RE: Will the EV Transform Lithium Markets? Thanks Polo I like this part especially! Muff
TER: What is your top pick among the companies you follow?
MK: On a relative-value basis, we like Lithium Americas. Its lithium-brine reserves are indicated to support a 40-year mine life at 20,000 tons per annum (20,000 tpa) of low-cost lithium carbonate equivalent (LCE) production. The company's Cauchari project is adjacent to Orocobre's Olaroz project, which is fully financed and has construction underway. Orocobre trades at ~$23 of enterprise value per tonne of resource compared to Lithium Americas' ~$5 per tonne of resource by our estimates. Lithium Americas is currently in financing and JV discussions with a number of parties, including Mitsubishi Corp. (MSBSHY:OTCPK). We believe the company has sufficient funding left on its credit facility to see it through to a financing decision, which we expect later this year. We expect a financing update shortly on progress to date. In our view, once financing is in place, the stock would likely be re-rated substantially higher.
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