“The supply-and-demand balance for lithium fell into deficit in 2020 for the first time in years, according to commodity analysts at CRU. For 2021, the firm is forecasting lithium demand of about 450,000 metric tons, exceeding supply by roughly 10,000 metric tons,” as noted by The Wall Street Journal.
That’s all great news for lithium producers, like Lithium Americas (LAC), which was just initiated with a buy rating at B. Riley with a $25 price target.
All thanks to the miner’s “compelling” Thacker Pass project in Nevada. The analyst says, “domestic projects offer several inherent advantages over overseas imports, particularly lower freight rates and sourcing risk, which will lead to local lithium projects such as Thacker Pass outperforming foreign suppliers in the long run,” as quoted by Seeking Alpha.
Details on the Thacker Pass project include:
- 100% owned by Lithium Americas with offtake rights uncommitted
- Nearby infrastructure including rail, paved highway and power
- Long-term mining contract with North American Coal
- Permitted for construction and operation with ROD issued January 15, 2021
Even Albemarle Corporation, was recently upgraded by Loop Capital analyst Christopher Kapsch to a buy from a hold with a price target of $187 from $160, according to Barron’s. “Reflecting several bigger picture developments… we have become incrementally more positive on the lithium space, and [Albemarle] more specifically,” he noted.
Lithium Americas (LAC) Recently Reported Earnings
Net loss for the year ended December 31, 2020, was $36.2 million compared to net income of $51.7 million for the year ended December 31, 2019. Net income in 2019 was a result of the gain on dilution of interest in Caucharí-Olaroz, as noted in a company press release.
In addition, construction activities at Caucharí-Olaroz continue to advance with enhanced health and safety protocols in place. With regards to its Thacker Pass property, on January 15, 2021, the US Bureau of Land Management issued the Record of Decision following completion of the National Environmental Policy Act process.
Also, the Company continues to evaluate partnership and financing opportunities for Thacker Pass, including the possibility of a joint venture partner. It also contemplates that the feasibility study will include an initial production capacity greater than 20,000 tonnes per annum of lithium carbonate equivalent previously considered.
At the time of this writing, Ian Cooper did not hold a position in Lithium Americas (LAC).
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