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Thursday, October 22, 2020

New Financing Deal Lifts LITHIUM AMERICAS C COM NPV (OTCMKTS:LACDF)

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LITHIUM AMERICAS C COM NPV (OTCMKTS:LACDF) is a penny stock in the lithium space that started this week with a breakout, taking shares just above the stock’s two-month closing highs range. The principal catalyst driving recent action was LACDF’s announcement that it has closed the investment agreement with BCP Innovation Pte Ltd., a wholly-owned subsidiary of Bangchak Corporation Public Company Ltd.

According to the release, pursuant to the Investment Agreement, Bangchak has agreed to provide Lithium Americas with an aggregate of US$113 million in financing primarily to fund a portion of the Company’s share of construction costs for the Cauchari-Olaroz lithium project in Jujuy Province, Argentina. That solves a key piece of the puzzle. Resource project value is largely dependent on capital availability. Hence, the market clearly liked to see this deal close.

LITHIUM AMERICAS C COM NPV (OTCMKTS:LACDF) frames itself as a company that is developing the Cauchari-Olaroz lithium project, located in Jujuy province, Argentina, and the Lithium Nevada project (formerly Kings Valley project) in Nevada, U.S.A, with the intent to become a major supplier of lithium products. In addition, Lithium Americas is a supplier of specialty drilling additives, Hectatone and other organoclay products for the oil and gas and other industries.

LACDF is a resource player that engages in the acquisition, exploration, and development of mineral properties in Nevada. The company explores for lithium deposits. As noted above, the company primarily holds interests in the Cauchari-Olaroz Project located in Jujuy province of Argentina; and the Lithium Nevada Project covering approximately 15,233 hectares of area located in northwestern Nevada.

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According to company materials, “Lithium Americas, together with SQM, is developing Cauchari-Olaroz, located in Jujuy, Argentina, through its 50% interest in Minera Exar. In addition, Lithium Americas owns 100% of the Lithium Nevada project (formerly Kings Valley project), and RheoMinerals Inc., a supplier of rheology modifiers for oil-based drilling fluids, coatings, and specialty chemicals.”

As noted above, LACDF shot higher on Monday in part in response to the closing of a financing deal with Bangchak Corp.

According to the release, Bangchak is a global emerging leader in the green energy industry. The company’s core business – petroleum refining – spans procurement of crude oil from domestic and overseas sources and refining it into various standard products. The company’s strategy is to grow its green energy business, including solar power and biofuel production and distribution, and create value for investors in a manner that enhances national energy security and promotes social and environmental stewardship.

Tom Hodgson, Lithium Americas’ CEO, commented: “We are very pleased to complete this important financing with Bangchak and to welcome Bangchak’s CEO, Chaiwat Kovavisarach, onto the Lithium Americas’ Board of Directors. Together with the recent Ganfeng investment, Lithium Americas has raised US$285 million in debt and equity and is in a strong financial position to fund our remaining share of Cauchari-Olaroz’ capital costs alongside our joint venture partner, SQM. With development now well underway, we remain on track to reach production by 2019 with the objective of becoming the next low-cost lithium producer from brine.”

Recent action has seen 12% during the past month in terms of shareholder gains in the name. The situation may be worth watching. LACDF has a history of dramatic rallies. Furthermore, the name has benefitted from a jump in recent trading volume to the tune of 22% above the average volume levels in play in this stock over the longer term.

At this time, carrying a capital value in the market of $352.64M, LACDF has a significant war chest ($12M) of cash on the books, which is balanced by about $228K in total current liabilities. LACDF is pulling in trailing 12-month revenues of $2.5M. In addition, the company is seeing recent top line growth, with sequential quarterly revenues growing at 116.8%. We will update the story again soon as further details emerge. For continuing coverage on shares of $LACDF stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

Disclosure: we hold no position in $LACDF, either long or short, and we have not been compensated for this article.

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