Micro-Cap Announces LOI to Acquire Lithium Mining Company

By: AllPennyStocks.com News

November 27, 2009
According to theory, lithium was one of the few elements synthesized in the Big Bang, and this week, a small cap company tried to create something of a big bang by going the acquisition route. California-based Li3 Energy Inc. (OTCBB:LIEG) announced it had signed a letter of intent to pick up Next Lithium Corporation.

Next Lithium has options to acquire 100% interests in a clutch of claims totaling 75,000 acres of lithium brine mineral properties located in Big Smokey Valley in Nevada, a mere stone’s throw from Rockwood Holdings' Silver Peak Mine, the only producing lithium mine in the United States. The claims include historic lithium exploration wells from work programs conducted by the United States Geological Survey, with grades up to 300 ppm.

This is significant because of lithium’s useful properties in the world of medicine, particularly in treating patients with bipolar disorders, headaches and migraines. We should not forget either lithium’s place in batteries, mobile phones and optical modulators. In short, there is a market for this substance and LIEG appears to have done itself proud by moving forward with this aggressive transaction.

The transaction is subject to legal and financial due diligence by Li3, which is expected to be finalized within the next 90 days.

Li3 Energy is an early-stage company, with U.S. headquarters located in Walnut Creek, which is currently pursuing a business strategy in the lithium mining sector, seeking to acquire significant lithium brine deposits for development and production to meet the growing market demand mentioned earlier.

The company, which only the week before was known as NanoDynamics Holdings, Inc., also announced this month a 15.625-to-1 forward stock split in the form of a dividend, with a record date of November 20, 2009. Its world headquarters are centered in Lima, Peru, its aim is on South American mines, its goal to assume a world-leading position by acquiring a significant portfolio of South American lithium brines. Another objective is to become the consolidator of choice for South American companies.

LIEG CEO Luis Saenz told reporters the day of the Next Lithium acquisition his company expects to start confirmatory drilling as soon as possible after due diligence is completed, and added the firm is in negotiations on properties in Chile and Argentina, and cautioned them to listen for announcements soon on those fronts.

LIEG appeared to have tuned out all the fallout from the Dubai situation and scaled yet another 52-week high on so-called Black Friday, the day after Thanksgiving, to an intraday high around 58 cents, well above its all-time closing high of 50 cents the same week. The stock closed just under that level, at $0.45 on Nov 27th. The 52-week low was three cents in mid-November of last year, not accounting for the stock split and the name change.

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