Are all Lithium Mining Plays SCAMS?! I take a look at
LIEG, AMEL, LTUM, AMLM and BHWX
Li3 Energy Corporation (LIEG) – Amerilithium (AMEL) –
Lithium Corporation (LTUM) – American Lithium Minerals
(AMLM) – BlackHawk Exploration (BHWX)
BLACK HAWK MINES
In my previous life as a paid promotion site, I got to see any number of companies
and sectors pushed and promoted that didn’t deserve to be!
It seemed that every week I was doing an Oil and Gas Play. Alternative energy
plays were very popular…biofuels and solar, too. BUT, the clear winner over the
past year has been the Lithium mining sector. I saw a succession of mining plays
like LIEG, AMEL, LTUM, BHWX and AMLM parade across the paid promotion
universe. They did just want “pump and dumps” should do…they skyrocketed and
then fell. They all has slick, professional websites that touted that Lithium was
the “energy source of the future”. It may well be, but these companies are very
far away from being viable companies.
The truth is I did alerts on all of these companies at one time or another over the
past year. I just ran across LIEG the other day and have added it to my list since
it is in the lithium mining business and it is a paid promotion stock, too.
Is Lithium the energy source of the future?
It certainly is when it comes to batteries for electric cars. Greentech Media
published an article by Mark Boslet called “Lithium Battery Oversupply Debate
Rages” (click here to read). It was an entertaining article that makes a case that
the future demand for Lithium batteries will be extremely strong. Certainly
Obama’s multi-billion dollar investment in Lithium battery technology should bear
some fruit for the domestic battery and electric car industry.
Here are just a few facts that I have gleaned about Lithium:
The Obama administration’s Energy and Environmental plan requires increased
lithium production because the plan calls for ONE MILLION hybrid/electric
vehicles on American roads by 2015 and is investing BILLIONS to jumpstart a
domestic electric battery industry.
It may play a vital role to the future of the automotive industry. In
fact, According to a new report from Pike Research, this market growth will
create a Li-ion transportation battery industry with nearly $8 billion in sales
worldwide by 2015, up from $878 million in 2010.”
That is bound to have a HUGE impact on lithium mining companies. I
read somewhere that it take 60 to 70 pounds of lithium carbonate to
make the batteries that will go in the typical Electric vehicle. Clearly,
lithium is going to be a hot commodity going forward. I am not sure that
these companies are going to allow you to take advantage of the demand
Are all Lithium Mining Stocks scams?
I sure hope not. But, they have been a very popular “pump and dump”
stock lately. If you are still interested in Lithium and want to get out
of the pump and dump world their is always the new Lithium ETF –
LIT (Global X Lithium ETF)
There are larger mining concerns that are producing and viable (Chementall and
SQM from Chile, FMC Lithium and Tallison Minerals from Argentina),
but LTUM, AMEL, AMLM, BHWX and LIEG aren’t there yet. Most current
production is in what is known as the “lithium triangle” or lithium “ABC“: ”
Argentina, Bolivia and Chile”. U.S. mining is concentrated in Nevada’s Clayton
Valley where several of these companies have exploration properties. (and
Chementall Foote has the only producing U.S. Lithium mine). By my own
unscientific estimations, these other companies are many, many years away
I did notice that LTUM and AMEL seem to be run by the same group since
their websites are eerily similar. So….some Lithium plays are so lazy they just
recycle information off of another website. And, still people bought both
stocks “hand over fist” when the pump was going on.
Let’s take a look at these U.S. Lithium Mining Companies
As you can see their charts are remarkably similar….they hit the
ground running with lots of paid promotions and a great deal of
buzz. After initial success, most of the price action has been
down. In fact, all are trading significantly below their recent highs.
LI3 Energy, Inc. (LIEG)
Amerilithium Corporation (AMEL)
Black Hawk Exploration, Inc. (BHWX)
Lithium is going to be a hot sector for many years to come. I
am not sure that any of these companies are going to “hit the
jackpot” in the long run, but if you are a gunslinger trader you
can certainly play the next pump on any one of these
stocks. Just be careful with these and any other of the
“hottest stocks” that gets touted.
When I introduce my paid newsletter site in another month, I
will give traders the opportunity to take advantage of my
research, experience and knowledge to pick the right
stocks…free of hype and manipulation. I don’t have anything
against any of these stocks. I expect that very few of them
will be around in a year or two, but I could be surprised. Paid
promotions (also called “pump and dumps”) are a great way to
LOSE money for most traders. Just be careful when you get
the email or piece of mail touting the next hottest thing. It
might be hot, but only long enough for the promoters to make
money! Not you, though!
Here is what I am looking at for entry/exit points
HA HA HA HA HA HA HA HA! (yeah, right!)
Good Luck and Great Trading,
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