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 Resources
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Lithium
About: Pan American Lithium Corp.
(PALTF.OB-OTC: QB, ; TSX-V: PL)
3040 North Campbell Avenue, Suite 110
Tucson, AZ 85719
Phone: 520-989-0020
Company Profile:
http://www.panamericanlithium.com/
Pan American Lithium Corp. (TSX-V: PL) (OTCBB/OTCQB: PALTF) is a junior
lithium exploration company which owns interests in eleven salar
projects with the potential to produce lithium and other metals from surface
lakes and subsurface brines, all located in the mineral-rich Atacama Region
III of Chile. The rights in these seven lithium salars cover a cumulative area in
excess of 20,000 hectares, all accessible via serviceable roads.
The Company also has an
option to acquire indirect interests in a geothermal lithium brines project
at the Cerro Prieto geothermal power plant located in Baja California,
Mexico, roughly 30 km south of the city of Mexicali.
 Andrew A. Brodkey
Chairman, President, CEO and Member of Audit Committee
Andrew Brodkey is currently President and CEO of four junior mining
exploration companies---Pan American Lithium Corp., Zoro Mining Corp., Titan
Iron Ore Corp. and Pacific Copper Corp., He has been a mining industry
professional for over 25 years, working with and for Fortune 100 companies
as well as junior mining entities. Brodkey earned a bachelor's degree in
mining engineering from University of Arizona in Tucson before obtaining a
law degree at Creighton University. He has worked as a mining engineer, a
mining lawyer and in minerals business development. As Vice President and
General Counsel for Magma Copper Company, and Vice-President, Business
Development for BHP Copper Inc., he successfully negotiated and closed
numerous complex domestic and international mining transactions, including
mergers and acquisitions, privatizations, recapitalizations, joint ventures
and partnerships. Immediately prior to entering the management of junior
resource companies, he was the founder and Managing Director of the CB
Richard Ellis International Mining & Metals Group.
Interview conducted by:
Bud Wayne, Editorial Executive,
CEOCFOinterviews.com,
Published – July 15, 2011
CEOCFO: Mr.
Brodkey, we last spoke in 2010, and at that time you had some exciting
things that were going on at Pan American Lithium although you were
relatively new and seeking a full Bulletin Board listing; so where are you
in that process?
Mr. Brodkey: We have come along way since the last time that we
spoke. I am pleased to report that the company has an exciting future and
has accomplished quite a bit since the middle of last year (2010). So yes,
we do have an OTC: BB and QB listing, under the symbol PALTF. That was
accomplished as of February of this year (2011), so we are fully trading in
the United States and U.S. investors can buy our shares directly on the Over
the Counter Exchange. We received that designation after getting full SEC
review of an F-1 filing statement that was rather lengthy and took quite a
bit of time to clear through the commission. That exercise was completed in
January, and thereafter we got our listing. Most of the lithium companies
and even natural resources companies in general in the world are found in
Canada, where we are also originally from, and also trade on the Toronto
Venture Exchange. However, there are just a limited number of lithium
companies that have been able to come across the border and make themselves
available and more freely tradable in the U.S. market. Therefore, we are
very happy that we were able to accomplish at least that part of the
equation this year.
CEOCFO: Are you still focused exclusively with lithium in Chile?
Mr. Brodkey: Since early on in the game, we have always had the
majority of our property portfolio located in Chile and we have expanded
that recently. However, we also have had, as of the first part of 2010, an
option to acquire an indirect interest on a lithium project in Mexico and
that continues to move along. It is moving a little slow, but we are in the
process of waiting it out and not having to do too much to keep the option
alive. We are paying a very nominal amount just to administratively keep
things going. This option is to acquire an interest in a company that has a
joint venture with some Mexican lithium brine concession holders. The
details that are being worked out through the Mexican regulatory agencies
and government will allow those concession owners to be able to exploit the
lithium brines that are being produced today from the Cierro Prieto
Geothermal Power Plant in Baja California, Norte Mexico. You are in a
situation where you have quite a bit of volume and good grades of brines
that are being put into existing settling ponds and our joint venture
partners, once we buy into the company, will have the ability to exploit and
process those brines. However, it has been a long slow process through the
Mexican regulators to get everything done, yet it does not cost us very much
to wait and see, to make sure that everything gets done correctly. Then we
will have a project and that will be for lithium, potash and other light
metals.
Our big area of emphasis has always been in Chile. In December of 2009, when
we started the company, we had interests in 9 Chilean properties. We have
since augmented that in February of this year (2011), when we signed some
agreements to amplify our property position at one very major salar, called
the Salar de Pedernales in Chile. We have added interests in 2 additional
lithium brines projects to our portfolio, so now we have interests in 11
different lithium brine projects in Chile. Our total land area of mineral
concessions subject to these lithium rights has increased from about 13,000
hectares to over 20,000 hectares of mineral concessions at 11 different
projects.
CEOCFO: Are your projects in the process of exploration?
Mr. Brodkey: Absolutely, and this is where our focus has been for the
last year and a half. The exploration is a key component for any mining
company, let alone lithium companies, to advance their projects and get
information in. At the time we spoke last year, earlier on in the year, we
were working on a resource estimate at our lead project, which is a surface
alpine brine lake called Laguna Verde. By the end of the 2nd
Quarter of last year we had an actual published Canadian National Instrument
43-101 resource estimate for the surface lake at Laguna Verde. The property
is much bigger than the surface lake and it contains quite a bit more brines
and a lot of exploration potential, but the lake was fairly easy to explore.
It is a lake of about 15 square kilometers in surface size. It runs about an
average of about 35 meters in depth and it goes as deep as 60 meters. Our
geologists tell us that it is essentially a “blown out caldera”, a volcano
that erupted fully and created a crater into which lithium bearing solutions
were ultimately deposited which created this fairly large lake. The resource
estimate number that we reported was over 4.2 million tonnes of potash and
512,000 tonnes of lithium carbonate in the lake -- in a published technical
report. Since then at Laguna Verde, we have designed some additional
exploration. We have not actually started on the exploration yet, but the
program will be to drill sufficient holes, as our expert hydrologists tell
us, into the basin itself, which is dominated by a volcanic rock called an
ignimbrite, a rock, with very good porosity which is a very good host for
additional brines. This rock underlies and surrounds the margin of the basin
beyond the surface lake. Therefore, we will do additional exploration, and
hopefully by sometime before the end of 2011 we will start that exercise at
Laguna Verde. However, because we already have a resource estimate started
and published, we are doing additional work at Laguna Verde on the technical
side.
We have commissioned a pre-scoping study with the University of Nevada at
Reno, which was just announced last week. They have some interesting
membrane brine concentration technologies that we would like to investigate
with our brines. So that exercise has just been kicked off. I cannot give a
timeline on it yet because we just started it, but we will certainly know
our results within a couple of months. If this technology, works, then we
can go into our scoping study at Laguna Verde and that will help us to be
able to design, just on the basis of the surface lake alone, what technical
processes are going to be the most ideal for recovering lithium from the
lake. Once we get done with the scoping study, we will move into
pre-feasibility. The scoping study will be about three months in duration,
the pre-feasibility will be another nine months and at the end of that time
we will have enough technical and economic data back to tell us whether we
really have a project at Laguna Verde. However, that is just one project out
of eleven. We are doing a lot more work at a lot of other places as well.
We also recently announced an update concerning one of our newer
acquisitions called the Llanta project, which is fairly close to the
capital, Copiapo, of Atacama Region III in Chile. We just started an
exploration program run by our expert hydrologists, Montgomery & Associates,
who are out of Tucson, where I happen to live. They are very learned and
very reputable hydrologists that work for some of our competitors in
Argentina, but they have not done any work in Chile yet. They designed an
initial drilling program to test the aquifer at the Llanta project to see
what we have got in terms of the types of data that you want to collect. So
we are going to start with three generally speaking, shallow holes, probably
no more than 100 meters in depth. That program is starting now and we will
probably have results back in a month or so. We will be able to tell the
brine quality. These will be diamond drill holes, so we will be able to look
at the cores and start to get the data back that one needs in a lithium
project. We will be able to assess how good your formation is, concerning
porosity, permeability, transmissivity, as well as all of the other
information is in that one needs from a technical perspective, to tell you
whether you have good enough brine hosting resource to be able to exploit
it. Therefore, everything is starting. We are very excited about the
exploration at those projects.
I mentioned earlier the
Rio de la Sal/Pedernales in Chile, which is one of our more recent
acquisitions. We did have an existing concession position there, but we
augmented it with another 4,000 hectares of mineral rights, plus water
rights at the Salar de Pedernales. We did some trenching at Pedernales late
in 2010. When we got the results back, it showed that we had some
magnificent lithium grades that were encountered in some of the trenches, as
high as 1,070 ppm with potash grades of over .8%, which are the type of
numbers that you want to be seeing. Therefore, the Rio de la Sal/Pedernales
is another area where we will have some exploration focus in 2011.
CEOCFO: Why Chile, why the Atacama Region, what made you believe that
lithium would even be there to begin this whole thing, what is the
infrastructure and how are things going with the Chilean government?
Mr. Brodkey: I’ll answer those questions in inverse order. There is
great road access to all of our properties year round for the most part.
Some of our salars are at very high elevation, at over 17,000 feet, so there
are times during the year when there is some snow that can be a bit of an
impediment. However, for the most part you can get to every one of our
projects 365 days a year. There are primary roads going to most the
projects, although sometimes you may have to get off road for short
distances with four wheel drive-- just for one or two of the projects. But
the bulk of our projects are on main roads that are maintained by the
provincial government, Atacama Region III. Electric power can be made
available at most of our properties. Laguna Verde, which is probably the
project that is furthest out, is probably 50 kilometers from the nearest
power line, so ultimately if it was determined to build a project there,
you would be able to bring power in at not a huge expense. Other than
electricity, you could utilize CNG, LNG or diesel for onsite generated
power. The general answer to your question is good infrastructure and more
specifically, Chile is the type of country where you have a very positive,
mining friendly environment. We have turned down projects in other
jurisdictions because they do not have the same risk profile, geopolitical
type risk, and mining friendly climate that you find in Chile. Chile is the
world’s largest copper producer. There is a 150 plus year history of the
mining industry being in Chile, and mining represents a huge percentage of
Chile’s gross domestic product. Irrespective of what type of government has
been in place, the government in Chile has been very supportive of the
mining industry in terms of political, economic and social stability. There
are many trained workers that work in the mining field. I have worked most
of my career in Latin America and have been involved in many of the other
jurisdictions in which you find lithium projects including Peru and
Argentina and I will tell you without hesitation that I find it much more
easy to work Chile. Therefore, Chile has always been our preference, and
even though we have been offered projects in Bolivia and Argentina, we have
decided that our flag is going to be planted firmly in Chile.
CEOCFO: Would you tell us about the outlook for lithium? By the time
you get your project rolling, will lithium still be a big play as far as its
use and needs?
Mr. Brodkey: We certainly expect that to be the case. The demand
growth of lithium has been very solid over the last decade and it is
expected to continue, particularly as you see lithium ion batteries
continuing to be deployed in more and in varied and different applications.
That sector of the lithium industry is expanding at about a 25% growth rate
per annum. The rest of the lithium industry, which has more traditionally
been found using in solvents, greases, lubricants and the ceramics
industry,is also moving forward, but at a much slower growth rate. However,
overall, we look at things in terms of consumption of lithium carbonate
equivalent tonnes per year. 2009 figures show that the world consumes
100,000 tonnes per year of lithium carbonate equivalent. Lithium carbonate
is actually, what goes into lithium ion batteries, once it is upgraded to
battery grade lithium carbonate. We produce lithium from an actual mining
project that is chemical grade. It goes through just one more step and
becomes pure enough to become battery grade. 100,000 tonnes is the current
consumption figure and most prognosticators expect that is going to triple
by the end of this decade. So by 2020, we will be up to 300,000 tonnes. Even
by 2025, the numbers are looking much more robust; maybe a half million
tonnes a year. The current large lithium producers are not in the position
today to match that demand growth. Therefore, that opens up slots for
companies like Pan American Lithium to explore, develop our projects and
bring them in. My answer quite frankly is that we expect fully to be able to
participate in the growth in lithium consumption. In addition, since we have
so many different projects in a great jurisdiction, and the ability to bring
them into production over the next four to five years, we will be able to
capture the upside of this demand and consumption trend.
CEOCFO: Are all of your projects 100% owned, and as you move forward,
do you see partnering as part of your strategy as well as is Pan American
Lithium looking to take your projects through to production?
Mr. Brodkey: We are a serious company and we have serious mining
people in this company. That is my background and that is the background of
everyone that I work with here. We are not a company that has been set up to
be sold to somebody else. Therefore, it has always been our intention to
explore our properties and if they merit it, then we would develop them and
bring them into production. Would we do that with a partner? Absolutely! If
and when the circumstances look like they would accommodate that type of an
arrangement. Since day one we have been open that we have been in
discussions with a number of potential partners. These are partners that
would be interested in a number of possible arrangements with us, either
off-take or equity participation in a project or even equity participation
in the company. The good thing about Pan American Lithium is that unlike
many of our competitors, we have 11 salars, and those are 11 potential
projects to deal with. So we can do one-off deals with potential strategic
partners without impairing our ability to do another deal with a different
company on a different project. We have always kept the door open and our
hope is that when it is all said and done, we will have multiple
relationships with different off-takes and different strategic partners, at
a number of our different locations.
CEOCFO: What is the current financial position for Pan American
Lithium; do you have enough in house to continue your projects or will you
need to raise funds?
Mr. Brodkey: We just completed a private placement with some finders
in Canada, including some U.S. investors, for gross proceeds of over
$600,000. That follows a similar, but slightly larger raise from October of
last year (2010), for about $800,000. Therefore, we are sitting ok as far as
the treasury goes for now. We have enough to finance ongoing exploration and
our burn rate for the time being. However, your question is good because
companies that are in exploration like Pan American, and our competitors as
well, burn money quickly. So we are regularly going back to the market. We
have retained a middle market New York based investment bank—Ladenburg
Thalmann, that is going to be assisting us with capital raises. They will
help us do a more complete assessment of our capital needs and go to the
market in a larger fashion to raise money for our projects. We have looked
at our capital requirements over the next two plus years and it may be $20
to $25 million, if we did all of this on our own and did not have the help
of any strategic partners. So even though we will not raise all of that
money at one time, the first tranche might be $3 to $5 million and that
might be something that we would be looking at in the next quarter or so.
Therefore, yes we are in the market, we do want to raise money, and we do
see the ability of strategic partners to help us take away some of that
capital requirement, but we are going to independently tap the market and we
do have help to do that.
CEOCFO: Are you reaching out to the investment community at this time
and are you as CEO involved in this process doing things such as road shows?
Mr. Brodkey: The answer is absolutely, and in a huge way; largely
because we view our company as being terribly undervalued. I have just
gotten back from a investor road show in New York and I am heading next week
to New York for another road show. The goal is to get more eyes on the
stock. We are a company that has wonderful projects, great locations, good
management, good technical results and everything is going wonderfully on
the ground. However, I have not done as good of a job of telling the market
about who we are and that is why our market capitalization today is somewhat
small, compared to many of our competitors. When you stack our projects up
that are in Chile, against certain competitors, you will see that our
projects are better and in the aggregate, bigger in terms of potential for
lithium and potassium resources. But some of our competitors have market
caps that are significantly higher than ours. So I shake my head and think
that it must be because I am not getting the word out sufficiently.
Therefore, that is clearly part of the plan. We just hired a new investor
relations firm out of New York called CEOCast.com, and they are assisting us
in their particular IR type of campaigns. We are hoping that people will see
that we are a hugely undervalued stock.
CEOCFO: In closing, why should potential investors consider Pan
American Lithium today?
Mr. Brodkey: We have a really strong, experienced management team.
These are professionals that are serious and desirous of putting some
lithium production onto the board and not just setting up a company. They
want to do the technical work necessary and bring in some projects that will
ultimately go to production. We feel that this company is a huge buy today
and that it is highly undervalued when you do peer comparisons and evaluate
where Pan American is at. We have 11 projects, where most of our competitors
have one or maybe two. We are in the right place being in Chile and very few
of our competitors are in Chile. Most are in Argentina or someplace else.
Lithium has a very exciting future and the demand curves are going very far
north very quickly, so we know that we are in the right space. We have a
world-class portfolio of properties that we are evaluating and we will be
able to bring one or more of those in along with the help of one or more
strategic partners. Stay tuned, there is a lot more coming as we are doing
road shows and getting the word out. Therefore, there is a bright future
ahead for Pan American Lithium.
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PALTF.OB-Print Version
Lithium Stock, PALTF, Resources Stocks, CEO
Interviews, 2010, Pan American Lithium Corp. (PALTF.QB: OTC BB, TSX-V: PL),
Junior Lithium Exploration Companies, Recent CEO Interviews, lithium
exploration in the Atacama Region III of Chile,
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