Oreninc initiated coverage on Lithium One (TSXV:LI) today. Lithium One is developing a brine property in Argentina and a mine in Quebec. The company received a relative overall grade of B+. Although we are still waiting on further exploration to confirm their resource quality and size, we feel Lithium One is positioned to deal with changes in lithium demand, provide a large amount of lithium, and put the risk of failure on its partners.

Lithium one faces the same central risk that all their competitors face. Lithium supply might be leaps and bounds ahead of demand for some time, forcing lithium prices to drop. Lithium is a limited market, so even if only one or two feasible projects are built, supply could significantly outstrip demand. It is also a volatile market. Demand is tied to government regulations, oil prices, supply problems and seemingly random bursts of enthusiasm for hybrid/electric vehicles.

Lithium One faces a final risk shared by its competitors. Solar brine operations have an 18-month supply chain process. This creates a significant lag between market demand beginning or ending and the supply chain turning on or off. However, by holding both mine and brine projects, Lithium One is in a strategic position to maneuver around shifting demand.

On valuation, the company received an A because, of the companies that look like they might have a shot at developing a project, we think they are the most undervalued.

We invited the general public to read our reports, available at www.oreninc.com.

Oreninc is currently releasing coverage on all lithium companies traded on the TSX with a market cap between $10 million and $500 million. Oreninc is the only research firm providing independent, relative full-sector coverage of micro-cap equities.

Oreninc holds all junior companies to a standard of relative value by grading on an academic curve. Our reports uniquely separate the company from the commodity and the commodity from the general market. We have a diverse research team of 10 made up of people with backgrounds in geology, finance, quantitative analysis, medieval history, and other useful fields.

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