American Lithium (TSXV:LI) Low Cost Battery-Grade Lithium Assets for US Critical Mineral Production

Company Interviews

Interview with Simon Clarke, CEO & Director of American Lithium Corp.

Our previous interview: https://www.cruxinvestor.com/posts/american-lithium-tsxv-li-poised-to-charge-higher-on-world-class-projects-5072

Recording date: 22nd May 2024

American Lithium is emerging as a premier investment opportunity in the booming electric vehicle (EV) supply chain. With large, low-cost lithium projects in Nevada and Peru, the company is strategically positioned to benefit from surging demand and increasing government support for domestic critical mineral production.

The U.S. government is taking action to reduce reliance on geopolitical rivals like China for key battery metals. Recent legislation includes funding for lithium projects, with a focus on companies that can produce battery-grade materials entirely within North America. American Lithium's ability to generate high-purity lithium chemicals on site using an acid leaching process gives it a distinct competitive advantage in accessing this support.

CEO Simon Clarke sees the potential for even more aggressive government intervention, including offtake agreements that could guarantee minimum prices for domestic producers. "If they were prepared to guarantee lithium prices at $20-25,000 per ton, that would make a huge impact," he noted. Such moves would dramatically derisk American Lithium's projects.

While lithium prices have pulled back from record highs, the demand outlook remains robust as EV adoption accelerates globally. Benchmark Mineral Intelligence forecasts a major lithium supply deficit emerging in the mid-2020s, even with all currently planned projects moving forward. American Lithium's TLC and Falchani projects rank among the largest undeveloped resources globally, positioning the company to help fill this gap.

Importantly, both projects have low estimated operating costs that should make them profitable even at current lithium prices. "On a combined basis, we have a top three global lithium resource," Clarke stated. "Even at current lithium prices, you would make a reasonable return." As higher-cost marginal producers fall by the wayside, American Lithium will be well-positioned to capture market share.

In the near term, investors can expect a steady flow of catalysts as American Lithium advances its projects. The company is completing a pre-feasibility study at TLC and progressing environmental permitting at Falchani. Management is also committed to spinning out its uranium asset to unlock additional value for shareholders, with exact timing dependent on market conditions.

At its current valuation, American Lithium offers a compelling risk/reward proposition. The stock trades at a discount to peers on a resource basis, despite the company's strategic positioning and near-term growth potential. As the U.S. government rolls out additional support for the domestic lithium industry, American Lithium should be a prime beneficiary.

With a large, low-cost resource base and leverage to the most powerful trends in the global economy, American Lithium is a stock for the future. The recent pullback in lithium equities provides an attractive entry point for long-term investors to gain exposure to the accelerating energy transition. As the EV revolution kicks into high gear, American Lithium has the scale and strategic positioning to emerge as a major player in the domestic lithium supply chain.

View American Lithium's company profile: https://www.cruxinvestor.com/companies/american-lithium

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