Strategic Asset Leasing Inc (fka LEAS)

[Rustler]

MMTE, LITHIUM & LIES…

The real truth?

INTRODUCTION

Today, the lithium used in commercial and technical products are produced from lithium bearing brines and/or minerals (left by evaporating the brine water or extracted via hard rock mining). “Lithium enriched brines are mainly harvested and processed in Argentina and Chile where they are partly exploited as a by-product of potash production.” DORFNER Analysenzentrum und Anlagenplanungsgesellschaft, Strategic Minerals, “Lithium” (2011) @ http://www.anzaplan.com/strategic-minerals . A primary use of lithium involves lithium’s ability to act as a medium in the creation of commercial and technical grade chemicals required by increasingly sophisticated technologies. In order to produce such lithium chemicals from the lithium mines’ evaporated, powdery white mineral compounds (i.e., lithium ore), conversion to lithium carbonate or lithium hydroxide is required. Hydrometallurgical processes are required to separate or “release” the lithium from the raw lithium ore mineral compounds. Id. Lithium also proves useful in batteries, aluminum processing, air condition, glass/ceramics, lubricants, and as a medicine to treat schizophrenia. See, e.g., Yinon Bentor, Chemical Elements, “Lithium” (2009). Processing lithium ore into commercial grade lithium for these uses typically involves refining the lithium ore compound to remove everything but lithium chloride and lithium spodumene; pure lithium is then “released” in the refinery by passing an specific electric charge through melted lithium chloride or lithium spodumene. Id.




FROM GROUND TO GRADE

As shown below and as shown in the various non-iHub authority sources cited, MMTE must successfully complete mammoth tasks involved in moving the trace lithium in the ground or brine water through the requisite process to produce Commercial or Techinical Grade Lithium so that ... some day far in the future ... the company might actually sell (or otherwise make money from somehow extracting and providing) Commercial and/or Technical Grade lithium to end-users. These formidable, challenging, and expensive tasks facing MMTE include, e.g., the following eight mandatory phases.

(1) Find and bring-in a number well-trained, experienced lithium mine engineers/supervisors and/or merge with a real mining company interested in working on the relatively tiny lithium salar claims purportedly held by MMTE;



(2) Survey and create a detailed surface mine site division map;



(3) Concurrently conduct extensive geotechnical tests to map the lithium-rich portions (i.e., lodes) of the mine site in preparation for targeted, long-term lithium ore extraction (“ore” meaning both the brine water and the cream-colored, powdery, mineral compounds left after evaporating the brine water);



(4) Mobilize and prepare both crews and equipment from where ever they are now (e.g., in large, coastal Chilean cities) to the remote mining sites deep in the Chilean deserts;



(5) Start and continue extracting mass amounts of lithium ore (among the most expensive part of this entire process);



(6) Transport the thousands of tons of lithium ore to the concentrators, evaporators, processing plants, refineries, etc., required to extract, isolate, and collect commercial or technical grade pure lithium (further, if such facilities are not already available, MMTE will have to pay for and build them);

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(7) Finalize refinement of the lithium to Commercial or Techinical Grade. Then, prepare the lithium for transport to the end-user or growing commercial market by packaging it and preparing it for shipment, e.g., encasing it in protective mineral oil, packaging it in chemically compatible protective material, or shaping into pellets covered by lithium hydroxide - all to prevent the rapid tarnishing and/or decaying effects that refined lithium suffers in Earth's atmosphere; and/or

(8) Transport the the delicate, highly sensitive, Commercial or Technical Grade lithium to the small, but growing, open market.



See, e.g., Associated Newspapers, "In Search of Lithium: The Battle for the 3rd Element," (April 2009) @ http://www.dailymail.co.uk/home/moslive/article-1166387/In-search-Lithium-The-battle-3rd-element.html ; SQM, "Lithium Production Process" (2011) @ http://www.sqm.com/aspx/about/ProductionProcess.aspx ; Rio Tino Mining Company, "Surface Mining Virtual Tour" (2011) @ http://www.kennecott.com/visitors-center/take-a-virtual-tour .

BIRTH AND GROWTH OF A SUCCESSFUL START-UP LITHIUM MINING PROJECT

So what does it really take to move a lithium-mining project from ground to grade? The following exemplifies what is required of a star-up lithium mining company regarding time, costs, etc., to move the lithium from the ground to commercial or technical grade.

[i]The Sal de Vida Lithium Mine Project
Sal de Vida, a developmental lithium deposit and mining project by Lithium One, has emerged as one of the highest grade undeveloped lithium brine deposits in the with significant expansion potential. “ The systematic evaluation of the Sal de Vida Brine Project continues according to the $15 million work program approved by the Company and its Korean Consortium partners, LG International, GS Caltex and KORES. Lithium One expects to deliver a [resulting] preliminary economic assessment (“PEA”) in the third quarter of 2011 . The Sal de Vida PEA will model the economics of a conventional evaporation recovery circuit for lithium and potash, using data collected from the drilling programs, pumping tests, evaporation circuit and pilot plant work, and other engineering and process studies that are underway or already completed. The PEA will be followed by the feasibility study by the middle of 2012, and if positive, progress to low-cost commercial production of lithium and potash in 2014. ”

Yes – that’s about three years from the preliminary project assessment phase – which photo evidence shows that MMTE has yet to begin on any of its purported lithium properties – to the point of actually beginning to produce refined, marketable lithium!

“Lithium One is now engaged in [1] resource upgrading, [2] pilot-plant process refinement, [3] pump tests, and [4] other work as part of the preliminary economic assessment on track for Q3 of 2011 and the feasibility study in the first half of 2012. The flagship Sal de Vida Lithium-Potash Brine Project is rapidly advancing to be a near-term producer of low-cost lithium and potash.” The project is located in the Lithium Triangle at Salar del Hombre Muerto in Argentina. Lithium One controls 100% of the brine mineral rights on more than 38,5002 hectares covering the majority of the eastern half of the Salar del Hombre Muerto. An astounding 60% of the world's annual production of lithium comes from brines of Salar de Atacama and Salar del Hombre Muerto, both in – and the kings of – the Lithium Triangle.

Sala de Vida Lithium Mining Project Timeline


See, e.g., Lithium One,Projects, “Sala de Vida” (2011) @ http://www.lithium1.com/s/SaldeVida.asp ; Montgomery & Associates, Completed Lithium Resource Estimate Report for Sala de Vida Project @ http://www.lithium1.com/i/pdf/Technical_Report_43-101_FINAL_R-April-2011.pdf ; see also Sala de Vida Project Photos:















SO WHERE IN THE TIMELINE TO $$$ IS MMTE NOW?

Currently, MMTE reports that it continues to acquire lithium mining "land" and extraction "rights." So orienteering ourselves from the above eight phases of a creating a successful lithium mining operation from the deserts of Chile, MMTE appears to have NOT YET started Phase One! “Mammoth Energy Group Inc. specializes in acquiring [purportedly] lithium-rich sites. MMTE's mid- to long-term strategy is to become a leading supplier of alternative energy. Yet, it has a long way to go before turning its idea into reality. Although MMTE has become more diligent in carrying out its financial policy, its latest report shows how fragile the company is. As of Mar. 31, 2011 its balance sheet shows: $38,000 in assets, $261,000 in liabilities, zero revenue and a quarterly net loss in excess of $219,000 thousand.” MMTE does have, however, 10.5 Billion Common Shares (of its 15 Billion Authorized Common Shares) ready to sell on the open market, “even if it means dilution.” Martin Tsvetkov, “Mammoth Energy Group Inc. Acquires Lithium Sites, Stock Jumps 15%” (May 27, 2011) @ http://www.hotstocked.com/article/8952/mammoth-energy-group-inc-pink-mmte-acquires.html .

Further, MMTE makes its ownership and mining rights quite fuzzy by way of (among other things) statements on the company's own carefully worded website. For instance, the first page of the MMTE Website states: "Mammoth Energy Group (MMTE) is the owner of interests in three salars with the potential to produce lithium and other metals from surface lakes and subsurface brines." (See MMTE @ http://www.mammothenergygroup.com .) The above, bolded highlights point out suspect conditions or issues that place in doubt and question exactly what MMTE's purported mining claims actually entail. Those same suspect terms - combined with months of weak press releases and forlorn PPS values - create inherent doubt as to whether MMTE will (or even can) effectuate any significant lithium extraction and sales from whatever "ownership interests" MMTE might have. Additionally, the world's most lithium-rich geographical deposits, typically found in arid, salty flats known as "salars," do NOT include MMTE's fuzzy claims to small portions of three Chilean salars (i.e., Salar de Maricunga, Salar del Laco, and Salar de Pujsa). Indeed, the worlds lithium-richest and premiere lithium mines/deposits actually include: (1) Salar de Hombre Muerto; (2) Salar de Rincon; (3) Cauchari, (4) Olaroz, (5) Salar de Uyuni, (6) Salar de Atecama, (7) Taijanier Lake, (8) Zhabuye, and (9) Silver Peak.
See, e.g., id.; MMTE Website @ http://www.mammothenergygroup.com/projects.html ; Signum Box, "Salar de Maricunga: Project Review," p.5, tab. 3 (June 2011) @ http://www.li3energy.com/projects/signumBOX/IVG-LIEGsignumBOX2011.pdf ; Lithium Investing News, "World Class Deposit" @ http://lithiuminvestingnews.com/investing-in-lithium/lithium-world-class-deposit ; R.K. Evans, An Abundance of Lithium II @ http://www.worldlithium.com/AN_ABUNDANCE_OF_LITHIUM_-_Part_2.html ; New World Resource Corp., "Projects About Lithium," @ http://www.newworldresource.com/s/AboutLithium.asp .

MMTE'S PURPORTED MODEST MINING CLAIMS & ORIENTEERING MAPS

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BRINGING LITHIUM FROM GROUND TO GRADE IS TOUGH & EXPENSIVE

Having worked in the mining industry (see, e.g., Rio Tinto @ www.riotinto.com ) and/or lived near both massive "open" (i.e., not tunneled) precious metals mines and the Great Salt Lake's plethora of brine pools my entire life, I know that the various precious metals mining processes (e.g., brine pool extraction mining, strip mining) are neither easy nor inexpensive; they are quite the opposite in fact:

"The extraction of lithium is a very complex process, requiring many specialized machines and equipment." Ciros Machinery Corporation, "Lithium Processing Equipment," 2011 (emphasis added). Furthermore, "The salars are large, dry lakebeds where the brines (e.g., brine water 'ores') containing trace amounts of lithium) are located under . . . layered, crusted salt deposits. These (lithium mining) areas are remote and inhospitable. (Accordingly, to extract the brine pool ore from undeground for lithium refinement processes and concordantly to make such bleak, barren mining lands) productive requires a considerable investment in research, exploration, mobilization, and transportation of personnel and materials." FMC Lithium, "Lithium History" @ www.fmclithium.com/Home/LithiumHistory.aspx (emphasis added). MMTE therefore faces formidable industry-entry costs similar to, say, a start-up company trying to enter the oil exploration/extraction industry.

Depending on the method of mining/refining, required lithium mining/refining equipment and processing plants include expensive and environmentally controversial: drilling rigs, commercial grade brine water pumps, miles of piping, giant evaporators, thousands of acres of solar evaporation basins, raw lithium salt harvest machinery, concentrator facilities, condensors, complex canal systems, grinding mills, ball mills, processing facilities, potash recovery facilities, refineries, lithium chemical refinement plants, lithium mineral refinement plants, storage tanks, a means of ore/brine water and product transportation (e.g., tanker trucks), etc. See, e.g., id.; see also "The Trouble with Lithium II: Under the Microscope," supra, pp. 1-5, 17, 33, 46 ; TRU GROUP, "Tru Lithium," @ http://trugroup.com/Lithium-Battery.html . Such systems, mills, equipment, and processing facilities allow the production of lithium from minerals in brine water lithium "ore" (e.g., underground brine pools, mineral springs) and, on occasion, igneous rock ore (e.g., spodumene, amblygonite, lepidolite), or other regolith ore (e.g., crusted salt layers with tiny lithium deposits). Those same expensive and environmentally controversial equipment and facilities prove mandatory in processing, refining, and making lithium products (e.g., lithium carbonate, lithium pellets, lithium batteries, etc.) ready for sale to end-users or on the blossoming open market. See, e.g., id.; see also J.A. Ober, United States Geological Survey,"Lithium," 77–78 (Aug. 2007).

Moreover, regarding the ever increasingly scrutinized environmental factors as such apply to MMTE's purported salars, "Production of lithium from this unique ecosystem can only be environmentally damaging. Anything more than limited and very careful recovery of lithium is incompatible with the production of 'Green Cars' (e.g., that use lithium batteries)." See "The Trouble with Lithium II: Under the Microscope," supra, p. 16.) The mining, extraction, refining, and transportation of "even 10% of the global automotive (lithium) demand would cause irreversible and widespread damage" to the Chilean, Argentine, and Bolivan salars. Id., p. 52.

BRINE POOL MINING: COMPARISONS & ANALYSIS REVEAL NASTY ODDS

Of the many mining start-up companies that I've personally seen, heard of, or worked with in California, Nevada, and Utah, I know of only ONE such start-up company with ongoing operations that make the company and its shareholders significant profits. The mining industry is ruthless... often forcing companies to operate with the slimmest of profit margins. Regarding lithium mining, the industry had already filled itself with strong, entrenched, efficient competitors by 2010 (while MMTE kicked the salty sand and wasted critical time) that would love to smash MMTE like a bug. See, e.g., Orocobre Ltd. @ http://www.orocobre.com.au/ ; Salares Lithium Inc. @ http://www.salareslithium.com/s/News.asp?ReportID=413598 ; Talison Lithium, Ltd. @ http://www.talisonlithium.com ; FMC Lithium Corp. @ http://www.fmclithium.com ; and Lithium One, Inc. @ http://www.lithium1.com/s/Home.asp .

Further, in many ways lithium underground brine pool mining proves even more problematic than gold, silver, or copper mining. First, while mining, processing, refining, transporting, and selling lithium from salars - underground brine pools and/or the pools above ground salt flats (collectively, "Brine Mining") - can turn a profit, the lithium-rich areas of the planet in which such salts and underground brine pools exist are amazingly few. Second, even if a company somehow manages to acquire valid mining and extraction rights in these extraordinarily rare, lithium-rich salars, Brine Mining entails many of the same daunting processes, costs, and difficulties encountered by Brine Mining's cousins... strip and placer mining. Third, as with strip mining, profitable Brine Mining requires extraordinarily massive and expensive equipment, facilities, and operations. Note, for instance, the vast areas of this barren, salar, lithium mining land of which the MMTE's press releases boast, and MMTE's purported claims are tiny compared to real mining companies' claims/mines/processing facilities. Fourth, the geopolitical climate trends more and more toward total absolute governmental control and operation of all South American lithium mining. See, e.g., Mining.com, "Lithium OPEC on the Horizon," (July 2011) (reporting that Argentina and Chile strongly promote an OPEC-like cartel for Argentina, Bolivia and Chile – which together control 85% of the world’s reserves of lithium – to manage prices and limit overproduction); see also "The Trouble with Lithium II: Under the Microscope," supra, pp. 49-50.) Finally, by examining the (original posts') photos of a successful (and a reasonably Brine Mining comparable) strip mining operation, the photos quickly put into perspective the massive scale of mining precious metals through any large-scale mining operations such as Brine Mining (and its close cousin - strip mining). See http://investorshub.advfn.com/boards/read_msg.aspx?message_id=66835123.


So Very Far In The Distance - MMTE’s Money-Making Horizon Lies



The Chilean high deserts are vast, remote, and inhospitable geographic regions dotted with sporadic salt beds or “salars.” Under some of these salars lie pools of brine water that contain anywhere from faint to fairly rich concentrations of lithium ore. From these salars and brine waters, experienced and well-funded mining exploration and development companies painstakingly prospect for the most lithium-ore-rich lodes to extract, transport, process, refine, and sell for high dollar to end users such as lithium-ion battery manufacturers.

THE VALUE IN THE GROUND?

Some say that MMTE's value is based in the lithium in the ground… that all of the other, above aspects of exploration, mining, evaporation, harvesting, transporting, refining, etc., mean nothing. A more ludicrous statement one would find hard to make.

First, unless MMTE can find an entity crazy enough to merge or create a joint venture with the diluted, forlorn MMTE to mine & refine lithium (eventually) the relatively tiny land acquisitions MMTE purportedly required an ownership interest in, or some such other miracle happens, I believe MMTE mislead investors, perhaps banks, and will find itself in a world of hurt sooner than later!


Second, and as previously noted, MMTE makes its ownership and mining rights disturbingly fuzzy by way of (among other things) statements on the company's own “carefully” worded website. For instance, the first page of the MMTE Website states: "Mammoth Energy Group (MMTE) is the owner of interests in three salars with the potential to produce lithium and other metals from surface lakes and subsurface brines." (See MMTE @ http://www.mammothenergygroup.com .) The above, bolded highlights point out suspect conditions or issues that place in doubt and question exactly what MMTE's purported mining claims actually entail. Those same suspect terms - combined with months of weak press releases and forlorn PPS values - create inherent doubt as to whether MMTE will (or even can) effectuate any significant lithium extraction and sales from whatever "ownership interests" MMTE might have.

As a footnote to the above, an iHub member with an eye-witness accound recently reported the following in response to a challenge regarding the purported MMTE ownership interests in these small salar portions: Not sure what claims of proof of land you're talking about. Just got back from Chile and Argentina and according to Ministry of Mines the only thing on record is CLIL being formed. Did not see any records of concessions. Sent WL an email to confirm as to why no records of concessions and got no answer. I am through posting on this "scam of a stock" all you believers can hang in there but from what I can see this is just another WL ruse. Good luck everyone, wait for the next pump and get out and don't look back!!! -Hunta

Third, the world's most lithium-rich geographical salars do NOT include MMTE's fuzzy claims to small portions of a few Chilean salars (e.g., Salar de Maricunga, Salar del Laco, and Salar de Pujsa). Indeed, the world's primariy lithium-rich and lithium-producing salars include: (1) Salar de Hombre Muerto; (2) Salar de Rincon; (3) Cauchari, (4) Olaroz, (5) Salar de Uyuni, (6) Salar de Atecama, (7) Taijanier Lake, (8) Zhabuye, and (9) Silver Peak. See MMTE Website @ http://www.mammothenergygroup.com/projects.html ; Signum Box, "Salar de Maricunga: Project Review," p.5, tab. 3 (June 2011) @ http://www.li3energy.com/projects/signumBOX/IVG-LIEGsignumBOX2011.pdf ; Lithium Investing News, "World Class Deposit" @ http://lithiuminvestingnews.com/investing-in-lithium/lithium-world-class-deposit ; R.K. Evans, An Abundance of Lithium II @ http://www.worldlithium.com/AN_ABUNDANCE_OF_LITHIUM_-_Part_2.html ; New World Resource Corp., "Projects About Lithium," @ http://www.newworldresource.com/s/AboutLithium.asp .

Fourth, based on the press releases and, inter alia, the above data (including all cited information/links), MMTE appears far from establishing even the most basic resources required to mobilize and initiate a successful precious metal mining and refining operation. Moreover, without mammoth dilution and/or a reverse split, MMTE will almost certainly find itself unable to finance the colossal industry entry costs inherent to precious metal mining - small Brine Mining operations included. See, e.g., below photos of a low-key, small lithium mining operation. Further, where MMTE's purported salar land ownership interests are NOT found among the very few, lithium-rich salars on the planet (and where MMTE's ownership status or interests pertaining to its relatively unknown salars also remains in question), one would find it rather unlikely that any viable or reputable mining company might want to enter a joint venture or merge with the cash-strapped, heavily O/S diluted, forlorn penny stock, MMTE.



Simply put, and assuming that MMTE actually has some salar ownership interests, MMTE bought comparatively crappy salar claims because that is all it could afford, even after selling so many shares to the 'investors' that are the so-called MMTE common shareholders, i.e., us!

SUMMARY
It is beyond doubt that what MMTE reports and purports is not the entire story, or perhaps not even the actual story at all. Without question, however, the above evidences the cold, hard fact that MMTE is a long way from producing any significant amount of lithium for purchase by end users. MMTE faces an expensive, uphill battle that simple common sense dictates MMTE cannot win.