Lithium Americas Corp. (LAC) has purchased 23,369,003 common shares of Argentina-based Arena Minerals Inc. (TSE: AN) for C$0.54 per share. The purchase was commenced through an alternative market transaction for a total value of $10 million.
Prior to the recent purchase, Lithium Americas owned 42,857,143 common shares, which represented 11.6% of Arena Mineral’s issued and outstanding share capital, and 21,428,571 share purchase warrants.
The company now owns a total of 66,226,146 common shares of Arena Minerals, representing 18% of Arena Mineral’s common shares, and 21,428,571 warrants.
Benefits of the Investment
Lithium Americas’ additional investment in Arena Minerals reflects its commitment to the region and the long-term resource development plans in Argentina.
Arena Minerals’ Sal de la Puna lithium brine project, along with Pastos Grandes lithium brine project, provides a future option in proximity to the company’s Caucharí-Olaroz lithium project, establishing Lithium Americas as a premier lithium brine developer in Argentina, the company said in a release. (See Lithium Americas stock charts on TipRanks)
On November 24, B.Riley Financial analyst Lucas Pipes maintained a Buy rating on the stock and lifted the price target to $44 (20.9% upside potential) from $25.
The rest of the Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 8 Buys and 4 Holds. The average Lithium Americas price target of $34.83 implies 4.3% downside potential. Shares of the company have gained 153.7% over the past six months.