Pan American Lithium Speaks Softly But Carries Real Lithium Potential

By Jonathan T. Orr and James West
MidasLetter.com
Thursday, March 4, 2010

With the image of millions of cars powered by electric batteries dancing in their heads, lithium has
investors charged up. The question is who will be able to drive this nascent market forward? Well
Pan American Lithium Corp (TSX.V:PL) is a stellar example of why we provide continuous
coverage: from promise to punch in the space of two months in a market that could make some
people very wealthy indeed.

The future of the lithium market is often spoken of in breathless terms by market and media
pundits alike as having the potential to be the next runaway boom market. The language used to
describe the future of lithium is often outrageously hyperbolic and the less frantic voices of those
who have taken a more measured approach are often drowned out by the high blown rhetoric of
market analysts and the often-exaggerated claims made by exploration companies working in
unproven territories.

The Promise & The Problem

Although lithium prices have tripled in that last decade and are now averaging US$6,000 per ton,
a new problem has arisen. There have been many reports that claim there simply are not enough
lithium reserves to meet the explosive demand that will be created by the impending mass
production of electric cars.

In the race to become pioneer producers of lithium, Pan American Lithium Corp has relied upon
their deep focus and characteristic patience to take them the distance. Now with the very
promising results of the most recent survey conducted on its wholly-owned Laguna Verde Project
located in Atacama Region III, Chile, they look set to be among the first to cross the line.

Other junior exploration companies have bounced from region to region trying to find properties
with massive reserves but these have proven to be hugely expensive to extract, in politically
unstable areas and ultimately unproven. Pan Am has chosen instead to remain committed to the
development of its Laguna Verde property in Chile and their dedication is about to pay off.

Demand is Certain: Who Can Deliver?

There are myriad junior exploration companies exploring for Lithium but few who can package
expertise with proven access and stellar properties and deep project management experience.

Pan Am CEO Andrew Brodkey certainly isnʼt one for the usual hyperbolic language or one to
make claims that he can't back up. He spoke to Midas letter of a modest and measured
approach, words most would of us not associate with the resource industry. Speaking of the
entire dazzle surrounding the precious white metal Brodkey joked, “ … you donʼt want to punch
the industry in the mouth.” Itʼs an off the cuff remark but his point is that when the hype is boiling
over smart investors will go with company that speaks quietly and carries a big potential.

And although Mr. Brodkey speaks of a deliberate company approach to exploration he is clear
about the companyʼs prospects stating, “We simply have quality brine salar properties with clear
access and low production costs, several of which contain unique surface lake features which will
allow us to be among the first if not the first into production”. He goes onto point out that many
companies donʼt have offtake outlets but with Pan Am we are targeting to sell nearly all we extract
to strategic partners”.

This straightforward speaking is characteristic of a company with confidence built upon results
rather than rhetoric. Earlier this year MidasLetter.com called Pan Am as ʻpossibly the best junior
lithium playʼ and we are very happy to remove the word ʻpossiblyʼ from that sentence. This all
from a company only recently listed on the TSX-V.

Although weʼve warned of speaking in hyperbole letʼs be clear:

• Proven explosive demand with imminent switch to hybrid battery powered vehicles;
• Growing demand for use in rechargeable batteries that power laptop computers, digital
cameras and cell phones;
• Lead project is an easily accessible property containing a surface lake in the “lithium
triangle” ,widely regarded to have the worldʼs largest lithium reserves;
• Political stability in the mining-friendly country of Chile;
• A powerful purchasing partner in POSCO.

Put simply: the world will soon be begging for Lithium and Pan Am plan to give it to them.

Deep Lake, Deep Prospects: The Laguna Verde Project

The company continues to move from strength to strength having recently announced initial
results of a bathymetric survey conducted on its wholly owned Laguna Verde Project located in
Atacama Region III, Chile.

The results determined the depth of the lake at 17 sample points and is part of an ongoing
detailed sampling program to determine a National Instrument 43-101 compliant resource
estimate, expected to be finalized by April 30, 2010. The deepest sounding taken was 60 meters
and the average mean depth of the lake is estimated to be 33 meters. At each point a brine
sample was taken at minimum depths of 0.5 meters. The UTM (Universal Trans Mercator) grid
coordinates and the lake bottom depths are as follows:

The Project has the clear advantage of being an above-ground lake, and its brine waters can be
readily sampled and represent a potential resource that can be calculated quickly, and with a
production cost that could be the lowest among other sources of lithium.

Patience & A Plan To Production

From the companyʼs release:

"In light of the preliminary results of this survey, Pan American intends to focus its
sampling program to systematically collect brine waters of the lake at various depths, at
the same coordinates, using specialized sampling equipment. These samples will be
submitted for analysis to an ISO-certified laboratory. Concurrently, the Company will
continue to take depth measurements of the lake in order to confirm an estimate of its
volume. The Company expects to deliver the results of this phase of the scoping study
sometime during the first calendar quarter of 2010." Editor's note:The earthquake in Chile
may have the effect of delaying this timeline slightly.

In addition to Laguna Verde Pan Am also has an existing portfolio of rights in nine salars in
Region III of Chile covering a cumulative area in excess of 11,500 hectares and the option to
acquire an interest in a geothermal brine project in Mexico.

Stay The Course

Itʼs clear that, as with anything we remove from underground, all sources are not created equal
and many of the ʻnew kid on the blockʼ sources for Lithium deposits may be of poor quality or
more expensive to extract than established deposits. One of the globeʼs foremost and respected
lithium experts Keith Evans has said of companies trying to cash in on the lithium buzz
“…exploration activity has exploded. They all hope to find sources that can be competitive, (but)
Chile and Argentina have sufficient reserves for billions of years.”

We may not have billions of years to use all that Lithium but it clear that it will powering our
immediate future. As the auto industry tries to find a way to survive in a world with dwindling oil
and a customer base demanding green forward thinking and vehicles it will be compelled by
government and economic pressures to truly embrace a battery powered future. An industry of
that size does not take risks with suppliers. It will turn to pioneers who have proved themselves
with diligence and the hard results that that produces.

There are myriad junior exploration companies exploring for Lithium but few who can package
expertise with proven access, stellar producing properties and the hard won knowledge of a
pioneer. Pan American Lithium may not be the loudest one at the lithium party but are certainly
the ones who smart investors will want to talk to in the morning.

Follow the companiesʼ progress at: http://www.panamericanlithium.com