Wealth Minerals, #lithium news in #Chile!

Wealth Minerals (TSX: WML) / (OTCQX: WMLLF) is an old school, Lithium 1.0 company. It’s been around since the first big move of Li shares in 2017! The Company has two substantial, valuable assets in Chile, but to date, Chile has not been good to juniors. Not a single one has reached production to challenge Albemarle’s & SQM’s dominance. However, things are changing.

The government of Chile just announced the first group of locations for the development of new Li projects. The Ollagüe Salar, where Wealth has an exciting project, is on the list! Please review the brand new corp. presentation and read about the strong mgmt. team, board & advisors ready to be unleashed in Chile!

The six chosen locations share key conditions, such as “having strong interest from developing parties as collected in the recent RFI process conducted by the Ministry of Mining, favorable geological characteristics & sound environmental conditions…”

Special Lithium Operation Contracts (“CEOLs“) will be awarded based on a competitive tender process, with only one CEOL awarded in each location.

Importantly, these initial six locations will be subject to a simplified CEOL allocation process, which will consider the experience of the applicant in any part of the Li production value chain, its financial strength to develop the proposed project, and its holding of at least 80% of the mining concession in the respective area.

In parallel, the Mining Ministry will run Indigenous consultation processes in the six locations and provide certain CEOL draft templates to applicants, which could be signed if both the Government and the applicant agree as soon as the respective Indigenous consultation is completed.

Henk van Alphen, CEO of Wealth, commented,

“The whole team is very excited to see Ollagüe as one of the six locations selected by the Government in this first wave of CEOL grants. This confirms the quality and potential of our Kuska project. The Company has already performed much work to prepare for a CEOL application, now we will be able to submit an excellent package of information to obtain a CEOL for Kuska.”

Francisco Lepeley, CEO of Wealth Minerals Chile, commented

“This is an important step in the implementation of the National Lithium Strategy and is well oriented to increase Li production in Chile. Chile has the most competitive conditions in the world for Li production, and our Kuska project has the potential to be within the first or second quartiles of the cash cost curve globally.

In short, it is a great project in a great area. On the ground here in Chile, the team has conducted significant technical work, both in exploration and in direct lithium extraction (“DLE”) technology reviews, to satisfy the most discerning project reviewer. Also, we have built a close relationship with the local Indigenous community based on trust, transparency, and win-win project approach.”

How big a deal is this? It’s the most substantive development for Li in Chile since the National Lithium Strategy was announced 18 months ago. If Wealth is chosen for one of the six fast-tracked CEOLs, its PEA-stage Kuska project and five others will be a year or more ahead of the pack, making it extremely attractive to strategic partners.

Dozens of Auto OEMs, Li-ion battery makers, commodity traders & large Li producers will be looking at just six projects in Chile over the next year or two, and Wealth’s Kuska has a good shot at being one of the six.

This news couldn’t come at a better time as Li prices appear to have bottomed for this cycle. Production curtailments by CATL & others started a gradual uptick, but the rebound has been small so far. While disappointing that Li carbonate prices are not up more, it means that further supply cuts will be announced.

Last week China announced the biggest economic stimulus program since 2019 and signaled that additional stimulus measures would be taken before year-end. Copper & iron ore prices are up a lot on this news, and Li should benefit as well. Stimulus in China often includes tax incentives & rebates for buying EVs.

Kuska’s PEA delivered an after-tax NPV(8%) of US$1.325B, with an IRR of 25%. The Project compares favorably to other DLE/brine projects, (see chart below), especially with nearly 2x the grade. Kuska’s 80% recovery from DLE is good but may prove to be conservative as management has reviewed many DLE technologies.

All else equal, a 5%-10% gain in recoveries above the 80% assumed in the PEA would materially enhance the economics. Kuska’s grade of 179 ppm stands out vs. peers in the chart that average just 95 ppm, with seven projects under 75 ppm. Some of the companies hosting these riskier projects have larger valuations than Wealth Minerals’ C$24M.

The Company’s flagship 100%-owned, royalty-free Yapuckuta project could be worth more than PEA-stage Kuska, possibly a lot more. It’s a large landholding of 46,200 hectares less than 50 km north of ALB’s & SQM’s world-famous concessions. Notice the Li grade attributable to ALB in the following chart of 1,840 ppm Li.

In ALB’s latest annual report, the Chilean grade is shown to be 2,120 ppm Li! The Yapuckuta project has yet to be drilled, so there’s no Li grade info yet, but it has the potential to host excellent grades. Even a quarter of ALB’s 2,120 ppm would be fantastic.

Unlike in Argentina, there’s only a small handful of juniors with Li projects or properties in Chile, making them stand out. Giant companies would be wise to diversify battery metal interests across Africa, Australia, Argentina, Brazil, Canada, Chile, Europe & the U.S. Wealth’s Kuska project is now near the top of the list for exposure to Chile’s Li riches.

Investors in Wealth at C$0.08/shr., an enterprise value {market cap + debt – cash} of C$24M, are buying in at just 2%!! of after-tax NPV. However, more importantly, one also gets Wealth’s Yapuckuta project for free.

Management believes that with the right partner(s), its projects could produce 200,000 tonnes/yr., more than either ALB or SQM currently deliver. At that point, not before the early-to-mid 2030s, Wealth will likely own far less than 100%.

Yet, even if it owned 25% of 200k tonnes/yr., that would be bigger than LAAC’s/Ganfeng’s 40k tonne/yr. operation valued at > C$1.2 billion. As a bottom in Li sentiment is confirmed, and a Li price rebound is underway, I believe Wealth Minerals (TSX-v: WML) / (OTCQX: WMLLF) is a name investors should go for.

Readers are once again encouraged to read Wealth’s new corporate presentation which provides very substantial information on both the Kuska & Yapuckuta projects.

Disclosures: The content of this article is for information only. Readers understand & agree that nothing contained herein, written by Peter Epstein of Epstein Research [ER], (together, [ER]) about Wealth Minerals, incl. but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. is to be considered implicit or explicit investment advice. Nothing contained herein is a recommendation or solicitation to buy or sell any security. [ER] is not responsible under any circumstances for investment actions taken by the reader. [ER] has never been, and is not currently, a registered or licensed financial advisor or broker/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and does not perform market-making activities. [ER] is not directly employed by any company, group, organization, party, or person. The shares of Wealth Minerals are highly speculative, and not suitable for all investors. Readers understand and agree that investments in small-cap stocks can result in a 100% loss of invested funds. Readers assume and agree that they will consult with their own licensed or registered financial advisors before making investment decisions.

When this article was originally posted, Peter Epstein owned shares, options or warrants in Wealth Minerals, and the Company was an advertiser on [ER].

Readers should consider me biased in my view of the Company. Readers understand and agree that they must conduct their own due diligence above and beyond reading this article. While the author believes he’s diligent in screening out companies that, for any reason, are unattractive investment opportunities, he cannot guarantee that his efforts will (or have been) successful. [ER] is not responsible for any perceived, or actual, errors including, but not limited to, commentary, opinions, views, assumptions, reported facts & financial calculations, or for the completeness of this article or future content. [ER] is not expected or required to subsequently follow or cover events & news, or write about any particular company or topic. [ER] is not an expert in any company, industry sector, or investment topic.