Stifel GMP on Thursday maintained its buy rating on the shares of Lithium Americas (LAC.TO, LAC) and its US$10.00 price target after the company formed a joint venture with General Motors to build and operate the Thacker Pass lithium project in Nevada.
"Lithium Americas and General Motors have announced the plans for a Joint Venture between the two companies to build and operate the Thacker Pass lithium project in Nevada. Under the terms of the agreement, GM will contribute ($430MM cash + $195MM Letter of Credit) $625MM in exchange for 38% of the JV. Following this announcement, we highlight the proposed deal as a significant de-risking milestone that makes Thacker Pass substantially funded. With closing on the DoE loan and subsequent Final Investment Decision now imminent, we note the potential for a re-rate upon full financial derisking given the company's currently discounted valuation (0.39x NAV @ $20,000/tonne lithium carbonate) and proven re-rate pathway via incremental construction de-risking," analyst Cole McGill wrote.
(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)
Price: 4.84, Change: +0.32, Percent Change: +7.08
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.