2024-03-18 11:34:09 ET
Summary
- According to recent news and the company's last presentation, a $2.26bn loan from the Department of Energy could be imminent.
- This news is material and unlocks the funding of the phase I project, associated with a 40k/year expected production of Lithium LCE by 2028.
- Using a long-term Li price of 25k/t, calibrated on the marginal producers of the cost curve, and a WACC of 9%, I estimate the NPV of phase I at $1.5bn.
- This represents a $10/share price target and a 59% upside on the current price. On top of that, you have a free option on phase II.
- I rate the company as a strong BUY.
My thesis
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For further details see:
Lithium Americas: With DoE Financing Imminent, Large Value Is Unlocked