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Quest Rare Minerals Ltd Common Message Board

hockeyguy548 5 posts  |  Last Activity: Apr 1, 2016 2:19 PM Member since: Jul 9, 2011
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  • According to Dundee Capital Markets:

    Is (dot) gd/c3NkTJ

    Lithium Americas Corp

    (LAC-T: C$0.49)

    April 1, 2016

    BUY, Speculative Risk

    Dundee target: C$1.60 (was U/R)

    Cauchari JV With SQM Paves Way for Higher Valuation

    We recommend Lithium Americas as a BUY and increase our target price to C$1.60/sh from Under Review (previously C$1.20) after incorporating Cauchari into our 10% DCF model for the first time since the WLC-LAC merger. We integrate current plans, price assumptions, and SQM's involvement. We believe LAC has unlocked much value through JV with SQM which should allow its Cauchari lithium brine in Argentina to move forward. SQM bought 50% for US$25 MM, including US$15 MM cash and a promise to fund US$10 MM development. While below our expectations, LAC gains an increased chance of production; a stalled project is kick-started; and further value may now be unlocked (see 29-March-16 note). Argentine economic reform, strong lithium demand, rising LCE prices, low cost, long life production potential, large resources, and full permits make LAC an attractive investment.

    Cauchari valuation jumps over three-fold despite half the ownership. Our valuation increases from US$66 MM (merger book value; 100%) to US$221 MM for LAC's 50% interest using a 10% NPV. This suggests Cauchari is worth US$442 MM. This is an improvement. We previously assumed US$100 MM (10% NPV) with shorter start-up and lower production rate, pre- merger. Plus the smaller LAC was heavily diluted in order to finance the project. For easier comparison with feasibility, our 8% NPV is US$580 MM vs. US$404 MM from the 2012 study.

    SQM brings more than cash. Increased CF certainty is immeasurable given SQM's marketing knowledge and construction expertise. While earn-in appears cheap, in reality, a partner who is the world's top lithium producer should help decrease LAC's technical and execution risk. Financing risk is also down considerably given a lower share of Capex ....

  • According to Dundee Capital Markets:

    is (dot) gd/U1aWRQ

    Lithium Americas Corp

    (formerly Western Lithium USA Corp.)

    (WLC-T: C$0.48)

    March 29, 2016

    BUY, Speculative Risk

    Dundee target: Under Review (was C$1.20)

    Top Lithium Producer SQM Buys 50% of Cauchari - Ready to Fast-track

    We reiterate our BUY recommendation for Lithium Americas and place our target price Under Review temporarily. This will allow time to adjust our 10% DCF model to reflect the newly formed SQM JV's impact and to understand new Cauchari development plans. Western Lithium's re-branding as Lithium Americas takes a giant leap forward as its Cauchari-Olaroz lithium brine project is targeted for JV by SQM (NYSE:SQM), the world's largest lithium producer. The purchase of 50% of Cauchari for US$25 MM in cash and expenditures places LAC on a shorter, de-risked path to production. We view this partnership favourably. SQM appears to buy in relatively cheaply, but we note that management values the large decrease in execution risk. It may also look forward to the immediate corporate recognition that comes with partnering with the top lithium producer.

    Huge stamp of approval. Argentine economic reform; strong lithium demand; rapidly rising LCE prices; low cost, long life production potential; large resources; and full permits made Cauchari an attractive investment for SQM. These attributes should now help make LAC a top lithium sector choice for investors.

    Deal in line with market, below our valuation. A US$25 MM price tag suggests US$50 MM project value vs. our US$66 MM merger valuation. Without the agreement in place, LAC would not have opportunity to realize any extra value that we or the 2012 FS suggest. It sold half the project near market but is unlocking higher valuation potential in doing so. We expect It the deal is at half of our US$97 MM historical valuation (as Cauchari, a stand-alone project inside the old Lithium Americas). ....

  • is (dot) gd/tBORKf

    - Pays $25m for stake in Lithium Americas' Cauchari project

    - Argentine venture has potential to produce 40,000 tons a year

    The race to supply lithium to the rechargeable batteries used in cell phones and electric cars is taking Soc. Quimica & Minera de Chile SA over the Andes as Argentina’s new government seeks to open up its reserves.

    SQM, the second-biggest lithium carbonate producer, agreed to pay $25 million to Lithium Americas Corp. for 50 percent of Minera Exar, which owns a project in northern Argentina’s Cauchari, the Santiago-based company said in a statement Monday. Exar will update a feasibility study for a project that may produce 40,000 metric tons a year for more than 30 years.

    Controlled by Julio Ponce, the former son-in-law of dictator Augusto Pinochet, SQM is looking to join South Korea’s Posco and FMC Corp. in Argentina where President Mauricio Macri has removed capital and currency controls and an export tax in a bid to jumpstart its mining industry. “Almost all” lithium companies are looking at Argentina right now, Mining Secretary Daniel Meilan told an industry conference in Toronto on March 7.

    “One of the main objectives of this deal is to use SQM’s technical experience to reduce risks of developing Cauchari," Lithium Americas Chief Executive Officer Tom Hodgson said in a separate e-mailed statement.

    Concession Battle

    In Chile, SQM and Albemarle Corp. harness the sun and the world’s driest desert to evaporate brine from ponds in one of the lowest cost forms of production. The Chilean company recently begun to look for acquisitions abroad after consolidating operations during the last few years, Chief Executive Officer Patricio de Solminihac said in a conference call with analysts March 3.

  • According to Dundee Capital Markets:

    Is (dot) gd/QmWSeA

    Lithium Americas Corp

    (formerly Western Lithium USA Corp.)

    (WLC-T: C$0.44) intraday

    March 23, 2016

    BUY, Speculative Risk

    Dundee target: C$1.20

    We reiterate our BUY recommendation and target price of C$1.20/sh. Western Lithium has re-branded as Lithium Americas. This puts its best foot forward; should help improve investor sentiment and take advantage of the current attractiveness of both lithium and Argentina. A 0.6x multiple is applied to our 10% Kings Valley NV DCF model; for Cauchari brine project in Argentina we use its US$66 MM merger book value. Given recent re-prioritization, it's possible that we might see this reverse, although we make no adjustments at this time. A Cauchari strategic alliance announcement expected any day could make a large impact to valuation. Kings Valley, a longer term project, may see new processing technologies explored. This might improve chances of engineering a lower cost flowsheet and successful development, but its timeline may be pushed further.

    Groundwork set to follow in footsteps of Orocobre (ORL-T, BUY, C$3.00 target). Not surprisingly, typically higher cost hard rock lithium stocks have better leverage to rising prices and have recently outperformed the fewer brine stocks. But those with good projects, whether brine or hard rock, often rise to the top, as Orocobre was able to do. ORL's and LAC's main projects share the same salars.

    We expect further share price appreciation. LAC's obvious focus on the well advanced Cauchari project should highlight its attractiveness to investors and potential partners alike; given a positive brine LCE Feasibility Study; recent pro-business and pro-mining economic reform in Argentina; strong lithium demand; rapidly rising LCE prices; large resources; and full permits.

  • According to Dundee Capital Markets:

    is (dot) gd/hO5Qpn

    Western Lithium USA Corp.

    February 16, 2016

    BUY, Speculative Risk

    Dundee target: C$1.20

    Construction of Another LCE Plant Highlights POSCO's Desires

    We recommend Western Lithium as a BUY and maintain our price target of C$1.20/sh after incorporating higher LCE and lower potash price assumptions. A 0.6x multiple is applied to our 10% DCF given project stages and risks. Western Lithium investors fear not, as plans remain intact. Media outlets broke the news over the weekend that construction had begun on another lithium carbonate pilot plant by POSCO in Argentina. But it didn't involve Western Lithium’s Cauchari-Olaroz Project. Lithea Inc. had neither obligation nor desire to disclose plans with POSCO. News was initially a surprise to some, including ourselves, thinking that POSCO had chosen an alternate partner. WLC management was aware of that partnership, and senior staff was invited to the ground breaking ceremony. That said, the POSCO-Lithea arrangement is independent of a potential POSCO-WLC commercialization agreement, and negotiations continue in light of a non-binding agreement with POSCO to develop Cauchari. But the news did highlight risk of a deal not being consummated. Risk commentary remains unchanged QoQ as per its YE 2015 MD&A filed on Friday. Management does expect to move this project forward, and news is expected in a few weeks.

    POSCO in a hurry to get into LCE production. POSCO broke ground yesterday on a new 2,500 tpa LCE pilot plant. The first in a series of commercial lithium plants will be located in Pozuelos Salar, Salta Province. A Co-operation Agreement states WLC was exclusive to POSCO until YE 2015; but POSCO was not exclusive to WLC. It was working with Lithea for a year and remains in a hurry to get to production. The news highlights Korea's largest steel maker's need to source considerable lithium. WLC and Lithea are just two of POSCO’s many potential partners.

0.180.000(0.00%)Feb 19 4:01 PMEST