Sienna Resources: Clayton Valley’s Lithium Dark Horse
Sienna Resources is one of three companies who have acreage in the deep section of the Clayton Valley Lithium Basin
Nevada’s Clayton Valley has become the world’s hottest lithium zone since Tesla proclaimed that its mammoth Gigafactory would source 100% of its raw materials from inside North America. Tesla’s demand for lithium is set to help fuel a steady annual increase in demand of between 7%-10% (Canaccord Genuity is even more bullish with a 14% CAGR estimate between now and 2025) which, as it stands now, could create a supply/demand shortfall of roughly 180,000 tonnes by 2025 (supply of 300,000 tonnes with demand of 480,000 tonnes).
As the world’s thirst for “the new gasoline” grows electric vehicle manufacturers and investors alike have begun to turn their attention to the western US state of Nevada, home to Clayton Valley and some of the world’s largest lithium deposits. The lithium brines of Clayton Valley are some of North America’s largest and highest grade lithium deposits, and the Clayton Valley is also North America’s only producing lithium brine basin.
Sienna Resources Inc (TSX-V: SIE, OTC: HBNRF, FSE: A1XCQ0) is one of three lithium explorers (others are Albermarle-US$9.2 billion market cap, and Pure Energy Minerals) who have been fortunate enough to have acreage in the deepest sections of the Clayton Valley Basin; Sienna’s “Clayton Valley Deep Basin Lithium Brine Project” is located directly between and bordering Pure Energy Minerals Limited (PE.V – C$77 million market cap) and Lithium X Energy Corp (LIX.V – C$110 million market cap). Sienna is in good company given its neighbor Pure Energy has 10x the market cap (Sienna has a C$7 million market cap) and can boast a deal with Tesla to its credit, whereas its other neighbor Lithium X is arguably the hottest lithium explorer of 2016. When we look at the landscape in the Clayton Valley it is clear that Sienna has a lot of potential room to grow when you look at the progress made by both Pure Energy and Lithium X.
Pure Energy is focused on utilizing cutting edge lithium extraction technology currently being developed by Tenova Bateman which bypasses the standard water evaporation process. If Pure Energy has success with this new technology then Sienna Resources (SIE.v) is in a prime location to take advantage. Some highlights of this cutting edge lithium extraction technology courtesy of the Pure Energy Minerals website:
Faster – 8 hrs vs. 1-2 years (not weather dependent)
Better use of resource – >99% Li extraction vs. 40%-50% Li extraction
Higher purity – battery grade >99.9%
Sustainable – spent solutions suitable for reinjection vs. large waste piles
Compact and Cheaper – small 100m x 100 m footprint vs. 4000+ acre ponds
Weather – non-issue vs. dependent variable
Ability to recycle – capture massive future market demand vs. no recycle
Feed solution – suitable for brines with Li >20 ppm vs. higher conc req.
We connected with Sienna President Jason Gigliotti late last week and he offered the following assessment:
“I believe that the best and mostly likely chance for any new discovery of lithium in Nevada will be within the basin we are in. We are pleased to be one of the few companies that have property within the only known lithium brine basin with production in North America. Saline brines are higher density than fresh or brackish water and therefore tend to sink. Based on this, management is optimistic regarding this project as we are located in the deeper sections of this basin. Our goal would be to test this theory as no one has drilled to the deepest sections yet. Considering our property lies in the deepest sections of this basin, other than Pure Energy, we feel that this gives Sienna a potential that no other company can claim for a potential lithium discover as Sienna actually has the ability to test the deepest sections of this basin.”
Mr. Gigliotti has also been an active and aggressive buyer of SIE shares on the open market with recent acquisitions totalling more than 800,000 shares at a cost basis just under C$.22 per share:
Source: Canadian Insider
Strong insider buying is always a positive sign which other investors have certainly noticed in SIE. From a technical chart perspective, SIE shares have been consolidating since breaking higher on heavy volume in early June:
Signs of accumulation in recent days with a breakout above C$.24 targeting C$.32+
Sienna Resources is an interesting investment opportunity with a great deal of momentum behind it (hot sector, insider buying, strong chart technicals, etc.). We look forward to hearing more from Sienna Resource over the coming months as the North American lithium bull market story progresses with Tesla regularly upping the ante in terms of its production goals and timeline.
The article is for informational purposes only and is neither a solicitation for the purchase of securities nor an offer of securities. Readers of the article are expressly cautioned to seek the advice of a registered investment advisor and other professional advisors, as applicable, regarding the appropriateness of investing in any securities or any investment strategies, including those discussed above. Sienna Resources (SIE.V) is a high-risk venture stock and not suitable for most investors. Consult Sienna Resources’ SEDAR profile for important risk disclosures.
EnergyandGold has been compensated to cover Sienna Resources and so some information may be biased. EnergyandGold.com, EnergyandGold Publishing LTD, its writers and principals are not registered investment advisors and advice you to do your own due diligence with a licensed investment advisor prior to making any investment decisions.
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