2024-02-16 02:05:00 ET
Summary
- Investing in the Lithium mining and processing industry has gotten very tricky.
- Currently, we remain, at a small size, invested in two lithium mining firms, Lithium Americas and Lithium Argentina.
- We view LAAC as a compelling value play with a de- risked producing asset and the potential to reinvest capital at high rates of return via the development.
- LAC has many strengths: strong management, strong backing, a first-of- a-kind flow sheet.
The following segment was excerpted from this fund letter.
Lithium Americas ( LAC )
Lithium Overview and Position Update
Investing in the Lithium mining and processing industry has gotten very tricky; this is perhaps no surprise; after all, the sector was nascent just a few years ago and is now taking center stage in a global transportation transition. Furthermore, for those who do not follow these things as closely as we do, the spot price sold off roughly 75%-80% in 2023, depending on what price index you are looking at, having risen close to 800% from the 2021 low to the 2023 peak. At the same time, the contracted prices that key producers received in 2023 were higher than those received in 2022. A significant divergence has emerged between the transparent but little-used spot price and the opaque but industry-standard contracted prices....
Read the full article on Seeking Alpha
For further details see:
Massif Capital - Lithium Americas: Why We Still Own LAC And LAAC