Century Lithium Corp. (TSX-V:LCE, OTCQX:CYDVF) has earned an ‘Outperform’ rating from analysts at Noble who believe the lithium exploration company’s stock price can grow by about 645%.
They gave the stock, which is currently trading hands at C$0.53, a C$3.95 price target based on a discounted cash flow analysis.
“The company has published a NI 43-101 preliminary feasibility study of its Clayton Valley lithium project that is in a favorable mining jurisdiction and benefits from well-developed infrastructure,” the analysts highlighted in a note to clients.
“Now that Century has demonstrated that it can produce battery-grade lithium carbonate from pilot plant solutions treated at Saltworks Technologies, the company is now in the process of building on its strong foundation to optimize the project.”
They also pointed to the potential sale of sodium hydroxide, a byproduct from Century's pilot plant testing, as a revenue source as a positive.
“The western United States is largely dependent on imports of sodium hydroxide for water treatment and other industrial uses,” they wrote.
“A market study, to be incorporated in the feasibility study, will reflect the potential for revenue from sodium hydroxide sales.”
They believe key catalysts for the stock include the feasibility study expected in the first quarter of 2024, commencement of a Plan of Operations, initiation of permitting, production of lithium carbonate on-site at Clayton Valley in Nevada, and the pursuit of financing opportunities, including strategic partnerships and federal funding.
“While Century Lithium has no debt, it will need to secure funding to advance development of Clayton Valley,” the analysts wrote.
“Our rating reflects the fact that the company is not generating revenues or operating cash flow.”