Lake Resources NL (ASX:LKE) (OTC:LLKKF) is incredibly undervalued as per a new research report by Orior Capitals Simon Francis, a former top-rated metals and mining analyst in Asia with Macquarie, Credit Suisse and HSBC.
This research highlights the potential value of Lakes Kachi Lithium Brine Project in Argentina following the recently released pre-feasibility study (PFS) concerning its sustainable and scalable direct extraction process.
The Hong Kong-based analyst highlighted Kachis significant and sustainable competitive advantages including its ability to produce a 99.9% lithium carbonate battery-grade product with low impurities, based on a sustainable process, as sought by electric vehicle (EV) makers.
Francis' research references the production of the samples from the pilot plant modules as being a critical value catalyst for Lake.
The report also highlights the growing global demand for lithium as EV penetration increases, yet challenges to supply are expected to result in growing supply deficits by the mid-2020s, particularly for battery-grade products.
Valuation of 29 cents per share[hhmc]
Noting that Lake looks incredibly undervalued Francis said: "Despite robust financial metrics, the advantages of direct extraction and the excellent long-term outlook for lithium, Lake Resources is trading at less than 2% of NPV.
“Canadian company Standard Lithium, which is also developing a direct extraction project is trading at ~20% of attributable NPV.
“In February 2020, Orocobre paid an estimated 16% of NPV to acquire Advantage Lithium.
“Valuing Kachi at 15% of NPV and Lakes other projects at say, A$25m, suggests a valuation of A$0.29 per share. This is ~9x the current share price."
Shares today have been as much as 14% higher to 4 cents and are up from 2.5 cents at close on March 24.
Pilot plant progress[hhmc]
Following Lakes recent release of the Kachi PFS, the company has intensified discussions with downstream participants and financers.
Lake is also processing lithium brine samples from Kachi at its technology partner, Lilac Solutions direct extraction pilot plant module in Oakland, California.
Lilac hRead More – Source
[contf]
[contfnew]
Proactiveinvestors
[contfnewc]
[contfnewc]
