NLC in the Lithium ArticleWe do need patience waitting for each NR regarding the company's developent progress. Lithium stocks seem in a consolidation phase, and depending on individual's progress.
Hope NLC will have some solid news, I expect it will be either pilot plant production purity or resource update.
Here is an article of lithium companies. You disagree with the author about NLC's year end target of $3.75. My epection is $5.00.
Here is the article.
https://seekingalpha.com/article/4417597-lithium-juniors-overlooked-ev-treasure-trove
Neo Lithium
Beginning this article with a discussion of lithium hydroxide likely created an expectation for a hydroxide-heavy list of lithium juniors, but Neo Lithium (OTCQX:NTTHF) swings differently. The company plans to produce 20,000 tons of lithium carbonate per year over the course of 35 years. Neo Lithium's PFS offers a fairly comprehensive look into the company's initial findings and provides the plans for initial operations. The next step is completing the DFS to solidify these results.
Located in Argentina, the 3Q project is one of the largest, and most pure, lithium brine resources in the world. The great size allows for the company to maximize revenues, while the higher purities allow for the maximization of profit margins -- in other words, the minimization of operating costs. Neo Lithium projects that the 3Q project will operate at a cost of $2,914 per ton of lithium, a staggeringly low figure. This also allows for a relatively low CAPEX, $319 million, and a payback period of under two years.
EBITDA is at the mercy of the ever-changing lithium market but is expected to average at $167 million per year. But this is all getting ahead of itself. Neo Lithium expects to release its DFS in August, or September, of this year (9:33). However, the company won't be alone in the development of the DFS. Recently, CATL, the world's largest battery producer, took an 8% stake in the company and will be assisting them in their DFS. CATL is now working closely with Neo Lithium to develop their lithium carbonate manufacturing process to ensure it will be top-grade for battery suppliers.
Before the company releases their DFS, it expects to announce a deal with CATL (20:56), which will likely include an off-take arrangement between the two companies. If the deal does in fact emerge before the release of the DFS, it will be a strong indication of positive results to come as the Chinese battery giant will know the results long before they are made public. With initial project construction targeted for the end of this year (9:42), the company is on target to reach their initial production goal of 2023. However, I would expect this to come at the end of the year and would not be surprised if this was then pushed into early 2024.
When it comes to the company's choice to target carbonate, I believe it is wise. While hydroxide and lithium metal production will be developed later on as the market continues to shift (17:10), carbonate may be more favorable in the short term. Carbonate is already entering a supply deficit and, with the vast majority of new production targeting hydroxide, this deficit is likely to grow.
With catalysts on the way, in the form of a deal with CATL, a positive DFS, and the start of construction all by the end of this year, it is a year of growth for the company. As such, I expect a price of $3.75 by the end of the year, though most of 2022 and 2023 will show growth stagnation. However, the company trading at a value near a quarter of their single asset's NPV, their mine, the ceiling is rather high for the company.