NRG Metals, a Good #Lithium Bet?

After massive moves in Lithium (“Li”) juniors last year, will history repeat?  Who knows, there will be big winners in 2017, but far fewer.  Investors learned a lot about which stories have a chance and which likely don’t.  For example, if one is invested in an Esmeralda County, Nevada (host of the Clayton Valley basin) Li play, it might be time to take a closer look.  Why?  The superpower in the area, Albemarle Corp., [NYSE: ALB] believes it has a senior claim on ALL water rights in the basin.

Water rights and/or lack of scale will be the downfall of dozens of hopefuls in western States.  This is also true (for the same and other reasons) in many jurisdictions of Canada, Australia & Argentina (“ARG”).  Investors looking for good ideas should pay particular attention to ARG.  For some, that might mean development-stage companies like Lithium Americas [TSX: LAC]which owns 45.75% of a very strong project, Cauchari–Olaroz, (along with 45.75% partner SQM [NYSE: SQM]) in Jujuy Province.  Or, ASX-listed Galaxy Resources [ASX: GXY], owner of the very promising Sal de Vida project on the western side of the Salar del Hombre Muerto.

Cheap valuation, world-class team, sizable Li brine option in Argentina

I’m looking for juniors with cheap valuations PLUS 1) strong management, 2) access to capital and 3) potential projects of scale.  NRG Metals Inc. [TSX-V: NGZ] [OTC: GPOFF] stands out for its valuation (2nd lowest market cap of 15 ARG Li juniors I track)  Note:  {Valuation is more important than ever.  Dozens of Li stocks are up hundreds or thousand(s) of percent, even after meaningful pullbacks from 52-week highs}.  NRG has a world-class management / technical team, and has gained control (through a low-cost option) of nearly 30,000 ha in the Salar de Carachi Pampa.

Fernando Villarroel has 12 years’ experience in the mining industry in Argentina focusing on lithium process development.  From 2009 to 2013 he worked with Lithium Americas as Project Manager responsible for construction management & commissioning of the initial pilot evaporation facilities and lab at Cauchari Olaroz.  José Louis Martín is a Phd in Geology with 35 years’ experience.  Dr. Martín served as the Catamarca representative for Galaxy Lithium from 2010 to 2013, and participated in the development of the Feasibility Study for Galaxy’s Sal De Vida.  Note:  {See more detailed bios below}

How did you find the Carachi property, and how were you able to quadruple NRG’s initial land position to 29,182 hectares (72,100 acres)?

Initially we had 3,004 ha, (~7,420 acres), then we optioned an additional 3,383 ha (~8,360 acres) and announced the transaction.  After a successful VES survey, which formed the basis of the NI 43-101 report (done by Novaldo Rojas, the QP for Milllennial Lithium (TSX-V: ML), we decided to go after a dominant position in the basin.  So, we re-negotiated with five parties and came up with a deal requiring a cash payment of only US$173k, for an option on, as you said, 29,182 ha (~72,100 acres).  No further payments are due unless we like upcoming drill results.  We believe, consultants believe, salars in this area are related to the Galan Caldera.  Given the depth of the basin, if we hit decent Li values without chemical issues, we could be off to the races.

Please explain why you think your Carachi Pampa property is an attractive prospect.

Based on a recent geophysical survey, there’s a zone of very low resistivity / high conductivity that looks like it could be a zone of saturated brines.  It begins at 70 m depth, dips to 300 m, is about 150 m thick, and is open at depth and in all directions.  At low cost, we can drill a few holes and see what we find.  Our technical team can explore multiple targets at once until we find project(s) we like.  Access to capital is key, we’re in good shape on that front.

Management team bios

Conclusion