Fundamental Research Corp has started coverage on Argentina Lithium & Energy Corp (TSX-V:LIT, OTCQB:PNXLF) with a “Buy” rating and a price target of $0.52.
The firm's analysts noted that Argentina Lithium holds a portfolio of four early-stage/underexplored lithium assets that cover a combined 69,000 hectares (Ha) across four salars (salt lakes) in Argentina.
That location is important, according to the analysts, as Argentina, Chile, and Bolivia make up the 'Lithium Triangle', which hosts 60% of global lithium reserves. Specifically, three out of Argentina Lithium’s four projects are in Salta province, which was named the second-best province for mining by the Fraser Institute in 2021.
Shares of Argentina Lithium traded at $0.25 on Wednesday.
READ: Argentina Lithium & Energy reveals positive lithium results in initial drilling at the Rincon West project in Argentina
“As [Argentina Lithium’s] projects are close to well-known projects held by majors, the company can be subject to M&A events if it is able to delineate a resource in one or more of its assets,” the Fundamental Research analysts said in a note to clients. “The first hole of an ongoing five-hole drill program at one of its key projects (Rincon West) returned promising values (225 to 380 milligrams per liter).”
They noted that Argentina Lithium is planning to conduct electromagnetic surveys on its Antofalla North and Incahuasi projects this year, and it expects a maiden resource estimate in 2023.
In terms of the price target, the company is “trading at just $215 per hectare (Ha) versus the average of $524 per Ha for pre-resource stage juniors,” the analysts pointed out. "The sector had several M&A transactions in the past year, and we believe that miners and battery manufacturers are constantly seeking attractive lithium projects for acquisition to secure long-term/stable supply.”
Argentina Lithium is focused on acquiring high-quality lithium projects in Argentina, and advancing them towards production in order to meet the growing global demand from the battery sector. The management group has a long history of success in the resource sector of Argentina and has assembled a team of experts to acquire and advance the best lithium properties in the Lithium Triangle.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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