 196% higher in just six months.

“In other words, the price nearly tripled in about half a year.

“It’s just the start of China’s lithium supply shortage, which is setting up to become one of the biggest gaps in history, dwarfing every other commodity crisis.”

OK, so what’s the stock? He implies that his previous teased company, which we now know was Orocobre, “is going to take care of America’s massive lithium needs,” and that this other stock, which is Australian, is going to benefit from China.

Which is a little silly, it’s a global market and companies sell where they get the best price — though Australian lithium does have a nice transportation advantage over South American lithium. Orocobre has talked about shipping lithium carbonate to Europe and Asia, I don’t know if they’ve shipped any to the United States, and their joint venture partner, Toyota Tsuho, has first purchase rights (Toyota Tsuho is the trading arm of the Toyota conglomerate, one of their jobs is to source raw materials — about a third of the company is owned by a combination of Toyota Motor Corp. and Toyota Industries), so their production is much more likely to be headed to Japan and China than anywhere else… though Toyota, of course, manufactures around the world (and has talked about building additional lithium ion battery plants in both Asia and North America).

But silliness aside, who is this other company?

“They Wisely Loaded Up on a Resource No One Wanted…

“This company holds all the rights to a mine site in Western Australia, a relatively close distance to mainland China….

“They saw this lithium shortage coming, and they bought up the rights to one of the best production sites in the world on the cheap, back when no one else wanted it….

“Their traditional “hard rock” mine is already up and running… and on January 2, 2017, the company proudly shipped about 10,000 tonnes of lithium to Lianyungang Port in China.

“Better yet, it’s on track to up production to 160,000 tons in 2017. At full capacity, the mine could produce more than 1.6 MILLION tons of lithium per year.”

OK… any other clues?

Sure, here’s one:

“This company has large resources, a new mine and other new projects in t