About to strike.
It should be noted that commodity prices do fluctuate and caution should be applied to any investment decision here and not be based on spot prices alone. Seek professional financial advice before choosing to invest.
The chart below (also from UBS) shows that lithium production must rise by 2898% to meet the requirements once we see 100% electric vehicle use globally. This will translate to huge profit margins for lithium producers, which is why SEI are pushing ahead with its Chilean lithium projects with such gusto.
Electric battery materials demand
Tungsten operations: Mt Carbine Quarry and Mining Leases
On December 20, SEI announced that it had agreed to purchase the Mt Carbine Quarry and Mining Leases in northern Queensland. Shareholders appear to have been impressed with the news with the company’s share price taking off in the days after the announcement.
From the day of the announcement on December 20 the share price rose by 225% to close at 3.9 cents on January 5. It has since come back slightly to 3.5 cents today.
Speciality metals share price
The past performance of this product is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.
The announcement detailed that SEI had entered into a binding Heads of Agreement for the purchase of the Mt Carbine Quarry and Mining Leases, ML 4919 and ML 4867, with the quarry and leaseholder, Mt Carbine Quarries Pty Ltd. Owning the Mining Leases is integral to the successful development of the SEI’s Mt Carbine Tungsten Project.
The Mt Carbine project covers ~367 hectares, and is located 130 kilometres by sealed highway from the port of Cairns.
These Mining Leases sit within SEI’s Iron Duke prospect, where mapping and sampling have indicated extensive strike length. The new licences can be seen on the map below.
Iron duke prospect map
The deal will also provide SEI with an invaluable source of cash flow from the existing quarry business, while the associated quarry infrastructure also brings significant benefit to SEI in the development of its future mining operations.
The parties have agreed to have the Contract of Sale executed by mid-March 2018.
The purchase of these Mining Leases lets SEI extend its footprint at a time when demand for Tungsten continues to rise.
With the highest melting point of all metallic elements, Tungsten and is used to make filaments for incandescent light bulbs, fluorescent light bulbs and television tubes, as well as metal and glass seals.
Between January and September of 2017, tungsten APT (ammonia para tungstate) prices increased by 64%, reaching a peak of $316 per mtu. Prices have fallen back some since then but still remain elevated as the supply demand balance remains tight.
Global tungsten price
Factors that pushed the tungsten price higher include constraints caused by environmental inspections in China that disrupted production at mines and processing facilities. This led to higher production costs for tungsten concentrates, as well as uncertainty surrounding the military escalation in North Korea. Supply is expected to rise this year, but so is demand, are therefore keeping the tungsten price elevated.
Based in large part on tungsten’s recent price rise, SEI has engaged in preliminary discussions with several interested offtake parties. It is also investigating the viability of recommissioning and recommencing production at its Tailings Retreatment Plant.
The cash flow that will be generated from the successful development of the Mt Carbine Tungsten Project will enable SEI to take full advantage of improving market conditions.
Any future results, however, are purely speculative and investors should seek professional financial advice before making an investment decision.
The announcement was reported by Finfeed.com on December 20:
Mt carbine quarry purchase update
NSW gold exploration
SEI holds two gold prospects NSW: Exploration Licence 6648 – Crow Mt., located around 20 kilometres south-east of Barraba in northern NSW and Exploration Licence 8024 – Panama Hat, located 30 kilometres south-east of Broken Hill.
Surface sampling of old workings in Panama Hat EL8024 has confirmed consistency of high grade gold assays ranging up to 84.4g/t gold obtained in an earlier sampling, with the latest sample assays ranging up to 35.1g/t gold.
These sampling and surface geological investigations led to SEI concluding that there is significant potential for shallow, oxide gold mineralisation... that up till now has not been tested by drilling.
In an encouraging sign, SEI has a high level of ownership by company insiders at around 19.92%. This suggests that management is optimistic with regards to the company’s future. It’s also interesting to note that in the three months to the end of December 2017, the company has seen significantly more insider buying than selling.
SEI management’s immediate focus is positioning the company as a low-cost lithium producer, using its key geological insights into the discovery of lithium brines. The company is also busy progressing its northern Queensland tungsten exploration programme.
With a new name and a rejuvenated focus, and with a focus on commodities that are experiencing supportive supply-demand scenarios, we can expect plenty of news flow from SEI in the months ahead and possibly a further lift in the share price.
Have you heard about Raisebook?
Joining Raisebook will give you free access to opportunities not normally available to general retail investors – however you must qualify as a sophisticated investor under Section 708 of the Corporations Act.
These opportunities are as diverse as stock placements, seed capital raisings, IPOs, options underwritings. Plus a whole host of other high risk, high reward investment opportunities not available to the general public (careful – this stuff is high risk!).
Are you a sophisticated investor?
Please note: Raisebook is a related entity of S3 Consortium Pty Ltd as defined in Section 9 of the Corporations Act 2001.
S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of Maven Capital Pty Ltd (AFSL No. 418504). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.
Conflict of Interest Notice
S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.
The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.
Speciality metals asx
Be alerted as soon as an article is released - Join our mailing list
Interested in more investment opportunities? Check the box to receive ALL our alerts
SEI eyes Lithium production in northern Chile
During 2016, Speciality Metals International Limited (ASX:SEI) (then CNQ) begun exploration for lithium in Chile. SEI was granted five exploration concessions in Salar de Miraje in 2016 and has since expanded its lithium exploration with the granting of five exploration licences at Salar de Bellavista.
This land is situated nearby existing infrastructure, and is close to the Pan American Highway and lithium processing infrastructure at the port of Antofagasta.
Here is a map of northern Chile, showing the location of Salars de Miraje and Bellavista:
Chile lithium tenements
Exploration has been carried out in several salars for resources contained within subsurface brines that may include potassium, iodine, boron, lithium and other valuable minerals.
SEI’s foray into lithium exploration has focused on salars, which are basins with internal drainage, that are geologically older but at a lower topographic elevation than the salars where lithium is produced by evaporation of brines pumped from the subsurface. This decision was made as evaporation at the lower elevations will likely mean lower operating costs if SEI’s exploration for lithium brines in the salar is successful.
At Salar de Miraje four salt crust samples produced lithium values ranging from 51 - 94ppm, with associated boron and potassium ranging from 1060 -1920ppm boron and 0.18% to 2.35% potassium.
Strongly anomalous lithium and boron values have been obtained from surface sampling of salt crusts and brines in surface depressions in the area surrounding the Salar de Bellavista and the adjacent Salar de Miraje concessions where SEI has already been granted five exploration concessions.
Of the ten salt crust samples taken in Salar de Bellavista during SEI’s initial research and reconnaissance in 2016, all but two were anomalous, containing from 50 to 274 parts per million of lithium. Of these, four had associated elevated boron values ranging from 850 to 1820 parts per million of boron.
On January 11 2018, SEI announced that it had been granted five additional exploration concessions over a key area of Salar de Bellavista have been granted by the Chilean courts.
SEI is now arranging for the transfer of these exploration concessions into its wholly owned Chile-based subsidiary, Special Metals Chile.
These concessions cover a significant portion of the western part of Salar de Bellavista, in a situation tectonically analogous to, and north-west of, Salar de Atacama in Northern Chile.
This is an area where just two companies produce a third of the world’s lithium from brines. These companies are the world’s largest lithium producer, SQM S.A. and multi-billion dollar-capped Albemarle Corp.
Salar de Atacama lithium
Salar de Bellavista is at an elevation of 1000 metres, at which elevation evaporation is expected to be year-round and faster than at Salar de Atacama (elevation of 2000 metres). Except for this difference, the salars that are the focus of SEI’s exploration are geologically similar to those already producing lithium or that are known to contain lithium resources.
SEI’s target salars appear to be fed in part from hot springs, and the evaporite minerals already produced from the target salars (nitrates and borates) indicate the typical salar closed hydrological basin dominated by evaporation. Additionally, the host sediments within the target salars are identical to the sediments that host the lithium brines at higher altitudes, and consist of evaporative carbonate-dominated sediments.
Further details of these five new exploration concessions can be found in the following Finfeed ( a related entity of S3 Consortium Pty Ltd as defined in Section 9 of the Corporations Act 2001).
Speciality metals finfeed coverage
Details of a targeted exploration programme could be announced within a week. SEI noted the encouraging results from its initial research and reconnaissance in 2016 as reason to expect it to soon proceed with exploration at this second set of concessions in Chile.
SEI is also in advanced stages of an application that has been lodged for an additional 15 concessions within the nearby Salar de Pintados.
SEI’s decision to further its lithium ambitions in Chile appear to be a wise strategic decision. According to the Oil & Gas Investments Bulletin, investment bank UBS say that lithium prices will stay high through 2024 as the lithium supply chain struggles to keep up with rising demand created by the rapid growth in electric vehicles.
I bought in based on the purchase of Mt Carbine Tungsten and becoming cash flow positive later this year.
this Im told will be used to prove the Lithium Tenements In Chile without much if any CR,s . also they expect to increase the resource size at Mt Carbine once ownership is complete in July ...I think it has some real Potential adds/horse.
Hi adds I have not spoken to much to any BOD member.
I have sussed out the Mine and it appears not much to get it producing again.
their tenements in Chile at this stage look highly prospective and are a bonus.
I will keep buying a few this month at a rate not to spook the market.
the share's on issue are also within a good range about 500 ml.
I never blame anyone for my investment mistakes , I learn from them and move on.
Do not worry adds this will bounce soon and it should bounce hard..I think expectations of production has people just waiting ,in particular fund managers and Insto,s ..they will want certainty of Mining first.
Today's news really was just that a piece of news we already knew.
tow ways to go here step to one side as you suggest or average down a little ...I'M for the average down, some punters maybe positioning their selves to sell prior to TAX time then buy back in the New Financial year, if they do it now the Tax man will not take to much notice , if you leave it until mid June they will ask questions.
So I am on record for the other Idiots who Troll my self and others....
I have now Purchased 1.5 ml in SEI
my average is now 2.25 cents ........if this stays around or below 2,2 I will pick up more if it falls I will pick up more in the hope my average ends up at 2.0 cents for this to happen I would need to buy 1 million at 1.85 to 1.9 cents , I don't like my chances .