Century Lithium Corp. (TSX-V:LCE, OTCQX:CYDVF) has earned an ‘Outperform’ rating from Noble analysts who noted the competitive advantages of the company’s 100%-owned Clayton Valley lithium project located near Silver Peak in Nevada.
“Clayton Valley offers several competitive advantages, including a large land package in a mining-friendly state, an existing lithium carbonate equivalent resource base, well-developed infrastructure, direct lithium extraction technology, a fully operational pilot plant, and secured water rights,” the analysts wrote in a note to clients.
A feasibility study for Clayton Valley is being advanced and is expected in the second half of 2023, the analysts noted.
Noble’s analysts also pointed to Century Lithium’s collaboration with Koch Technology Solutions for the application of Koch’s Li-Pro direct lithium extraction (DLE) process, with Century Lithium in April installing equipment from Koch at its lithium extraction facility.
“The companies will conduct a field trial of Koch's Li-Pro direct lithium process to treat the process solutions at the pilot plant in the leaching of bulk sample claystone collected from Century's Clayton Valley lithium project,” the analysts wrote.
“The equipment operated successfully throughout an initial seven-day start-up. Results from the program will enable Koch to provide engineering and cost data for full-scale installation of the DLE plant in Century Lithium's project.”
When justifying their ‘Outperform’ rating on the stock, the analysts noted that North American lithium projects have been gaining traction.
“With critical minerals supplies increasingly becoming subject to geopolitical risk, lithium projects in North America benefit from a variety of funding options as governments, electric vehicle battery manufacturers and car makers seek to secure supplies to de-risk their own long-term objectives,” they wrote.
The analysts awarded the stock a C$3.95 price target, representing a significant upside on Century Lithium's current share price of C$1.04.
“We have used a discount rate of 12% to reflect the need for a higher risk premium based on the company's small size, lack of revenue or operating income, and need for funding to advance its growth initiatives,” the analysts explained.
“Rather than adjusting our price target to reflect a multiple of net asset value, we have risk-adjusted our price target with our discount rate.”
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