Lithium Americas Corp. (LAC) announced that it has inked a C$6.0 million ($4.8 million) private placement deal with Arena Minerals Inc. (CA:AN). Per the terms of the deal, LAC will buy 42,857,143 of Arena’s subscription receipts for C$0.14 per subscription receipt. LAC shares jumped 10.7% on the news to close at $15.90 on July 12. (See Lithium Americas stock charts on TipRanks)
LAC engages in advancing lithium development projects, while Arena Minerals is an exploration-stage lithium company focused on developing brine resources in Argentina. The investment will boost LAC’s resource exploration opportunities in Argentina.
Arena Minerals is in the process of raising C$10 million through private placements to fund its acquisition of the Sal de la Puna lithium brine project in Salta, Argentina. Of this C$10 million, LAC will subscribe for C$6 million, which upon the closing of Arena’s placement, will result in LAC holding 12.9% of the company’s outstanding shares.
Currently, Lithium Americas, together with Ganfeng Lithium Co., Ltd is advancing exploration in the Caucharí-Olaroz lithium project.
Jon Evans, President and CEO of LAC, said, “This investment will allow Lithium Americas to advance our long-term resource development plans, while maintaining our team’s focus on execution at Caucharí-Olaroz and the Thacker Pass project.”
Based on 1 Buy, the stock has a Moderate Buy consensus rating. Canaccord Genuity analyst Katie Lachapelle recently maintained a Buy rating on LAC with a price target of $24. This implies 51.4% upside potential to current levels. Shares have gained 213.6% over the past year.
TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on LAC, with 7.5% of investors increasing their exposure to LAC stock over the past 30 days.
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