Dundee Capital Markets: Buy rating and C$1.30 target for Western Lithium USA Corporation
Is (dot) gd/AkcfKD
February 24, 2015
BUY, Speculative Risk
Dundee target: C$1.30
High Purity Lithium Carbonate Produced as Initial Pilot Run Successful
We recommend Western Lithium with a BUY and C$1.30/sh price target.
Production of high purity, 99.8% lithium carbonate (LCE) from its first pilot plant trial run in Germany highlights one main thing - the plant works. Initial results help confirm the design parameters laid out in previous technical reports and de-risks the proposed flow sheet for its massive Kings Valley clay hosted lithium deposit located in Nevada. While the news isn't a surprise, this is the first time we are hearing of a battery grade purity product at demonstration scale. With the world watching construction of Tesla's Gigafactory in WLC's backyard, and more recently digesting rumors of Apple developing an electric vehicle (or driverless car), Western Lithium has become one of the premier lithium investments.
Pilot plant works. Less than 100 kg LCE was produced but management is touting quality over quantity at this stage. 75t of material at 12 tpd was calcined, with 5 tpd treated at the crystallization facility. Recoveries were in line with design at 85-90%. The pilot facility is designed to produce 72kg/day of LCE or 20t/year if operated continuously. Several tonnes of different products are scheduled.
Preparing for Round #2. Upgrading the plant, improving operating procedures and enhancing reagents are underway with a main goal of achieving the optimum phase chemistry (dropping the right compounds out of solution at the right time). Plant modifications including the addition of an automatic feed system and dust collection units to improve the leach circuit. Byproduct production of potassium and sodium sulphates (K2SO4 and Na2SO4) is hopeful during the next pilot run.
Li hydroxide studies underway. LiOH is becoming a preferred compound. Used in EV batteries, it is a key growth market with demand expected to increase 20%