The new alchemy... turning cobalt into lithium

With the cooler September nights the summer lithium frenzy seems to be cooling as well. Junior miners would stake claims in moose pasture that had a discarded lithium battery to give their stock a boost. And in general it worked, for a while...

For those who are new to this, lithium is used in the new generation of batteries that are used in the new generation of battery powered cars. And in the shadow of a more sustained bull market in rare earth element minerals (REEs) they caught fire, with some stocks multiplying quickly. The one I bought was TNR Gold (TNR-V) which did double from mid-July to mid-Aug and then pulled back, but in a more sober way. It closed Friday at 29 cents, has great gold properties and I'd be a buyer in the mid to high 20's if I didnt already have some. In addition to their gold properties in Argentina, they managed to accumulate a bunch of lithium related properties over the years which are suddenly popular. So much so that they plan to spin them out this fall into a new company which I think will be called International Lithium. I think TNR is a good speculation without the lithium, but the spin off could catch fire. Or not... but this looks to be one of the better values in the junior lithium exploration space.

But the related value play I really like is Geovic Mining (GMC-T). It closed Friday at 62 cents, and has over 50 cents in cash and a 60% interest in a series of cobalt claims in Cameroon. Traded up around and over $4 just 2 years ago and has been given up for dead. But cash can keep you alive long enough for things to change. And it happens that cobalt is also used in these car batteries along with lithium. Much current and future cobalt supply comes from the 'Democratic' Republic of Congo. All in all, Cameroon is very stable in comparison. Of course so is plutonium.

But all in all, for a patient speculation GMC at 60 cents is a good one, since it trades about cash value and has by all account great properties if cobalt returns to its glory days... and I expect it may. They hope to finance their new mine 80/20 debt/equity, and hope to reduce capital costs that had ballooned and made the economics less compelling.

I added some recently at .65, and also there are 2 tradable warrants at a few cents each that expire in 2012 if you really want to roll the dice. But patience may be required.