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Lithium Americas (LAC) Earnings Surpass Estimates in Q3

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Lithium Americas Corp. (LAC - Free Report) registered loss of $6.5 million or 7 cents per share for third-quarter 2020, compared with a profit of $69 million or 75 cents in the year-ago quarter. Loss per share for the reported quarter was narrower than the Zacks Consensus Estimate of a loss of 10 cents.

Notably, Lithium Americas is yet to generate significant revenues from operations and relies on equity and other financings to fund operations.

Expenses

Exploration expenses for the third quarter were roughly $3.3 million, up around 43% year over year. The same for nine months ended Sep 30, 2020 was roughly $13 million, up around 131% year over year.

Lithium Americas Corp. Price, Consensus and EPS Surprise

 

Lithium Americas Corp. Price, Consensus and EPS Surprise

Lithium Americas Corp. price-consensus-eps-surprise-chart | Lithium Americas Corp. Quote

Exploration expenses for both periods include costs related to the Thacker Pass project (a sedimentary-based lithium property) in Nevada. The increase is mainly attributable to expenses related to the definitive feasibility study and the timing of permitting and other costs related to Thacker Pass.

Financials

Lithium Americas ended the quarter with cash and cash equivalents of roughly $72 million, including an $18 million drawn from its credit facilities to fund its Cauchari-Olaroz lithium brine project in Argentina. The company also had $184 million in undrawn credit at the end of the quarter.

Outlook

Lithium Americas remains focused on advancing two significant lithium projects — Cauchari-Olaroz and Thacker Pass. Cauchari-Olaroz is in the development phase while Thacker Pass is in the exploration stage. Lithium Americas remains committed to advance these projects to production to address the rising global demand for lithium.

At the end of the third quarter, $458 million of the $565 million budgeted capital expenditure were committed for Cauchari-Olaroz including $347 million spent. Lithium Americas expects construction at Cauchari-Olaroz to be complete by the end of 2021 with production in early 2022.

The company is also advancing engineering work and mine plan design for Thacker Pass. The fully-owned project is on track to obtain major construction permits by the end of first-quarter 2021. The company is exploring financing options for the construction of Thacker Pass including the possibility of a joint venture partner.

Price Performance

Shares of Lithium Americas have shot up 277% year to date, outperforming the industry’s rise of 1.4%.

Zacks Rank & Key Picks

Lithium Americas currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth considering in the basic materials space include Agnico Eagle Mines Limited (AEM - Free Report) , Barrick Gold Corporation (GOLD - Free Report) and Pretium Resources Inc. .

Agnico Eagle has a projected earnings growth rate of 103.1% for the current year. The company’s shares have gained around 23% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Barrick Gold has an expected earnings growth rate of 115.7% for the current year. The company’s shares have surged around 53% in the past year. It currently carries a Zacks Rank #2 (Buy).

Pretium Resources has an expected earnings growth rate of 25.5% for the current year. The company’s shares have gained around 26% in the past year. It currently carries a Zacks Rank #2.

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