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Folks, please keep conversations about LAC. I understand that there is lot of interest into the tax situation at this time of year, which is fine as long as it pertains to LAC trading. But then when it gets to political and/or countries administrations policies, and personal views of such, etc, then it becomes completely conflictive and off topic. I've been in business for myself and owned small business with employees and contractors most of my life and understand the meaning of all that entails. But that is not an issue for this board. Thanks all for understanding.
Wishing everyone peace and good will for all of the holiday season. Go LAC
Thank you very much for the information! Sounds like a great loophole, wish we had it here in the states where it is a lot more complicated to avoid taxes. $LAC long
B. Riley Lifts Lithium Americas' PT to $44 from $25 on Higher Volumes, Pending Acquisition, Higher Long-Term Price Assumptions; Keeps Buy Rating
2021-11-24 09:29:55 AM ET (MT Newswires)
09:29 AM EST, 11/24/2021 (MT Newswires) -- (MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe.
Then you need to find a way to get around that situation. There are a lot of people, especially the younger generations getting wealthy by going out of the norm. I can now understand and relate to your previous posts before this discussion. I always say, if I don't like the system, then I need to change, as the system is bigger than I am.
Anyway, I apologize again for all of the off-topic posts. It is time to put in some LAC bracket orders. Have an awesome day everyone, make some capital gains. Happy Thanksgiving to everyone south of the border!
I have none of that! I am a small business owner. We get no special retirement programs, no pensions, no 401Ks, No Fed help, No State help, yet we are the backbone of America out there 24/7 keeping it going....
Yup, only if you reside in the US. No worries here. If you live in the US, trade within your 401K and take out the capital gains after retiring, thus you will be in the lowest tax bracket.
All capital gains generated in my TFSA (WealthSimple Trade commission free) account are tax free. Some have amassed over a million from a 15,000 initial investment. The CRA is following them at the moment because technically, their capital gains are legally tax free. It's another loop-hole in which one can gain wealth.
As for my TD trading account, I get taxed 50% of the capital gains in my tax bracket. Thus, I focus more on my TFSA account on CDN stocks (where I trade LAC) and use my regular trading account for US stocks (swing trades). All investments/dividends holdings are in my TD TFSA account.
I apologize for the off-topic but that is how I trade LAC, on the TSX side.
I get being able to put money in and take money out of an account without tax. What about your income/capital gains that you receive/acquire as a result of investing those funds? They don't tax you on your gains/income? That's great! $LAC long
TFSA account; Tax Free Savings Account. In Canada we are allowed 6000.00 a year and since inception, each person is now have approx 75,500.00 in TFSA. It’s outside of our RRSP (similar to 401K) but funds can be taken out (anytime) and put back in (following year) without penalty or taxed.
I use a commission free TFSA trading account and bracket trade LAC and other bunch of volatile stocks. I enter the closing price of each stock on a spreadsheet and it spits out the next day buy and sell prices. I enter my trades before market opens and see which gets hit at 4pm. The best part is when both sides of the bracket orders are filled on the same day. LAC is great with this process. My cash portion increases (with ACB per share adjusted, as I always keep some shares on hand) while the share number stays the same, and capital gained is tax free.
How are you avoiding capital gains taxes?
This "volatility" worse than a futures contract. NO Investing going on here at all.
Just watch that BIG gap at $25.00 levels folks. Laugh if you want, but you are seeing $4.00-$6.00 movements in PPS in any given day, very dangerous, highly manipulated, sensibility has to return to many of these types IMHO..
Watch PUT options chain as well...
Yep, nothing wrong with that.
High volatility is great for trading while still keeping a core size for long term. I am using the trading profits to fund my core holding. The 3-6% swings each day are awesome!
That is true too. I mentioned recently here that there will be a long period for Cauchari to achieve nameplate capacity. This is typical of brine projects. High volatility will be part of the game at least until then.
Producing lithium and revenues take longer than we all think.
Piper Sandler Adjusts Lithium Americas' Price Target to $32 USD From $22 USD, Maintains Neutral Rating
2021-11-22 10:35:49 AM ET (MT Newswires)
10:35 AM EST, 11/22/2021 (MT Newswires) -- (MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe.
LAC does not produce yet, so your point is irrelevant. It will become more relevant when LAC starts producing. As of now, LAC’s value is based on the value of its developing projects, their future potential to generate revenue and profit, and the current positive sentiments towards lithium. This happens to all mining projects during exploration and development prior to production.
GLTAH
Earnings missed by 40%, yet price goes higher? ONLY in America I guess...??
Nice, way to play it. LAC volatility has given opportunity for several different styles of trading. Day, swing, or long and everything in-between.
I am with you on the volatility. Each day I enter a set of bracket orders. I win either way; sometimes both orders are filled on the same day. Thus, all squares out on my shares holding but extra cash profit in the account.
You bet, love the volatility. Here's another article to sway the public sentiment. LAC is listed #2 in the list of stocks to play.
https://oilprice.com/Energy/Energy-General/Is-Lithium-The-Best-Bet-On-A-Overheated-EV-Market.html
Is Lithium The Best Bet On A Overheated EV Market?
By Alex Kimani - Nov 18, 2021, 6:00 PM CST
Wall Street is raising serious concerns about sky-high valuations of EV-makers
Lithium markets have grown significantly tighter in 2021
EV-makers continue to use more lithium per battery
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The EV revolution is well and truly underway, and the sector continues setting new records. A recent report by the Korea Automotive Technology Institute (KAII) shows that global EV sales exceeded 3 million units in the first three quarters of 2021, a run rate that puts it on course to break 4 million units a year for the first time ever. BloombergNEF is even more sanguine and expects global sales of electric passenger vehicles this year to clock in at 5.6 million units, good for an impressive 8% of new vehicle sales.
China remains, by far, the biggest buyer of electric vehicles, with 1.76 million units sold in the country during the period. The United States comes in a distant second with 272,554 units followed by Germany 243,892 units; UK 131,832 units; France 114,836 units; and Norway 84,428 units. EV sales accounted for 9.4% of new vehicle sales in China but just 2.3% in the USA.
On a company basis, Tesla Inc. (NASDAQ:TSLA) remains the most popular model after moving 625,624 units; China's SAIC Motor sold 413,037 units; Volkswagen 287,852 units; and China's BYD Corp. (NYSE:BYD) with 189,751 units. Back in October, Tesla reported that it delivered 241,300 electric vehicles during the third quarter of 2021, more than 70% higher than last year's deliveries for the same period and significantly better than the 220,900 deliveries predicted by Wall Street.
Sales figures for the fourth quarter are already looking great, with Xpeng Inc. (NYSE:XPEV) and BYD Co (NYSE:BYD) reporting that October sales tripled vs. a year earlier while Li Auto (NASDAQ:LI) has reported that sales have doubled.
While these are very impressive numbers by any yardstick, investing in EV stocks is anything but simple or straightforward.
To wit, those rosy growth numbers have not stopped a cross-section of Wall Street from raising serious concerns about the stratospheric valuations in the space.
According to Bernstein analysts, the 15 largest ICE manufacturers command a collective market cap of $1.2T compared to the $1.1T collective valuation of pure-play EV vendors, despite the fact that the former sell 99% of all new vehicles globally while the latter manage a minuscule 1%.
And that could prove problematic for EV stocks.
Steep valuations
Bernstein's Tony Sacconaghi makes a pretty succinct point about how the market values EVs versus traditional ICE makers:
"The thinking–of course–is that pure play EV vendors will ultimately come to dominate the automotive world. In 2014, they accounted for 15% of all BEVs sold. Today they account for 28%. However, even if they ultimately were to account for 50% of all EVs sold by 2030 – which may be aggressive – it remains difficult to justify their current valuations."
Bernstein is worried that the market is assuming that traditional OEMs will not be able to deliver competitive EV offerings in the future, or they will be very delayed in doing so. Further, the market appears to think that EV upstarts will be able to generate significantly more profit per car, mainly by taking advantage of better distribution and autonomy/add-on services. The analyst points out that this assumption is not entirely without merit since full autonomous driving priced at $10K per car would radically change the margin (and valuation) profile of the industry.
But Sacconaghi begs to differ with the assumption that pure EVs like Tesla will always maintain a huge operational advantage over their late-to-the-party ICE rivals:
"That said, our contention is that the automotive industry is an increasingly global and hypercompetitive industry and we believe that surplus profits and technology innovation will likely be competed away over time, as has been the case historically."
Further, EV companies remain vulnerable to short-term headwinds including valuation concerns and supply chain bottlenecks , with newer pure-play EV upstarts such as Fisker (NYSE:FSR), Faraday Future Intelligent (NASDAQ:FFIE), Lordstown Motors (NASDAQ:RIDE), Nikola (NASDAQ:NKLA), Lucid Motors (NASDAQ:LCID), Nio (NYSE:NIO), XPeng (NYSE:XPEV), Li Auto (NASDAQ:LI), Canoo (NASDAQ:GOEV) and Rivian (RIVN) more vulnerable.
Indeed, whereas TSLA boasts an impressive 54.3% YTD return, many EV startups are struggling: FFIE (-15.6%), RIDE (-74.5%), NKLA (-12.3%), XPEV (+12.8), Li (+11.6), GOEV (-21.7%), and WKHS (-65.7%). Fisker and Lucid Motors are outliers in this category with YTD returns of 46.1% and 425%, respectively.
Lithium boom
Investing in the lithium sector appears like a safer way to play the EV boom.
With the energy transition in full swing, Wall Street experts have predicted that metals that power the clean energy sector such as lithium, copper, nickel, and cobalt are poised to become the oil of the future.
According to a recent Eurasia Review analysis, prices for the four metals could reach historical peaks for an unprecedented, sustained period in a net-zero emissions scenario, with the total value of production rising more than four-fold for the period 2021-2040, and even rivaling the total value of crude oil production.
In a net-zero emissions scenario, the metals' demand boom could lead to a more than fourfold increase in the value of metals production–totaling $13 trillion accumulated over the next two decades for the four metals alone. This could rival the estimated value of oil production in a net-zero emissions scenario over that same period, making the four metals macro-relevant for inflation, trade, and output, and providing significant windfalls to commodity producers.
Last year, Mining.com launched the EV Battery Metals Index, a tool that tracks the value of lithium, cobalt, nickel, and other battery metals flowing into the global EV industry at any given point in time. The index combines two main sets of data: prices paid for the mined minerals at the point of entry into the global battery supply chain and the sales-weighted volume of the raw materials in electric and hybrid passenger car batteries sold around the world.
According to an August Mining.com report, the EV Metal Index clocked in at $2.68 billion by the end of June, which in effect means that more EV battery metal business was done in H1 2021 than all of 2020, itself a record year.
Lithium continues to lead the way, with average lithium on a per-vehicle basis, including hybrids was up 30% year over year in June, jumping from 14kg to just over 18kg. According to Benchmark Mineral Intelligence, lithium prices have doubled year-to-date and now tops $16,500 a tonne (hydroxide ex-works China mid-August).
Jiangxi Ganfeng Lithium, the world's largest lithium mining company with a market capitalization of $19 billion, has predicted that lithium prices will continue to rally as lithium production struggles to keep up with massive demand for EVs. The Chinese company has some decent street cred--after all, it counts leading EV automakers such as Tesla Inc. and BMW (OTCPK:BMWYY) among its customers.
Source:Mining.com
Investors who entered the lithium space a few years ago jumped the gun then, partly out of poorly timed over-enthusiasm, and partly because the logic ran like this: Any new lithium mines that could contribute to the EV battery onslaught would take years to bring online, from scratch--so best to get started in advance.
Now, with the EV boom squarely in the front view mirror and with battery gigafactories promising to be heavy-hitting purchasers, we can finally see the much-anticipated supply crunch forming.
Battery-grade lithium carbonate prices started to buck a three-year downturn during the second half of 2020 thanks to robust EV demand roaring back from the coronavirus. Lithium carbonate prices have gained 91% so far in 2021.
That's mainly thanks to the postponement of lithium project expansions in South America--due to previous demand forecasts as well as the impact of the pandemic. This is expected to slow down the short-term supply of the lithium compound and improve pricing, according to Ganfeng.
Here are some top stocks to play the ongoing lithium and EV boom.
#1. Albemarle Corp.
Market Cap: $32.3B
YTD Returns: 85.3%
Albemarle Corporation (NYSE:ALB) is a Charlotte, North Carolina-based lithium producer that develops, manufactures, and markets engineered specialty chemicals worldwide.
The company's Lithium segment offers lithium compounds, including lithium carbonate, lithium hydroxide, lithium chloride, and lithium specialties for use in lithium batteries for consumer electronics and electric vehicles, high-performance greases, thermoplastic elastomers for car tires, rubber soles, plastic bottles, catalysts for chemical reactions, organic synthesis processes and other markets.
In its latest earnings report, ALB posted Q3 revenue of $830.6M (+11.2% Y/Y), beating the Wall Street consensus by $66.01M; Non-GAAP EPS of $1.05 beat by $0.28 while adjusted EBITDA clocked in at $217.6 million.
About a week ago, Degas Wright, founder and CEO of Decatur Capital, told CNBC that ALB shares Albemarle should benefit from the euphoria over electric vehicles.
#2. Lithium Americas Corp.
Market Cap: $4.0B
YTD Returns: 162.3%
Lithium Americas Corp. (NYSE:LAC)--formerly Western Lithium USA Corporation--is a Canadian lithium exploration company that operates as a resource company in the United States. LAC owns interests in the Cauchari-Olaroz Project located in Jujuy province of Argentina and Thacker Pass project located in northwestern Nevada.
In March, investment advisory B. Riley initiated coverage of LAC stock with a Buy rating and a price target of $25, noting that the company was nearing completion of a major lithium project and developing another long-term resource in the United States. LAC shares have been rallying after the company successfully expanded the mineral resource estimate at its Thacker Pass project in Nevada to 13.7M metric tons of lithium carbonate equivalent and raising planned Phase 1 capacity to target 40K mt/year of lithium carbonate.
Lithium Americas has also been expanding inorganically, and has agreed to buy Millennial Lithium for ~US$400M in cash and stock. The company says the addition of Millennial's Pastos Grandes lithium brine project in Argentina provides an attractive regional growth opportunity in proximity to its Caucharí-Olaroz project, with the potential to extract significant synergies.
#3. Livent Corp.
Market Cap: $4.8B
YTD Returns: 58.2%
Pennsylvania-based Livent Corporation (NYSE:LTHM) is one of the newest companies in the lithium space having been incorporated in 2018. Livent manufactures and sells performance lithium compounds primarily used in lithium-based batteries, specialty polymers, and chemical synthesis applications in North America, Latin America, Europe, the Middle East, Africa, and the Asia Pacific.
Last month, Citi upgraded LTHM to Buy from Neutral, saying the company should benefit from improved pricing and planned capacity expansions in 2022 and 2023.
Citi sees the lithium sector continuing to benefit from tight fundamentals thanks to robust demand from electric vehicles while supply is struggling to keep pace.
Meanwhile, analysts at Piper Sandler recently initiated Livent with an Overweight rating citing an upbeat outlook for the battery chemistry and materials sector.
By Alex Kimani for Oilprice.com
Yep, the doom and gloom may need to wait another week or two, but I think that next year will be good as we get closer to production. It’s just part of this volatile game…..
LONG LAC!
Nice post bud. Way to go. Fairly informative.
What it's "missing" though is the "potentially" disruptive GMG story.
Which understandably isn't what counts.....
What "counts" is the worlds' perception of things (formulated thru articles like that).
Hence currently volatility just appears to be the order of the day.
On the subject of Supply and Demand of lithium.
An article from the Forbes recently:
Lithium Shortage May Stall Electric Car Revolution And Embed China’s Lead: Report
Neil Winton Senior Contributor
Transportation
https://www.forbes.com/sites/neilwinton/2021/11/14/lithium-shortage-may-stall-electric-car-revolution-and-embed-chinas-lead-report/?sh=5c31cc8646ef
The electric car revolution will stall in the West if supplies of crucial battery elements like lithium fail to keep up with the forecast huge increase in demand. This will drive battery prices higher, decimate profit margins, and the coveted $100 per kWh battery, which would have signaled the arrival of affordable green vehicles, will remain on the launch pad.
“Western weaknesses in lithium-ion supply chains will slow electric vehicle adoption and demonstrate China’s dominance of the EV (electric vehicle) market,” according to a report from GlobalData. a leading data and analytics company.
This kind of pressure might also delay Tesla’s TSLA +4.1% long promised “affordable” $25,000 electric car.
The report said EV output is set to “skyrocket” to 12.76 million cars a year by 2026, with over half coming from China.
“With lithium prices set to rise throughout the next decade, the EV sector in the West will have to face rising battery costs. If they pass costs on to the consumer, EV adoption will likely accelerate at a slower rate than previously expected,” the report said.
The International Energy Agency (IEA) has estimated that the growth in EVs could see lithium demand increase by over 40 times by 2030, according to the International Lithium Association (ILiA) . Last year lithium demand was about 320,000 tonnes and is expected to hit 1 million by 2025 and 3 million by 2030, according to Reuters.
Earlier this month, LMC Automotive predicted European EV sales would rise from 1.2 million in 2021 to 3.4 million in 2024, 6.1 million in 2027 and 10.5 million in 2030.
U.S. investment newsletter Energy & Capital’s Luke Sweeney put it this way, as world leaders rush to implement green energy promises.
“They (the leaders) are ignoring the trillion-ton elephant in the room. Carbon-free power and gasoline-free transportation cannot exist without mining an absurd amount of lithium. Right now, production is not even close to keeping up. We simply aren’t pulling enough lithium out of the ground to match the projected demand,” Sweeney said.
Daniel Clarke, Thematic analyst at GlobalData, said China held 80.5% of global lithium-ion battery capacity in 2020, and even with the U.S. and EU’s best efforts will still dominate by 2026 with an expected 61.4% share.
“The rising price of lithium demonstrates what many in the industry have warned about for some time: the growing divergence between supply and demand for lithium. Ultimately, this will lead to an increase in the price of EVs, as automakers pass the cost on to the consumer,” Clarke said.
The average price of lithium carbonate has been erratic - halving before doubling again, and this has made investors wary of investing in new capacity.
“Batteries are already the most expensive part of an EV. Cell costs would need to be notably below $100 per kilowatt hour for mainstream production to take off, but this isn’t looking likely. Any increases in cost will be a blow to the decarbonization agenda of advanced economies, as well as lead to a deceleration in the decarbonization of the automotive industry,” Clarke said in the report.
In an online interview, I asked Clarke if the outlook for the price of lithium meant LMC Automotive’s European EV sales targets were still possible.
"It very much depends on automakers. Estimates see the rising cost of lithium hitting the EV market sometime between 2022 and 2024. (manufacturers) will have to decide on whether to absorb the cost or pass it onto the consumer. The market will become more competitive as a result. It is very possible that the (manufacturers) with the deepest pockets, such as Toyota, are able to take market share by absorbing the cost of the battery and undercutting their competitors, who would be forced to increase their prices. Tesla, whose EV market is focused on premium cars, would likely not be too badly affected, but it will make them potentially reconsider their plans for a low-cost $25,000 Tesla Model 2."
Clarke said lithium represents about 7% of the total cost of a battery but you also need Graphite, Manganese, Nickel, Cobalt. The latter two prices are also precarious because of supply issues.
“Cobalt is used in the cathode, and the cathode is the most expensive part of a battery, which is in turn the most expensive part of an EV. However, necessity is the mother of invention, and new battery chemistries are being developed all around the world."
Is the 100 kWh battery now in jeopardy?
"It is hard to say. Recent reports have the price per kWh at $105 but it is expected to rise next year as a result of the aforementioned forces at play. Lithium shortages will get worse next year and may continue into the middle of the decade. It is important to remember that building a lithium mine takes seven years and many automakers want high-quality batteries. Mines are huge investments, much like chip fabrication plants, there isn't a lot of room for just increasing capacity… most of these mines will be working around the clock anyway," Clarke said.
According to the ILiA, natural lithium minerals are relatively abundant and found in many countries. Currently there are large industrial operators in Australia, Chile, Argentina, Bolivia, China, Brazil, Zimbabwe and Portugal, that produce lithium raw materials at significant scale, although this number is set to rise as lithium production increases to meet demand. Experts say there are bottlenecks in the conversion processes needed to produce usable lithium. Plants take years to reach full production and this, combined with accelerating demand, means supplies will remain tight and prices high.
The big car and SUV makers are scrambling to set up deals to guarantee supplies. Tesla has a deal with Piedmont Lithium of North Carolina. General Motors GM -0.6% is investing in a Californian project. Companies like Stellantis, Renault and BMW are known to be investing in projects which seek to speed up, and clean up, the conversion process. It’s safe to assume that every single auto operative is doing the same thing.
Follow me on Twitter. Check out my website.
Neil Winton
As a former European Automotive correspondent for Reuters, I’ve a spent a few years writing about the industry. I will penetrate the corporate hype and bluster and find out... Read More
https://www.forbes.com/sites/neilwinton/2021/11/14/lithium-shortage-may-stall-electric-car-revolution-and-embed-chinas-lead-report/?sh=5c31cc8646ef
Lithium Americas Corp LAC QQQQ visit: http://global.morningstar.com/equitydisclosures.
The primary analyst covering this company does not own its stock.
At Cauchari-Olaroz, Lithium Americas owns 44.8% of the project, while Ganfeng, one of the world
1
The ESG Risk Rating Assessment is a representation of Sustainalytics’ ESG Risk
Economic Moat Moat Trend Uncertainty Capital Allocation ESG Risk Rating Assessment
Rating. 45.00 USD 0.79 18 Nov 2021 14:50, UTC
3.97 USD Bil
17 Nov 2021
None Stable Very High Standard
largest lithium producers, owns 46.7%. The remaining 8.5% stake;is ;ow;ned;b;y JEMSE, an
The trend is your friend. Who has stop losses set and where do you have them set at? $LAC long
Lithium Americas Shares Rise 6% on Millenium Lithium Deal, TD Raises Price Target to $45 CDN
2021-11-18 09:45:59 AM ET (MT Newswires)
09:45 AM EST, 11/18/2021 (MT Newswires) -- Shares of dual-listed Lithium Americas Corp. (LAC.TO, LAC) continued to rise on Thursday, climbing approximately 6% on the Toronto Stock Exchange following the company's agreement to buy Millenium Lithium Corp. (ML.V).
TD Securities analyst Craig Hutchison raised his price target on LAC to $45 from $36, and maintained a Hold rating.
His higher estimates also reflect the Vancouver-based lithium development company's Q3 results.
"Overall, we believe the acquisition of Millennial makes strategic sense for LAC as it takes advantage of its recent share-price strength (up ~160% YTD) to add a quality asset to its pipeline at minimal share dilution and no net erosion to its balance sheet," Hutchison said in a note to clients.
LAC shares rose $2.57, to 6.1%, to $44.14 in early trading on Thursday.
(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe.
I totally agree with you. Management is in the crawling phase and want to run when they can't even walk yet. Leaving 2021 and entering 2022 is like back in the dot.com bust and the commodities sector went into a super-cycle. According to Jim Rogers' book Hot Commodities, this happens every 20 years. This is happening now and hence most resource stocks are jumping. The EV industry is just pushing Li companies into overdrive, despite little to no production at the moment. As you said, Management is leveraging their stock pricing power to acquire and expand their portfolio. It makes logical business sense but not to the shareholder's value. I hope this catch-22 works.
I have been saying that for weeks now!! This new acquisition is ridiculous as there will have to be dillution to meet terms for Millenial Shareholders taken over...
John IMHO they need to STOP doing this and show "product"....
They are starting to look to me like exactly what YRCW tried doing some years back, acquiring everything in sight, using any leverage to buy assets of others, then housing collapse hit and YRCW went bankrupt !!! Shareholders lost everything...
Another acquisition, now RE: Millenial?? Dillution (Offering) about to occur to offset the financial costs to do so at this stage IMHO...
The Gangfeng deal put a bad taste in my mouth. The only reason I have stayed is the share price, not fundamentals, as I feel they are getting behind and have given too much already. Maybe we get lucky and Millennial owners will jump in and push us higher. A major concern I have is the next battery tech disruption, they have to beat that disruption, IMO that disrupter is very close.
UPDATE 1-Lithium Americas beats CATL to buy Millennial for $400 million
2021-11-17 12:56:01 PM ET (Reuters)
(Adds details from CEO interview, stock movement)
By Ernest Scheyder
Nov 17 (Reuters) - Lithium Americas Corp is buying Argentina-focused Millennial Lithium Corp for $400 million in stock and cash, eclipsing an offer from China's Contemporary Amperex Technology Co Ltd (CATL) as demand for the electric vehicle (EV) battery metal surges worldwide.
The deal, announced on Wednesday, comes a day after a deadline expired for CATL to respond to the Lithium Americas offer for Millennial https://www.reuters.com/legal/transactional/lithium-americas-makes-400-mln-rival-bid-millennial-lithium-2021-11-01/#:~:text=Lithium%20Americas%20makes%20%24400%20million%20rival%20bid%20for%20Millennial%20Lithium,-By%20Reuters%20Staff&text=(Reuters)%20-%20Lithium%20Americas%20Corp,Technology%20Co%20Ltd%20(CATL). CATL is the world's largest EV battery manufacturer, but does not produce any lithium.
Shares of Lithium Americas rose 3.5% on Wednesday, while shares of Millennial fell about 3%.
Both companies have tussled in recent weeks over Millennial, though Lithium Americas said it believes the fact that it is based in Canada worked to its advantage.
"This transaction is a lower regulatory risk than CATL or another Chinese company. Like it or not, there's critical mineral strategies by the U.S., Canadian and Australian governments that could have played a part in this," Jon Evans, the Lithium Americas chief executive, told Reuters.
Evans said he does not expect CATL to challenge the deal.
"This is a great expansion opportunity for us in Argentina," he said, adding the company hopes to start construction within two years. Once operational, the project is expected to produce 24,000 tonnes annually of battery-quality lithium carbonate for 40 years.
Lithium Americas has been building the Cauchari lithium project with Ganfeng Lithium Co - its largest shareholder - near the Millennial lithium deposit, which made the bu yout even more appealing, Evans said.
"I don't think you're going to see opportunities like this going forward, at least not at valuations that we have here," he said.
Lithium Americas is also developing the Thacker Pass lithium mine in Nevada, though that project has faced legal setbacks https://www.reuters.com/legal/litigation/native-americans-lose-bid-halt-digging-nevada-lithium-mine-site-2021-09-03. The company will publish a definitive feasibility study on Thacker Pass in 2022, Evans said.
I can see both sides as I definitely don’t want a bunch of debt or major dilution. However, getting resources is the name of the game these days for those who want to be part of the lithium major,. as demand is going to reach levels never seen. Look at what ALB, SQM, OROCF, PLS and even our SYAXF have been doing. LAC has plenty of resources in NV, but it only has about half of what it used to have in Cauchari due to its deal with Gangfeng. This is why I lean yes on the Millennial sale, but I would like to know how the numbers will work out exactly before I commit. I do agree with you that Cauchari production needs to start in 2022 without delays so it can ramp up to 40k tons/yr as soon as feasible. We need revenue soon.
IMO they better stick to getting to production when they say they will, without that, the amount of lithium in the ground is irrelevant. This makes us top heavy IMO. $LAC long
Millennial Lithium has rights to develop one of the largest lithium sites in South America; ~14,091 hectares, in which LAC wants to get a hold of.
China has no need for Millennial, they already own 19.9% of $LAC. Other then a pretty web site and a pilot plant experiment, @ US$3.73 per share, what value does millennial bring to $LAC? Can somebody please tell me that this is a great thing and explain why. TIA $LAC long (for now)
I mentioned that too and I thought there could be a Chinese bid snatching it from LAC. I am happy it didn’t happen, but it would be nice to find out exactly how the $400M will be financed.
As for price swings, they are nothing new to LAC. I took advantage of many in the past and may do it again. We may go under $30, but it may also shoot over $40. That is how LAC behaves. I am staying put for now with my average around $8 US.
LAC LONG!
I was foreseeing that China might come back with another bid, but glad LAC got it. Looks like the market approves. A big thankyou to Deutsche Bank downgrade. Got a bunch on that dip, almost 10% up on those shares.
Lithium Americas Enters into Definitive Agreement to Acquire Millennial Lithium
2021-11-17 11:27:56 AM ET (GlobeNewswire)
Lithium Americas Corp. (TSX: LAC) (NYSE: LAC) ("Lithium Americas") and Millennial Lithium Corp. (TSXV: ML) (A3N2:GR: Frankfurt) (MLNLF: OTCQB) ("Millennial") are pleased to announce that they have entered into a definitive arrangement agreement dated November 17, 2021 (the "LAC Arrangement Agreement") pursuant to which Lithium Americas has agreed to acquire all of the outstanding shares of Millennial (each, an "ML Share") by way of a plan of arrangement (the "LAC Transaction") for C$4.70 per ML Share, payable in common shares of Lithium Americas (the "LAC Shares") and C$0.001 in cash per ML Share (collectively, the "Purchase Price"), representing total consideration of approximately US$400 million. Based on Lithium Americas' closing price on November 16, 2021, this consideration would result in Millennial Shareholders owning approximately 9.1% of Lithium Americas.
Prior to entering into the LAC Arrangement Agreement, Millennial terminated the arrangement agreement between Millennial and Contemporary Amperex Technology Co., Ltd. ("CATL") dated September 28, 2021, as amended and assigned to Canada Brunp Contemporary (Investment) Inc. ("CBC") on October 12, 2021 (the "CATL Arrangement Agreement"), in accordance with its terms.
"This transaction is a rare opportunity to add a complementary lithium brine project and leverage our expertise developing Cauchari-Olaroz as the largest new lithium carbonate operation to come online in over 20 years," said Jonathan Evans, President and CEO of Lithium Americas. "We are confident Pastos Grandes can provide significant value for all shareholders as we execute on our growth strategy in the region over the coming years."
Farhad Abasov, President and CEO of Millennial, commented, "Millennial's board and management believe that the LAC Arrangement Agreement provides significant value to Millennial Shareholders. The high premium to the CATL Arrangement Agreement highlights the quality of the Pastos Grandes project and the efforts by the Millennial team over the past four years. Lithium Americas brings significant technical expertise and financial flexibility de-risking the development of Pastos Grandes and generating further upside for Millennial Shareholders."
Benefits to Millennial Shareholders
Benefits to Lithium Americas Shareholders
Recommendation of Millennial Board of Directors
After consultation with its financial and legal advisors, and on the unanimous recommendation of the special committee of directors of Millennial (the "Special Committee"), the LAC Arrangement Agreement has been approved unanimously by the board of directors of Millennial (the "ML Board") and the ML Board recommends that Millennial Shareholders and warrant holders ("Warrant Holders", and together with Millennial Shareholders, "Voting Securityholders") of ML Share purchase warrants ("Warrants") vote in favour of the LAC Transaction. The Special Committee has received an oral fairness opinion from Sprott Capital Partners LP ("Sprott") which states that the consideration to be received by Millennial Shareholders pursuant to the LAC Transaction is fair, from a financial point of view, to Millennial Shareholders.
Transaction Conditions and Timing
The number of LAC Shares to be issued pursuant to the LAC Arrangement Agreement will be determined by the volume-weighted average trading price ("VWAP") of the LAC Shares on the Toronto Stock Exchange (the "TSX") on the twenty trading days immediately preceding the business day immediately before the effective date of the LAC Transaction (the "Closing"), subject to a maximum of 25% of its issued share capital as at closing, notwithstanding the relevant 20-day VWAP calculation under the LAC Arrangement Agreement.
As disclosed in its press release issued on November 1, 2021, on October 30, 2021, Millennial received a non-binding proposal from Lithium Americas to acquire all of the issued and outstanding ML Shares at a price of C$4.70 per ML Share and notified CATL that this proposal constituted a "Superior Proposal" in accordance with the terms of the CATL Arrangement Agreement. CATL did not exercise its right to match and, as a result, Millennial terminated the CATL Arrangement Agreement in accordance with its terms and entered into the LAC Arrangement Agreement. The LAC Transaction represents a premium of approximately 22.1% to the value of the consideration offered pursuant to the CATL Arrangement Agreement.
Pursuant to the LAC Arrangement Agreement, Lithium Americas has also reimbursed Millennial for the termination fee of US$20 million paid to CBC in respect of the termination of the CATL Arrangement Agreement (the "Existing Termination Amount").
The LAC Transaction will be effected by way of a court-approved plan of arrangement under the British Columbia Business Corporations Act and will be subject to the approval of: (i) 66 /3% of votes cast by Millennial Shareholders; (ii) 66 /3% of votes cast by Voting Securityholders, voting together as a group; and (iii) a simple majority of the votes cast by Voting Securityholders excluding for this purpose the votes held by any person required under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions, at a special meeting of Voting Securityholders expected to be held on or about January 6, 2022 (the "LAC Meeting"). In addition to Voting Securityholder approval, the LAC Transaction is also subject to the receipt of certain regulatory and court approvals, including Competition Act approval, the approvals of the TSX and the NYSE, and other closing conditions customary in transactions of this nature.
The LAC Transaction provides for, among other things, customary ML Board support and non-solicitation covenants, with a "fiduciary out" that would allow Millennial to accept a superior proposal, subject to a "right to match" period in favour of Lithium Americas. The LAC Arrangement Agreement also provides for, among other matters, (i) a termination fee of US$20 million, payable by Millennial to Lithium Americas in certain specified circumstances, (ii) the reimbursement of the Existing Termination Amount from Millennial to Lithium Americas in certain specified circumstances, (iii) the reimbursement of Lithium Americas' expenses up to US$500,000 if the LAC Arrangement Agreement is terminated in certain other specified circumstances, and (iv) a reverse termination fee of US$20 million, held in escrow and payable by Lithium Americas to Millennial in certain other specified circumstances.
All directors and senior officers of Millennial have entered into support and voting agreements pursuant to which they have agreed to vote their ML Shares in favour of the LAC Transaction.
Pursuant to the LAC Arrangement Agreement, all outstanding Millennial convertible securities, including the Warrants, stock options ("Options"), restricted share units ("RSUs"), performance share units ("PSUs") and broker options ("Broker Options"), will be acquired by Lithium Americas and cancelled. The holders of Warrants will receive from Millennial a number of ML Shares equal to C$0.30 multiplied by the number of Warrants held by each such holder divided by the Purchase Price. The holders of Options, RSUs, PSUs and Broker Options will receive from Millennial a number of ML Shares equal to the number of such securities held by each such holder multiplied by the amount by which the Purchase Price exceeds the exercise price of such securities (if applicable) divided by the Purchase Price. Pursuant to the LAC Transaction, such newly issued ML Shares will be acquired by Lithium Americas on the same terms as the other outstanding ML Shares.
Subject to certain conditions, including the parties obtaining the requisite regulatory approvals, the LAC Transaction is expected to close in January 2022.
Upon closing of the LAC Transaction, the ML Shares and Warrants are expected to be concurrently delisted from the TSX Venture Exchange. The delisting is conditional upon TSX Venture Exchange approval.
In light of these developments, Millennial has cancelled the special meeting of Voting Securityholders scheduled to be held on November 18, 2021, and expects to convene a new meeting on or about January 6, 2022.
Full details of the LAC Transaction are included in the LAC Arrangement Agreement and will be included in a management information circular of Millennial that is expected to be mailed to Voting Securityholders in December 2021 (the "Circular"). The LAC Arrangement Agreement and Circular will be made available on SEDAR under the issuer profile of Millennial at www.sedar.com.
This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities.
Advisors and Counsel
Greenhill & Co. Canada Ltd. is acting as financial advisor to Lithium Americas and Cassels Brock & Blackwell LLP is acting as Lithium Americas' legal advisor.
Credit Suisse Securities (Canada) Inc. is acting as financial advisor to Millennial and Dentons Canada LLP is acting as Millennial's legal advisor. Sprott is acting as financial advisor to the Special Committee.
About Lithium Americas
Lithium Americas is a development-stage company with projects in Jujuy, Argentina and Nevada, United States. Lithium Americas trades on both the Toronto Stock Exchange and on the New York Stock Exchange, under the ticker symbol "LAC".
My post was correct despite the downgrade, the price target was upped. I receive my alerts from TD Direct Investing. Here is the link from Trading View via MT Newswires.
https://in.tradingview.com/news/mtnewswires.com:20211116:A2543439:0-deutsche-bank-moves-lithium-americas-rating-to-hold-from-buy/
60/40 moderate buy and hold on LAC, no sells according to brokers data currently. Pretty much these types of analysis to hold and less buying are showing up all over the market in the next three months. 3-6 months from now will have to see what ratings start to be. Sell everything and get out of the kitchen if one doesn't want to go through it. Lots of debate and studies between actively engaging the market and ones who just ignore the wild swings and just hold. Everyone has their own plans to suit their needs and expectations. I like to have my cake and eat it too and do both. Doesn't always work out, but suits my needs.
Your post is mixed up. You mean downgraded to $25.00 now by Deutsche from $31.00 don't you ??
I will be, been holding for 5 year and have no reason to dump now. She ($LAC) looks pretty good compared to 5 years ago. $LAC long
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