VIEWS: 6 PAGES: 13 CATEGORY: Corporate Finance POSTED ON: 6/1/2012
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.
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 for Lithium. 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 from viability. 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, Jeffrey Dean About InvestorSoup InvestorSoup.com is committed to provide intelligent commentary and solid analysis of small cap stocks, micro-cap stocks, hot penny stocks and helping investors make informed decisions. Our focus is primarily on the underserved OTC stocks market, or “penny stock” market, which has traditionally been shunned by Wall Street. There are many hot penny stock opportunities present in the OTC market everyday and we seek to exploit these hot stock gains for our members before the average trader is aware of them.
"Are all Lithium Mining Plays SCAMS?! I take a look at LIEG, AMEL, LTUM, AMLM and BHWX"