The news is full of stories about the rising demand for lithium. The ever increasing use of personal electronic devices using lithium ion batteries alone is driving an exponential increase in demand for lithium. Add to the increasing demand the now daily siting of one or more Teslas (NASDAQ: TSLA) on the daily commute to work, compounded further by Tesla’s opening of its Gigafactory, and it’s clear the current supply of lithium is dramatically insufficient to serve existing demand.
As if that were not enough, California is bringing three massive lithium battery facilities on line for storing electricity to be dispersed on the network during peak demand periods. The US Department of Defense is also seeking lithium solution for the vast array of computer electronics integrated into high tech weapon systems. The overall lithium market is headed for a bull run for a clear and present reason.
From the Lithium Exploration Group’s (LEXG) strategy overview presentation, it’s also plain to see the process and procedures for finding, mining, processing and refining lithium into useable material to be integrated into a battery is diverse and complex with multiple possible paths to the end goal.
Lithium, The New Gasoline Looking For The Next Howard Hughes
Goldman Sachs has called lithium the “new gasoline.” Remember the history of kerosene coming into fashion for lighting houses and the later rise of gasoline for fueling cars. Entrepreneurs like Rockefeller built fortunes that maintain a prominent foot print today over 100 years later by becoming early movers in a then fledging industry for harvesting oil and refining it into usable kerosene and gasoline. The famously rich and iconic Howard Hughes fortune was built on inventing and producing tools for the oil exploration and drilling industry. LEXG is emulating Howard Hughes Sr. who in 1908 started Hughes Tools as the cornerstone of his son’s fortune.
LEXG is in the midst of negotiating a definitive contract to capitalize on the Howard Hughes Sr. like oil boom opportunity in the current lithium boom market. LEXG has entered into a letter of intent with Lithium IP Holdings, a new organization funded by a prominent, globally recognized investor. Lithium IP Holdings is assembling leading lithium harvesting and refinement technologies and patented processes into a leading comprehensive, early mover solution for delivering usable lithium.
Licensing, Operating & Equity Income Starting With $1.2 M And Prompt $1.5 M Follow On
LEXG is negotiating a strategic position within the Lithium IP Holdings assembly of technologies to not only participate as another service provider but as a partner. Lithium IP Holdings intends to pay an initial licensing fee of $1.2 million in exchange for access to LEXG’s Sonic Cavitation Ltd lithium harvesting technology. Lithium IP Holdings also intends to hire LEXG to operate the technology. Accordingly, as Lithium IP Holdings wins research, mining and refinement contracts, LEXG will garner additional revenues operating the Sonic Cavitation Ltd lithium harvesting technology. Additionally, LEXG is negotiating an equity participation within Lithium IP Holdings in conjunction with Lithium IP Holdings planned acquisition of a number of Lithium Technology patents. The proposed equity structure would result in additional revenue to LEXG in addition to the balance sheet benefits of equity participation. As patented technologies related and complimentary to LEXG’s Sonic Cavitation Ltd lithium harvesting technology were licensed into the comprehensive Lithium IP Holdings offering, LEXG would receive licensing revenues. In fact, simultaneous with the ongoing negotiations to contract with Lithium IP Holdings are underway, at the same time, first lithium mining opportunities are under development. The current opportunities under development could result in the prompt inclusion of an additional $1.5 million contracts above and beyond the initial $1.2 million licensing fee.
Stay tuned for regular updates on the progress of the agreement with Lithium IP Holdings.