UPDATE – Is LSC Lithium The Most Attractive Lithium Take-Over Target?

Palisade Research November 7, 2018
Category: Research

Share Price: C$0.49

Shares Outstanding: 162.2M

Market Capitalization: C$78.7M

Cash: C$7.92M

 

The lithium sector is on the cusp of a firestorm for M&A – mergers and acquisitions

And that’s when you know the bottom’s in.

LSC Lithium (TSX-V:LSC, OTCMKTS:LSSCF) has very high-quality lithium assets – we believe some of the best – and yet Mr. Market is selling them dirt cheap.

This type of opportunity never lasts. . .

Thus, we expect they will be acquired sometime in 2019.

So – let’s get you caught up with what’s happened since we last wrote about them. . .

The company just released the maiden resource on their Pastos Grandes project – increasing the total resource by 1.2 million tonnes of lithium carbonate equivalent.

It’s also worth noting that this resource remains open-at-depth.

The Pozuelos-Pastos Grandes project’s been progressing exceptionally well. And after speaking with the company’s President and CEO – Ian Stalker – it’s difficult to ignore his enthusiasm.

The company just closed a $7.92 million financing – now giving them enough to fund Pozuelos-Pastos all the way to the preliminary economic assessment (PEA), as well as the company’s operations throughout 2019.

LSC will soon be releasing the PEA results towards the end of November. The project already has received an allocation of gas capacity to support electricity and steam generation for a 20,000-tonne-per-year lithium-carbonate operatio (they also identified fresh water sources).

Unlike other companies with projects in the area, Pozuelos-Pastos has the land to build its required infrastructure.

The blend of brine coming from two salars offers the perfect chemistry, and we foresee production costs being in the industry’s lowest quartile. . .

An updated resource for Pozuelos is expected to be released this month. And considering LSC’s currently trading at $15.25/tonne – compared to an industry average of $25.00/tonne – we expect LSC to become significantly cheaper.

An important reminder is that LSC Lithium’s currently working with Pluspetrol SA – the leading private oil and gas company in Latin America.

Pluspetrol’s already entered into a 40/60 joint-venture to explore and develop the Salar de Arizaro lithium project in Salta province, Argentina.

This is Pluspetrol’s entry into the lithium space, and it chose to do it with LSC. . .

This is important as it reminds investors that LSC’s talking to many different suitors and weighing what are the best ways to bring maximum value to its shareholders.

LSC offers investors a thick margin of safety because of their high-quality assets being discounted by the market.

And as lithium prices continue recovering – expect LSC’s cheap valuation to quickly fade. . .

 

Palisade Global Investments Limited holds shares of LSC Lithium Corp. We receive either monetary or securities compensation for our services. We stand to benefit from any volume this write-up may generate. The information contained in such write-ups is not intended as individual investment advice and is not designed to meet your personal financial situation. Information contained in this report’s from sources we believe to be reliable, but its accuracy cannot be guaranteed. The opinions expressed in this report are those of Palisade Global Investments and are subject to change without notice. The information in this report may become outdated and there is no obligation to update any such information. Do your own due diligence.

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