Hazards also exist in the speculative Clayton Valley lithium rush, but a few of the jockeys are quite experienced.

Hazards also exist in the speculative Clayton Valley lithium rush, but a few of the jockeys are quite experienced.

(Editor’s Note: Lithium has been a hot topic in CEO Chat of late, as Tesla Motors’ Gigafactory takes shape in the Nevada desert. In a future where batteries take centre stage, powering everything from Elon Musk’s electric cars to electronic devices to residential power systems, lithium supply becomes crucial. That presents opportunities for speculators, and Nevada’s Clayton Valley is experiencing a lithium rush featuring a familiar cast of characters. In this lightly edited post, CEO Chat regular @50YearBeckFan weighs in with one approach to investing in the highly speculative space.)

When investing in junior miners, it usually pays to bet the jockey, not the horse. The top 4 jockeys on the “Yorkton Lithium Express” are Bob Cross, David Shaw, Frank Giustra and Trevor Wilson. Let’s take a closer look at their race-track records.

Betting on the Yorkton Lithium Express is like playing the trifecta. It’s like having 3 Bill Shoemakers riding Triple Crown winners American Pharaoh, Secretariat, and Seattle Slew all in one race.

The Triple Crown of Nevada’s emerging lithium play is Pure Energy Minerals (PE-V), Nevada Sunrise Gold Corp. (NEV-V) and Royce Resources (not listed yet).

David Shaw (Nevada Sunrise)
David Shaw, an advisor to Nevada Sunrise, is more than qualified to get the job done down in the Clayton Valley.

In 2009, David was Chairman of Salares Lithium Inc., which was acquired in 2010 by Talison Minerals. Shaw became a director of Talison Lithium, the world’s largest pure lithium company, until it was acquired by Chengdu in 2013 for over CDN$800 million.

Shaw is a brilliant structural geologist. I know this because he has inferred it several times, with his cocky Sheffield accent. He is also very lucky – and I will take cocky and lucky, over smart every time.

In 1994, Shaw was Senior Mining Analyst at Yorkton Securities. He travelled continuously between South America and Europe, and was No. 1 in travel miles for Air Canada. Shaw and Yorkton financed Corriente at 0.35 in 1994. It peaked a few years later at around $19.

Trevor Wilson (Nevada Sunrise)
Trevor Wilson is also an advisor to Nevada Sunrise. What can you say about a gentleman that started his career on Howe Street 51 years ago! Dominion Securities? Impressive.

Bob Cross (Pure Energy)
Most of us know that Pure Energy advisor Bob Cross was Chairman and CEO of Yorkton from 1996 to 1998. I forgot that he was also a partner in Gordon Capital from ’87 to ’94.

Billionaire Richard Li also became a partner in Gordon Capital that year. He’s the son of Li Ka-shing (worth US$25.8 billion), who recently spent US$44.1 million (4%) on Hong Kong-based FDG Electric Vehicles Limited.

Cross is chairman of Bankers Petroleum, and at one time held over 25 million shares. In the spring of 2011, the stock peaked at $9.92, which was very close to a quarter billion dollars.

I was impressed to find out that General Wesley Clark is on the board of $BNK, and wonder how many times Bob needed (or will need) a Rolodex favour?

Frank Giustra (Royce Resources)

Wikipedia and CEO.CA cover him better than anyone:
https://en.m.wikipedia.org/wiki/Frank_Giustra
http://blog.ceo.ca/category/people/giustra/

Could lithium become the new oil?

And that’s not including all the other firms that are getting in on electric cars, including the Warren Buffett-backed Chinese electric-car company Build Your Dreams, which has ambitions on a similar scale to Elon Musk’s Tesla Motors.

Related reading: Fuelling Tesla – Millenial and mining legend join forces in Nevada Lithium Rush | CEO.CA

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At the time of posting, members of CEO.CA are long $ROY and $NEV. Many of the stocks mentioned are highly speculative, extremely risky and not suitable for most investors. This publication may contain errors and is not a recommendation to buy or sell any security. Always do your own due diligence and consult a licensed investment advisor prior to making any trading decisions.