LAC stock exploded higher on September 28, 2020, as a sympathy play on the lithium deal Tesla inked with Piedmont Lithium.
Piedmont Lithium (PLL) announce that it has entered into a binding agreement with Tesla (TSLA) for the supply of spodumene concentrate from Piedmont’s North Carolina deposit to Tesla. The Agreement is for an initial five-year term on a fixed-price binding purchase commitment from the delivery of first product, and may be extended by mutual agreement for a second five-year term. The Agreement covers a fixed commitment representing approximately one-third of Piedmont’s planned SC6 production of 160,000 tonnes per annum for the initial five-year term as well as an additional quantity to be delivered at Tesla’s option.
On September 23, 2020, BMO Capital analyst Joel Jackson says his assumption is that Tesla’s (TSLA) acquired rights in an unnamed Nevada lithium clay project is not Lithium Americas’ (LAC) Thacker Pass clay project and instead is another Nevada land package. Lithium is not currently mined from clay with several companies such as Lithium Americas investigating commercial methods, so there is technology risk, Jackson tells investors in a research note. However, the thought of Tesla vertically integrating into lithium production one day will “spook lithium producer share prices,” even if Tesla is only being speculative, says the analyst. Jackson adds that clay lithium mining is still hypothetical and could take several years until an actual mine is in production. On Lithium Americas, the analyst points out that some insiders have been selling shares over the last two months into share price strength and the company has not issued a press release.
Back on August 14, 2020, when the company reported earnings, they issued the following statement, “We remain focused on protecting our workers and communities, while coordinating closely with the Province of Jujuy to ensure we operate responsibly and safely as we begin to restart construction activities over the next few weeks,” said Jon Evans, President and CEO of Lithium Americas. “I would like to personally thank all of our workers in Argentina for their commitment and recognize the significant contribution they continue to make to the success of the project for the benefit of all stakeholders. With respect to the Thacker Pass lithium project in Nevada, we continue to make significant progress with the recent release of the draft Environmental Impact Statement by the Bureau of Land Management.”