Canadian lithium projects are one of the strongest ways to invest in North American electric vehicle adoption, and one stock is particularly strong, according to analysts at Stifel GMP.
The firm made the assertion in a note initiating coverage on Patriot Battery Metals Inc (TSX-V:PMET, OTCQB:PMETF), a Canadian explorer of lithium advancing its 100% owned Corvette property in Quebec.
“We see investing in Canadian lithium projects like Corvette as one of the strongest ways to invest in North American electric vehicle adoption, as Patriot (PMET) controls domestic lithium units OEMs increasingly require,” Stifel wrote.
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Analysts at Stifel called Corvette “a compelling lithium hard rock discovery with room to grow in the right address,” and slapped a Speculative Buy rating and $8.25 price target on Patriot stock.
Corvette is located within the CV lithium trend, an emerging spodumene pegmatite district that was discovered by PMET in 2017 and drilled in the fall of 2021.
“We think the Corvette property has showcased potential for a Tier One resource based off the multitude, quality, and size of spodumene pegmatite outcrops (over 70 discovered to date) outlined along trend as clustered discoveries emerge,” Stifel analysts wrote.
The group highlighted quality deposits, a strong supply chain and infrastructure as reasons for enthusiasm.
The North American supply chain policy is increasingly seeking domestic lithium units, Stifel noted.
“Strong provincial government support, attractive and stable financial incentive programs, lowest electricity rates in North America and cleanest grid globally, and a nearly 30% cost advantage on salaries for battery manufacturing employers has led to multiple midstream electric vehicle investments by global firms in Quebec,” analysts wrote.
“Increasing government interest in bringing lithium units to market alongside competitive tension for domestic value capturing have the ability to provide less dilutive, competitive avenues for financing.”
Peer comparisons
Lithium hard rock development companies are currently trading at an average of US$492 per ton of lithium carbonate equivalent (LCE) contained, but North American hard rock developers are trading at US$349/t LCE.
Other developers in the region include Critical Elements Lithium Corp (TSX-V:CRE, OTCQX:CRECF), Frontier Lithium (TSX-V:FL, OTCQX:LITOF), Rock Tech Lithium Inc (TSX-V:RCK), Sayona Mining Ltd (ASX:SYA) and Green Technology Metals Ltd (ASX:GT1).
PMET has been the best-performing mining new issue to date on the venture exchange during 2022, up 240% since its July up-listing from the CSE.
Contact Angela at angela@proactiveinvestors.com
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