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Tuesday, March 15, 2011

Cormack Securities iniates coverage of Talison Lithium, with a buy recommendation.

Talison Lithium Limited (TLH - TSX)
Fortifying Its Position As A Top Producer - Thursday, March 10, 2011

Over the last 12 months, Talison Lithium has made significant strides in growing its investor base and solidifying its position as the largest producer of lithium concentrate in the world. The company recently completed the first phase of expansionary work at its wholly owned Greenbushes mine near Perth, Australia and has set out to double its production capacity to an estimated 110,000tpy LCE per by F2013. Concurrent with its recent listing on the TSX, the company also purchased the Salares 7 lithium brine project in Chile. As such, Talison offers investors exposure to its current and growing spodumene production at Greenbushes, exploration upside from the brine projects at Salares 7 as well as leverage to accelerating lithium demand. Our outlook for the lithium sector remains positive. Demand for lithium, driven primarily by the growth of electric vehicles, is set to grow exponentially over the longer term. On the supply side, while there is no shortage of lithium deposits, customers are becoming highly discriminating, valuing security and quality of long-term supply. This is a customer base that Talison is ideally suited to satisfy. As the company executes on its growth strategy in both mineral and brine supply, it continues to solidify its position as the world’s top supplier of lithium. Based on a blend of our NAVPS and forward EBITDA, we are initiating coverage on Talison Lithium with a Buy recommendation and C$7.50 target. (Research Comments)
During the past twenty-four months, Cormark Securities Inc., either
on its own or as a syndicate member, participated in the underwriting of securities
and/or provided financial advice regarding stock market insight and financial analysis
regarding potential transactions for certain of these companies.

Recommendation Terminology
Cormark’s recommendation terminology is as follows:
Top Pick: our best investment ideas, the greatest potential value appreciation
Buy: expected to outperform its peer group
Market Perform: expected to perform with its peer group
Reduce: expected to underperform its peer group
Our ratings may be followed by "(S)" which denotes that the investment is speculative
and has a higher degree of risk associated with it. Additionally, our target prices are
based on a 12-month investment horizon.

For a complete disclosure of potential conflicts of interest please refer to our website
at or call 1-800-461-2275 and ask to speak to the research coordinator.

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