Report

The Most Undervalued Lithium Stock on Our Radar – Resuming Coverage

Lake Resources NL is resuming coverage, with its flagship Kachi lithium brine project in Catamarca province, Argentina, being a key focus. The Kachi project holds a large lithium brine resource of 10.6 Mt LCE at 218 mg/L, with a 2023 Definitive Feasibility Study (DFS) projecting an After Tax-NPV8% of US$1.7B at a lithium carbonate price of US$28k/t. Even at a lower five-year average price of US$21k/t, the project is estimated to have an AT-NPV8% of US$0.8-US$1.0B.

Lake Resources stands out as the most undervalued lithium stock, trading at just $3/t LCE compared to the sector average of $36/t. The company plans to focus on advancing the Kachi project by divesting its non-core assets. With lithium prices currently down 66% YoY, the company's strategic position makes it an attractive M&A target, especially given the recent M&A activities in the sector.

Upcoming catalysts include potential mergers, joint ventures, financing, and positive market sentiment toward juniors in the EV metals sector.
Underlying
Lake Resources NL

Lake Resources is engaged in mineral exploration in Pakistan.

Provider
Fundamental Research
Fundamental Research

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Analysts
Sid Rajeev

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