VSA Morning Miner, 24/03/21
American Lithium (CVE:LI)
American Lithium (CVE:LI) has announced the results of further flowsheet testwork demonstrating strong results from mechanical beneficiation. Hydro cyclone seperators were used in lab conditions to demonstrate the potential for increasing the lithium grade before acid leaching takes place. This achieved a 49% mass reduction while increasing the lithium grade by 66%. The average grade of the resource is currently c900ppm Li; subsequent acid leaching yielded recoveries of 96%.
This is a positive step, in our view, which demonstrates the potential for lower acid consumption (as much as 45%) due to lower volume of material being run through a future plant. Whilst some lithium is a lost through this process net recoveries of 75% remain well above the industry standard where 40-60% is acceptable in salar evaporation ponds. This will overall likely significantly enhance future unit costs and economics.
Our target price and recommendation remain under review.
Ferro Alloy Resources Group (LON:FAR)
Ferro Alloy Resources (FAR LN) announced that director’s have sold a total of 16.7m shares at a price of 30p/sh. The requirement to sell, in order, to settle the CEO’s divorce settlement had been previously flagged. In addition Mr Bridgen sold 1.7mn shares by way of a loan on behalf of Andrey Kuznetsov as part of the liquidity event. Mr Bridgen now holds 14.5% of the company while My Kuznetsov holds 20%. The remaining holdings of these directors are subject to a 180 day lockup.
This was an unusual situation for a company to be in and it is positive that it has been resolved and now the directors and new strategic investors can focus on development of the Balasausqandiq asset. Please click here to watch our webinar held with the new Chairman, Sir Mick Davis.
We reiterate our Buy recommendation and Target Price of £1.71/sh.
Oliver O'Donnell, CFA, Head of Research & Natural Resources Analyst | T: +44 (0)20 3617 5180 | E: oodonnell@vsacapital.com
Paul Renken, Senior Geologist | T: +44 (0)20 3005 5011 | E: prenken@vsacapital.com
VSA Capital Research | T: +44 (0)20 3005 5000 | E: research@vsacapital.com
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