Charging Up Those Lithium Mining Stocks (SQM, AMEL, LIT)

Both mid cap Sociedad Quimica y Minera (ADR) (NYSE:SQM) and small cap Amerilithium Corp. (OTC:AMEL) are lithium miners and I found an exchange traded fund focused primarily on lithium: Global X Lithium ETF (NYSEARCA:LIT) for perspective. The ETF is $14.77; up today.  

Investors know lithium. It was a key word in the ‘electric car’ bubble that developed in the middle of the last decade and ‘lithium batteries’ became a significant phrase until the word ‘nano’ started creeping in and battery technology to power hybrids made some big strides in new energy technologies. But lithium is still part of any energy conversation as ‘efficiencies’ for longer life are constantly in a battle with the concept of ‘charging stations.’  

There are a lot of lithium battery developers, researchers, manufacturers, and distributors, but not a lot of lithium mining plays: SQM for example is a big lithium miner in Chile, but the Company, currently trading in the $54.40 range on a two-week bounce back from $50.85 on Dec 14; a gain of 7%, is also a big specialty chemical producer.

Its lithium carbonate is used in various applications comprising batteries, frits for the ceramic and enamel industries, heat-resistant glass, primary aluminum, bromine for use in air conditioner equipment, and continuous casting powder for steel extrusion, pharmaceuticals, and lithium hydroxide, which is used as a raw material in the lubricating grease industry.

The ‘pure play’ lithium miner in this group is miner AMEL which has four projects in Nevada, all of which located close to America's only Lithium producing plant. Only plant? Apparently so... 

Amerilithium owns a 100% undivided interest in a mineral claim known as the Kodiak Lode Claim consisting of one located claim of 20.66 acres located within the southwestern most portion of the Sunset (Lyon) Mining District of Clark County, Nevada.

The Company also owns a 100% net revenue interest in certain mineral lease interests for the exploration of minerals in the Athena Lithium Brine Project located in Alberta, Canada.

But AMEL is a development Company, with assets considered in the $7 million range, it hasn’t yet, from I could find, generated any significant revenues from digging lithium out of the ground. But the Company has some cash to keep operations going and not a lot of current liabilities. Could be worth a serious inquiry by investors looking at inexpensive mining stocks: the stock is currently trading in the $0.24 range.  

LIT, the ETF for perspective, follows the Solactive Global Lithium Index. The fund normally invests at least 80% of total assets in the securities of the underlying index and in depositary receipts based on the securities in the underlying index. It uses a replication strategy.

The index is free float adjusted, liquidity tested and market capitalization-weighted index that is designed to measure broad based equity market performance of global companies primarily involved in the lithium industry. The fund is non-diversified.

I haven’t, don’t, and do not intend on holding any of the companies mentioned in this article.