Lithium Americas Corp (LAAC)

[lithiumjr]

Alot of catalysts for Western Lithium..

1) October End – Final licenses and start of Hectatone production.

2) November – First Hectatone sales to customers (likely bentonite products, lower margin but will help build customer base).

3) YE14 – Results from the first campaign at the Li Pilot Plant in Germany.

4) New clients, current discussion:
''Hectatone™ has reserved the right to sell directly to a number of specific other oilfield service and supply companies that it is currently in purchasing discussions with.''

5) Lithium discussion (could be tesla)

''The Company is currently in discussions with potential partners in order to accelerate its lithium development activities in Nevada. ''



Dundee target $1.30

According to Dundee Capital Markets:

October 10, 2014

Western Lithium (WLC-T) – Site Trip – Hectatone & Kings Valley

Buy, Speculative Risk, C$1.30 Target

Dundee visited Western Lithium’s Hectatone facility in Fernley, Nevada on October 8th. We also saw the small scale open pit at its Kings Valley project, ~200 miles north in Humboldt County, on October 9th.

Overall, we are impressed with the Hectatone facility and the team WLC has put together to run the plant. About 10 employees are already hired, including plant manager Jerry McNamara (experienced in mineral processing) and four of his former employees. Everything is built and ready to go with only final business licenses holding up the official start of production. Several Fernley government representatives came for the ribbon cutting and WLC was told that final licensing should be no issue and expect it within 2-3 weeks (low risk). The facility has the capability to produce 11 different products and >10,000 tpa. We estimate a sales price of ~$2,000-$3,500/t and costs of ~$1,200-$1,500/t. Margins will vary based on the product being produced, and amount of quaternary mean required (makes up ~70% of the cost). WLC expects to sell predominantly a bentonite product first with minor hectorite sales in order to breach the market and build a customer base.

Highlights:

• Hectatone is being run out of an old Lumber yard – There is quite a bit of extra space for stockpiling, extra storage tanks, and even expansion of the plant. Capacity is already >10,000 tpa, feeding a market of ~50,000 tpa (and growing).

• 2,000t of stockpiles on site (see photo below) – High quality clay from its Kings Valley project (trucked ~200 miles on all paved roads). The company can probably produce up to 3,000-4,000t of Hectatone products with the clay already on site sitting in dry storage.

• The clay is consistent. We were told that the clay has been surprisingly consistent, with clay content pretty even across the board. This will be beneficial for processing as the company won’t have to battle against different grades or blend. Remember, this is one of only two operating hectorite clay projects in the US, the other being run by competitor and market leader Eelementis (ELM-LON) in California. WLC’s project is far higher clay content (up to 80-90%, vs. ~40% for the Hector Mine).

• Quaternary mean. This makes up ~70% of the cost of producing its hectorite based drilling products. The company will be using three different types, all sourced from the US. About 11 products can be created when combined with other proprietary additives.

• Very simple flow sheet. The operation is pleasantly simple: 1) Clay is fed into the plant via conveyor, and mixed in PUG mills with quaternary mean and other products; 2) Sent through an extruder to create half-inch pellets; 3) Sent to the holding bin or hammer mill for crushing; 4) Packaged in 40lb bags and shipped.

• Ready to go by October-end. Only final business licenses are required before the plant is ready to operate. Right now it will run 5 days a week on 8 hour shifts.

• Hectatone potential economics. Margins will vary significantly with the product being made, but we expect up to $1,000/t. Producing 10,000 tpa to start means ~$10 MM margin. We believe the plant could expand well beyond 10,000 tpa capacity with little (if any) capital should the demand be there.

• President of Hectatone Frank Wright was very impressive. He is extremely knowledgeable of the industry, including competitors and buyers of the product. RMC will take around half the product to start, purchasing it from Hectatone and selling it for the company through its own network. Remember, Elementis recently cancelled its contract with RMC.

• Two pits are permitted and good for >20 years. The company has ~110 acres permitted to be disturbed. Water rights are secured. WLC has already mined 3,000t. It will only need to run 2-3 month campaigns right now for a full year’s worth of Hectatone production. No capital is required for pit expansion.

Catalysts:

• October End – Final licenses and start of Hectatone production.

• November – First Hectatone sales to customers (likely bentonite products, lower margin but will help build customer base).

• YE14 – Results from the first campaign at the Li Pilot Plant in Germany.
Read more at http://www.stockhouse.com/companies/bullboard/t.wlc/western-lithium-usa-corporation#YvgivdiDPbcIcAi2.99