Lithium Americas Should Begin Producing Lithium in 2023 Ahead of Planned Separation by End of Year

Strategist

Seth Goldstein

Revenue is the money generated from normal business operations. Gross Profit is revenue minus cost of goods sold. Operating Income is revenue minus cost of goods sold and other operating expenses.

Revenue

Gross Profit

Operating Income

Revenue & Operating Income

Net Income, also called net earnings, is calculated as revenue minus cost of goods sold, operating expenses, depreciation, interest, taxes, and other expenses.

Net Income

Gross Profit, Operating Income, and Net Income as a percentage of Revenue

Gross Margin

Operating Margin

Profit Margin

Margins

An operating expense is an expense a business incurs through its normal business operations. Often abbreviated as OPEX.

Exploration and evaluation expenditures

General and administrative expenses

Equity compensation

Organoclay research and development

Operating Expenses

Year over year growth in Revenue and Operating Expenses.

Revenue Y/Y

OpEx Y/Y

Growth

Shares outstanding refer to a company's stock currently held by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company's officers and insiders.

Outstanding Shares

Market Cap

Also known as Price/Sales Ratio. Calculated using Average market cap for the quarter / Annualized quarterly revenue.

Revenue Multiple

Lithium Americas aims to become a low-cost pure-play lithium producer. The company has no current lithium sales volumes but is developing three resources that should eventually enter production, with the first project to begin selling lithium in the second half of 2023. Cauchari-Olaroz and Pastos Grandes are brine resources located in northwestern Argentina. Thacker Pass is the company’s clay resource in the U.S. state of Nevada.

As electric vehicle adoption increases, we expect maintained double-digit annual growth for lithium demand. Lithium Americas should benefit as there should be more than enough demand for company’s three resources to enter production and expand capacity over time.

At Cauchari-Olaroz, Lithium Americas owns 44.8% of the project, while Ganfeng, one of the world’s largest lithium producers, owns 46.7%. The remaining 8.5% stake is owned by JEMSE, an Argentina state-owned mining company. Once Cauchari-Olaroz enters production and begins ramping up volumes, the project should have a similar cost position as other Argentinean brines, such as the resources of narrow-moat Livent and Orocobre. The project is finishing construction on an initial 40,000 metric tons of capacity, with plans for additional expansions.

It owns 100% of the Pastos Grandes project. Located in Argentina, Pastos Grandes is currently under development. LAC also owns a 65% stake in a neighboring project in the same salar. The two projects will likely be consolidated into one.

The firm owns 100% of the Thacker Pass resource, which began construction in early 2023. Thacker Pass would be the first clay-based lithium resource to enter production globally. Currently, all lithium is produced from either brine or hard rock mining. Thacker Pass plans on bringing on 80,000 metric tons of capacity by 2030 with future expansions thereafter.

The firm plans to separate into two businesses by the end of 2023. Current shareholders will receive shares of the second company, which will retain the Lithium Americas name and be listed in the U.S. The existing LAC company will be renamed Lithium Argentina and will contain Cauchari-Olaroz and Pastos Grandes. Lithium Americas will contain Thacker Pass.

Business Strategy & Outlook

We assign Lithium Americas a no-moat rating. The company currently does not have any projects in production and is not generating revenue. However, we view the company’s three lithium production resources as a having the potential to generate excess returns on invested capital due to low cost of production.

Globally, lithium has been produced from either the evaporation of brine or the mining of spodumene minerals. Lithium Americas, along with partner Ganfeng, is currently in construction phase of its lithium brine project in Cauchari-Olaroz in Argentina’s Jujuy province. With aims of production in late 2023, the Cauchari-Olaroz should eventually have a similar cost position as other Argentinean brines, such as the resources of narrow-moat Livent and Orocobre. 

The Cauchari-Olaroz project will pump brine from the underground aquifers above ground into reservoir-like evaporation ponds to allow the brine to concentrate. With much of the water evaporated, the remaining salt can be processed into lithium derivatives, including lithium carbonate. In general, producing lithium carbonate from brines in Argentina costs less than when starting from spodumene or other brine resources with the exception of resources in Chile.

While the Cauchari-Olaroz project will have lower concentration levels and less desirable climate conditions than those of Chilean peers, Argentinean lithium brines sit in the bottom quartile of the global lithium cost curve. Despite a higher cash production cost than its Chilean peers, Argentina-based producers benefit from lower total royalties and taxes. The lower total royalties have diminished much of the gap between Argentina and Chile lithium costs. 

While we see the potential for the Cauchari-Olaroz project to become a low-cost resource, we currently assign it a no moat rating as the project is not yet in production. Development studies indicate the project could warrant a moat based on the cost advantage moat source. However, these estimates could prove significantly different from actual production costs. Should the project ramp up production with a bottom quartile unit cost, we would revisit our moat rating. 

Pastos Grandes is currently in development, and we forecast the project will begin operations in the late-2020s. The Pastos Grandes is located near Cauchari-Olaroz in Argentina and should have similar economics. We currently assign the project a no-moat rating, as the project is not in production, but plan to revisit once the company ramps up production.

Lithium Americas’ Thacker Pass project in the U.S. state of Nevada, which we project will begin operations in the mid-2020s. Thacker Pass aims to produce lithium from a clay resource. Currently, all global lithium is produced from brine or spodumene resources and a clay-based resource project has never entered production. Based on the company’s plan, the clay production process will be similar to spodumene mining, where clay will be dug out of the ground in an open-pit mine and processed into lithium carbonate. 

The lithium carbonate cost curve has traditionally been set by non-integrated producers who purchase and convert spodumene. Development studies indicate the potential for clay resources to be on the lower half of the cost curve. However, with no comparable resources, clay-based projects carry additional uncertainty as actual production costs could sit much higher on the cost curve. As a result, we see the threat of material value destruction should the project not be able to efficiently process clay into lithium chemicals, which precludes Lithium Americas from a narrow or wide moat rating. 

Further, we see additional uncertainties around project timing, as Lithium Americas faces legal challenges to its permits from opposing activists. While we think Thacker Pass will ultimately be granted all required permits to begin construction, challenges could delay the project indefinitely. We view the potential of an indefinite delay as another threat of material value destruction that would prevent us from awarding Lithium Americas with a narrow or wide moat rating. As a result, we currently assign the Thacker Pass project with a no-moat rating. However, similar to views for the Cauchari-Olaroz and Pastos Grandes projects, we would revisit our moat rating should the project ramp up production with a low unit production cost.

None

Economic Moat

Lithium Americas

Lithium Americas Corp. is a resource company, which engages in lithium development projects. Its projects include: Thacker Pass and Caucharí-Olaroz. The company was founded by Raymond Edward Flood, Jr. on November 27, 2007 and is headquartered in Vancouver, Canada.

Earnings data Q2 2023

Cost of revenue

Gross profit

Operating expenses

SG&A

Other

Operating income

EBITDA

Net income

Earnings per share

Total assets

Current assets

Cash & equivalents

Receivables

Inventory

Non-current assets

Net PPE

Intangibles

Total liabilities

Current liabilities

Short term debt

Income tax payable

Non-current liabilities

Long-term debt

Total equity

Stockholders equity

Minority interest

Total liabilities & equity

Total debt

Net debt

Book value per share

Cash from operations

Funds from operations

Change in working capital

Cash from investing

Capital expenditure

Purchase/sale of investments

Purchase/sale of business

Other sources

Cash from financing

Change in stock

Change in debt

Cash dividends paid

Cash from other sources

Net change in cash

Free cash flow

Sigma Lithium Corp

Sociedad Quimica Y Minera De Chile

Albemarle

American Lithium Corp

ioneer Ltd

While electric vehicles may one day dominate global roadways, figuring out which EV brand will win out presents big challenges, thereby organically bolstering the case for the best lithium stocks to buy. Rather than wagering on a team to win the big matchup, acquiring lithium miners is akin to selling tickets to the game.

The 7 Best Lithium Stocks to Buy for May 2023

Amplify Lithium & Battery Technology ETF

BHP Billiton

Proshares S&P Global Core Battery Metals ETF

Global X Lithium & Battery Tech ETF

Sprott Lithium Miners ETF

Livent Corp

Piedmont Lithium

Tesla

Wesfarmers Ltd

Lithium chemical spot prices were lower and spodumene spot prices were lower the past month. Lithium carbonate spot prices in China may be bottoming as low margins hit producers. Lithium market news - DOE expects U.S. battery production in 2030 will be 20x what it was in 2021. UK taskforce on critical minerals. Chile's President wants to nationalize lithium.

Lithium Miners News For The Month Of April 2023

QuantumScape

FREYR Battery SA

Investors interested in battery stocks can look at this sector from multiple angles. Some companies manufacture batteries that power the current generation of EVs, future technology innovators, OEMs, commodity producers, traders, etc.

3 Battery Stocks With Huge Return Potential for Long-Term Investors

ALPS Clean Energy ETF

Brookfield Renewable Partners

NextEra Energy

Enbridge

First Solar

iShares Global Clean Energy ETF

By now, we're all well aware of the world's desire to go green, which could greatly benefit green energy stocks. The U.S. wants to cut emissions by up to 52%.

7 Green Energy Stocks with Huge Growth Potential

VANCOUVER, British Columbia, April 26, 2023 (GLOBE NEWSWIRE) -- Lithium Americas Corp. (TSX: LAC) (NYSE: LAC) (“Lithium Americas” or the “Company”) today announced the retirement of Eduard Epshtein and the appointment of Pablo Mercado as Executive Vice President and Chief Financial Officer (“CFO”) to succeed Eduard as CFO of Lithium Americas.

Lithium Americas Announces New Chief Financial Officer

Tesla shares continued losing ground on Monday. However, lithium mining stocks posted solid gains.

Elon Musk Is Sending These Stocks Higher (and Tesla Isn't One of Them)

The lithium industry is bracing for a crushing blow. Chile is one of the world's largest producers of lithium, second only to Australia.

Why Are Lithium Stocks LTHM, SQM, ALB, LAC Down Today?

Li-Cycle Holdings Corp

The lithium market saw a bumpy start to the year, with prices plummeting and stocks taking a hit. However, amidst the chaos, savvy investors are looking for the best lithium stocks to buy at a substantial bargain.

The 7 Best Lithium Stocks to Play the Battery Boom

VANCOUVER, British Columbia, April 20, 2023 (GLOBE NEWSWIRE) -- Lithium Americas Corp. (TSX: LAC) (NYSE: LAC) ("Lithium Americas" or the "Company") and Arena Minerals Inc. (TSX-V:AN) (“Arena”) are pleased to announce the completion of the previously announced plan of arrangement (the “Arrangement”) whereby Lithium Americas has acquired all of the issued and outstanding common shares of Arena. Arena owns 65% of the Sal de la Puna project covering approximately 13,200 hectares of the Pastos Grandes basin located in Salta, Argentina.

Lithium Americas Completes Acquisition of Arena Minerals

Lithium stocks to check out in the stock market today.

3 Lithium Stocks To Watch In April 2023

Citigroup

Amdocs

Block

Delta Air Lines

Hudbay Minerals

Pfizer

Undervalued stocks offer the chance to pick up shares of companies that are trading at too low a price based on some measure of intrinsic value. The appeal in identifying such equities is obvious: Find good companies at low prices before others do and watch your investment increase in value as demand rises.

The Most Overlooked 7 Stocks in the Market Today

KraneShares Electric Vehicles & Future Mobility Index ETF

Solid Power

By now, we're all familiar with the electric vehicle story and that there's always come controversy around the best EV stocks to buy. We know we're looking at a potential multi-billion-dollar story, as EV sales accelerate all around the world.

3 EV Stocks That Could Double Your Money by 2024

Lithium Americas has a long way to go until Thacker Pass production. The assets are valuable but not enough to warrant the current market price.

Lithium Americas: Don't Get In Yet, Wait For The Separation

Ginkgo Bioworks Holdings

Polestar Automotive Holding UK PLC

Last year was a rough one for growth stocks, as investors shied away from risk in the face of rising interest rates. But in 2023, investors are once again on the hunt for companies with above-average growth rates.

3 Growth Stocks to Buy for 100% Returns

Rio Tinto plc Sponsored

Standard Lithium Ltd

Lithium has been among the hottest commodities as we transition to a post-pandemic world. The price for a metric ton of lithium (2205lb.

The 3 Most Undervalued Lithium Stocks to Buy Now

Alamos Gold

EMX Royalty

Franco-Nevada C

VanEck Vectors Gold Miners ETF

VanEck Junior Gold Miners ETF

SPDR Gold Trust

Barrick Gold

Gold Royalty Corp

Osisko Gold Royalties

Royal Gold

Sandstorm Gold

iShares Silver Trust

Vox Royalty Corp

The Precious Metals R&S Index grew by 14.5% in March. The Precious Metals R&S Equally Weighted Index grew by 8.53%.

Precious Metals Royalty And Streaming Companies: The March Report

ChargePoint Holdings

iShares Self-Driving EV and Tech ETF

Electric vehicle (EV) stocks surged off their pandemic lows, delivering exceptional gains for investors. But after the sector topped out in late 2021, many stocks crashed as the industry faced supply chain disruptions and investors fled speculative growth stocks in favor of value and safety.

3 EV Stocks to Buy for 100% Returns

With global markets heating up again, savvy investors are turning towards EV stocks to buy. All after most of the top EV stocks underwent a deep correction last year.

7 Thrilling EV Stocks for Aggressive Investors to Buy

While investors love their electric vehicle brands, a better option for the future of transportation may be to consider the best lithium stocks to buy. No, they're not nearly as exciting as betting on the next possible Tesla (NASDAQ: TSLA ).

The 7 Best Lithium Stocks to Buy for April 2023

Riot Blockchain

As I write, gold has surged above $2,000 an ounce. Among the various reasons for the rally, the precious metal is discounting potential expansionary policies in the second half of 2023.

3 Growth Stocks to Buy for 3X Returns

Electric vehicle (EV) industry investors, listen up! You can wager your hard-earned capital on risky EV manufacturing startups, but there's an alternative.

Profit From the Lithium Boom With LAC Stock

VANCOUVER, British Columbia, April 03, 2023 (GLOBE NEWSWIRE) -- Lithium Americas Corp. (TSX: LAC) (NYSE: LAC) ("Lithium Americas" or the "Company") announces that it has filed its 2022 Annual Report on Form 40-F with the U.S. Securities and Exchange Commission (“SEC”) comprising of its 2022 annual audited financial statements, management discussion and analysis and the annual information form (“AIF”). The filings are available on EDGAR via the SEC website www.sec.gov.

Lithium Americas Form 40-F Filed on EDGAR and AIF Filed on SEDAR

Lithium Americas Corp. is set to start production at a mine in Argentina. The lithium miner is now moving full speed ahead at the Thacker Pass mine in Nevada.

Lithium Americas: Let Production Begin

Chevron

Shell PLC

Before U.S. markets opened on Friday, the U.S. Bureau of Economic Analysis (BEA) released its personal income and expenditures (PCE) report for February.

PCE Inflation; Gulf of Mexico Oil Lease Sales; Lithium Americas Earnings

VANCOUVER, British Columbia, March 31, 2023 (GLOBE NEWSWIRE) -- Lithium Americas Corp. (TSX: LAC) (NYSE: LAC) (“Lithium Americas” or the “Company”) has reported financial and operating results for the fourth quarter and year ended December 31, 2022.

Lithium Americas Reports 2022 Full Year and Fourth Quarter Results

News for Lithium Americas Stock (LAC)