LAC Stock Price Moves on Argentina Partnership Announcement

Investors Alley
LAC Stock Price Moves on Argentina Partnership Announcement

Since bottoming out at $1.92 in March 2020, shares of Lithium Americas (LAC) rocketed to a recent high of $7.75. All on news of a potential lithium supply shortage.

According to Reuters,
“A new demand surge is already looming in the form of the multiple ‘green
stimulus’ packages as governments try and kick-start locked-down
economies. You don’t have to be a market genius to see that another price
boom is coming sooner or later as an under-powered supply chain has to catch up
with the next demand surge.”

Electric
vehicles are helping, as demand grows much faster than anyone expected.

In fact,
according to a new study from the Boston Consulting Group, by 2025, EVs could
account for a third of all auto sales. By 2030, EVs could surpass internal
combustion engine vehicles with a market share of 51%.

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But for that
to happen, the world needs far more lithium, which is where LAC comes into
play.

In addition,
Lithium Americas just completed its transaction with Chinese partner, Ganfeng
Lithium regarding ownership structure of the Cauchari-Olaroz lithium project under development in
Argentina. Reportedly, this project is one of the few large-scale lithium
operations that are currently in development, and is expected to begin
production in 2021.

“With an additional $40 million in
cash on our balance sheet and over $200 million in available capital to fund
our share of Cauchari-Olaroz, Lithium Americas remains in a strong financial
position as we advance both of our projects,” says President and CEO Jon Evans.

Earnings are Fueling Upside

Earlier this
month, Lithium Americas posted a second quarter loss of seven cents a share. However,
that fell within the range analysts were looking for.

The better
news is that Lithium Americas is moving forward with two projects that could
generate solid revenue, and hopefully a profit. Those include the Cauchari-Olaroz
project in Argentina, and the Thacker Pass project in Reno, Nevada.

“With respect to the Thacker Pass
lithium project in Nevada, we continue to make significant progress with the
recent release of the draft Environmental Impact Statement by the Bureau of
Land Management,” added Evans.

Ian Cooper’s Personal Position in LAC:
None

LAC Stock Price Moves on Argentina Partnership Announcement
Ian Cooper