Quote Originally Posted by SBQ View Post
Quite frankly, almost every one of those junior lithium mining stocks will go bust over the next 10 years. The large established mining stocks like Rio Tino, don't even have a major presence in lithium production at the current levels. It takes several years to get lithium mining sites online... costing BILLIONS. The likely outcomes or best case scenario is by joint venture with the larger lithium companies. If the concentrates in the ground aren't high enough, and the negotiation around the contracts are not clear, then nothing will happen.
Yes it does pay to be selective, and a lot will depend on someone's risk appetite. At the moment all the in-production lithium miners have market cap's well into the billions as do some of the under construction mine's. If you were to successfully identify a small junior (sub $50k market cap), 1000% and higher returns are possible. If you have a portfolio of 5 and for go bust and one does 10x you will come out ahead. As is usual, a lot of the new entrants that are yet to even get a drill bit into the ground are high risk. No doubt about it, but that's always been the case with pre-drilling juniors.

IMO an area that has potential for extremely strong gains while minimising some of the risk is Juniors that have the following:
>A JORC resource that is in the multi-million ton's and at a grade comfortably above 1%
>Have cash balances well into the millions, ideally around or over $10m
>Have a Spod not Lepidolite (purple) lithium resource
>Have done the test work to confirm the ore can be concentrated to around 6% with a recovery rate above 60%, ideally 70-80%+
>Are no more than a few hundred kilometers from ports and have major roads for most of this distance
>Have active drilling programme to expand this resource

Having all of these factors increases the companies market cap, typically into the hundred's of millions but should also decrease the failure rate of the companies that are invested in. Quite a few will no longer be listed in five years, but that's because there is likely to be a wave of M&A activity.