Lithium Americas Surges on Reports It Has Lithium-Rich Deposit
Comment of the Day

September 11 2023

Commentary by Eoin Treacy

Lithium Americas Surges on Reports It Has Lithium-Rich Deposit

This note may be of interest. Here is a section: 

Lithium Americas shares rise more than 6%, one of the leading gains on the S&P/TSX Composite index, after research and media reports suggest that the company’s Thacker Pass project is located on a US lithium deposit that could be among the largest in the world.

Lithium reserves in the McDermitt Caldera, located along the Nevada-Oregon border, could contain between 20 and 40 million metric tons of the metal, according to findings from Lithium Americas volcanologists and geologists in an Aug. 31 research report.

Eoin Treacy's view

Lithium Americas has been in discussions with the US government about sourcing federal funding to build its Thacker Pass mine. In service to the goal they are in the process of splitting up. The North American company will contain the Thacker Pass mine, while the existing production in Argentina will be renamed Lithium International. The US government is insisting on no foreign interest in the resource base before they are willing to supply funds.

The updated resource base estimate represents a massive upgrade. A large scale mine in the region, if it is permitted, would ensure self-sufficiency for the US auto industry. GM took a minority interest in the company earlier this year in its efforts to abide by the domestic sourced materials clauses of the Inflation Reduction Act.

Lithium Americas continues to rebound from its recent lows. It is now approaching the region of the 200-day MA and a sustained move above it will be required to break the medium-term sequence of lower rally highs.  
Lithium Carbonate prices are attempting to bottom above CNY150,000. How well that level holds will be very dependent on Chinese auto demand.
BYD is rebounding following its most recent setback. That suggests at least near-term support has been found and potential for higher to lateral ranging remains intact. 

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