Alset Energy – Fueling the Future
Lithium has been a hot commodity over the past couple years and it has driven several junior mining stocks much higher. In these types of markets, I never chase the latest hot stock that is getting pumped up. Instead, I look for the companies that are focused on building a company, not a stock.
In the case of my newest sponsor, while many lithium juniors have been focused on grabbing just about any piece of property that could be called a lithium project to promote their stocks. These guys have been focused on quality projects that can take advantage of a fairly quick development timeline and can be low-cost for development and production.
In the past I’ve had the chance to interview Tim Oliver, an engineer with plenty of experience, to come on to help my audience better understand the economic studies that mining companies present to the market. During his lengthy career, he has worked extensively in Mexico and on lithium projects. So when Alset Energy (ION.V) hired him as a consultant and then as their president and CEO it caught my attention.
When I learned more about the company, a couple things stood out when hearing Tim Oliver talk about the company’s efforts. He mentions they are focused on near term production projects that also have the potential to be profitable operations.
With a hot commodity like lithium, I’m always aware that these small production commodities can see significant jumps in prices, but once producers react the price can come back to earth quickly. What caused the market to get heated up was when Elon Musk from Tesla started talking about doing deals with lithium producers in Nevada to secure lithium for the batteries for their electric vehicles.
As often happens when a commodity gets hot, especially if that commodity is important to a superstar in technology who has turned his attention to electronic car making, things can get very exciting in the stock market as well. A business star like Elon Musk doesn’t often shine on the mining space, and it has caused a lot of enthusiasm for the lithium space among investors.
To take advantage of the much higher price of lithium will need more than just a claim that could be in the general area where there may be lithium. Alset Energy has a sharp experienced expert in lithium at the top and they have put together a strong portfolio of projects. It won’t take long for larger lithium companies interested in growth through acquisitions to put Alset Energy on their potential targets list.
The Business Part
My reports are made possible through website sponsorships and consulting work. I’ve been changing my reporting lately, I used to cover many companies at a time. In the new gold bull market that started in January 2016, I expect fewer companies will participate than during the last gold bull market. Gold is a leader in the commodities space and it getting stronger has a way of driving other commodities higher and to bring new investors into the mining sector.
In this kind of a scenario, investors will need to be solid stock pickers, and understand the stocks they own. In addition to covering fewer companies, the ones I cover, I will be covering them more extensively. In order for me to cover companies more extensively takes more time and is costlier to produce. This is why I put together the website sponsorship program in January 2016.
With the sponsorships, I cover the costs of the added coverage for them and to produce other reports for my readers and viewers at no cost. As more companies learn what the program delivers in coverage and reach, more will come as they learn how I use digital tools to promote my work and highlight my sponsors in the reports.
I’m pleased that Alset Energy has given me the chance to showcase them and my website sponsorship program. The website sponsorship program is $12,000.00 per year; I receive payment at the beginning of the program and will be using some of the proceeds to take a position in the stock.
I’m not the only commentator that has website sponsors. What makes mine different, is that website sponsors don’t get to review or edit my written or video reports, they see the reports when everybody else does.
This way, you will know that it is my opinion of what is happening, I read their news and present my views when there is significant news out. I think this takes confidence from the sponsor company in my reporting and their projects.
I would like to thank the management of Alset Energy for joining my website sponsorship program. Sponsors and consulting clients make my work possible. On behalf of my audience, thank you.
Whenever I look at a company, in any industry, I like to think of it like a gold mine and try to determine if it would be a gold mine I would want to own. In my gold mine analysis, Alset Energy turns out looking really attractive and that is why I invited them to join my website sponsorship program.
When I’m looking at gold exploration companies, they are usually looking for buried deposits, or it shows very little that can be seen from the surface. In the image below, you can see where the lithium is, from a Google Earth image. As you can imagine, this makes everything much easier and brings exploration costs down dramatically compared to drilling for buried deposits.
Once a gold explorer makes a discovery, then they have to keep drilling a bunch more holes to profile the deposit and to also assess the economics. With these lithium deposits at the surface, testing the economics is much easier and less expensive. In the case of some of the projects that Alset Energy are involved with had historical production for salts and the lithium was left behind.
In a gold exploration project, it would be like walking up to a tailings pond that the rock was only processed for let’s say silver and they left all the gold behind. Being able to run bulk tests tells a lot about the economics in a gold mine, and with Alset’s key project they can go in and get to the bulk sampling stage really quickly.
After a gold explorer makes a discovery, then does the economics, the next steps would be to raise the money and start building a mine. Lithium operations are much less expensive to bring into production, so if the numbers look good, then it is a much faster track to production and much less capital costs.
In any project, regardless of the commodity or where it is located, permitting along the various stages is crucial. Mexico is a mining friendly jurisdiction to start with and Alset Energy’s projects have the added benefit of also containing potash. Mexico has strong demand but no domestic production of potash, so it would be important to have a secure local source for their domestic needs.
I guess it is just from being in the gold industry for so long, no matter what kind of company I’m considering, I look at it as a gold mine. I visualize what it would cost at each step along the way and then ask would this be a nice gold mine. In gold mining terms, this would be a low cost exploration, development and mining play.
Those are the exact kind of things I look for, especially when they have a small valuation and their best growth days are ahead of them. Alset Energy passed the test on all fronts and I’m happy they chose to take me up on the offer to join my website sponsorship program.
Next up, I’m going to put an interview together with Tim Oliver, to come on to give us an overview of the company and the milestones they are focused on.
Stay tuned, these guys have a small valuation compared to their peers, yet they look to have a faster track to production that takes advantage of the strong lithium prices. I don’t expect it to take long for them to get a higher valuation that will enable them to knock off their milestones.
All the best,
Allan Barry Laboucan
P.S. my reports are for information purposes only, before making any investment decisions it is important to do your homework and speak with your financial advisers.