We now have a price on that lithium snake oil

Admiralty Resources (ADY.ax) is an Australia miner with an iron ore operation in Chile. However its real appeal up to now was its ownership of a heap of the finest untapped Lithium brine prospects in the world up in the Andean highlands where Argentina meets Chile

Tonight ADY.ax announced they'd sold their lithium plots to a certain "Charge Resources Pty Ltd" for A$36.281m (that's a touch over U$24m at today's rate). Here's the press release so have a good look at the details yourself.

Tonight's deal underscores what I said in this post way back when all things mining were still fab and unscrupulous junior mining companies (esp. from Canada, big surprise) were still jumping on this latest fashion bandwagon to try and sucker in another relay of innocent retail investors: LITHIUM PROSPECTS ARE SNAKE OIL.

Let's get this straight as a die; the ADY.ax prospects just sold are arguably the best and most prospective untapped reserves out there. Period. The production plan has their sites good for 17,000MT of lithium production per year, which at today's market price would bring in a cool $100m or so in gross revenues. The capex needed to build the production facility would come in at (an estimated) modest $110m. And don't worry about reserves, because we're talking 400 years of brine (yep, four hundred) at the planned extraction rate. The in-situ reserves are worth billions.

This is the best there is out there, with those potential numbers that would cover your whole outlay in three years max and allow to make tens of millions in net profits every year until man lands on the planet Zog..... and it goes for just U$24m? If you don't smell fishy smells by now, then I suggest you stay out of mining investment forever. Tonight, ADY.ax is up about 3% on the news, standing at 3c or so per share. That's all it's worth, frankly. In June it traded eight times its present value, firmly in the mid-20s. I didn't like it then and I don't like it now. And be clear, if ADY.ax had the best lithium sites on offer just imagine how bad the recently staked ones are......

Otto sez: Hear the word "lithium" from a junior miner's investment relations department and run like hell.

A BIG THANK YOU TO REGULAR READER "EB" FOR HANDING THE PRESS RELEASE ON TO ME TONIGHT. THAT WAS ABOVE AND BEYOND THE CALL OF DUTY, EB. MUCH APPRECIATED.