LITHIUM AMERICAS C COM NPV (OTCMKTS:LACDF) Climbing Up The Charts

The share price of LITHIUM AMERICAS C COM NPV (OTCMKTS:LACDF), which develops lithium projects in the USA and Argentina, has been climbing up the charts as a result of several good news items. Over the past year, shares have gone from $0.37 to over $1. On top of it, almost 2 million shares exchanged hands some days. It has been without doubt one of the best calls made recently by the team. Have a look at the recent share price action before we explain what happened. 1 year chart for LACDFBusinessLACDF is a Canadian operator focused on two significant lithium projects: the Cauchari-Olaroz project in the Jujuy province of Argentina and the Lithium Nevada project in north-western Nevada. Additionally, the company has an organoclay plant located in Fernley, Nevada which manufactures specialty organoclay products, derived from clays, for sale to the oil and gas and other sectors. It is headquartered in Vancouver, British Columbia, Canada.The most interesting project of the company seems to be the one in Argentina. On March 28, 2016, the company signed an agreement with SQM POTASIO S.A., a subsidiary of Sociedad Quimica y Minera de Chile S.A., to run a 50/50 joint venture on the Cauchari-Olaroz project, which is a lithium brine project. The other party is a big player. Minera Exar has 130 employees in Argentina (72 as of December 31, 2016) with a 400 person expansion of the work camp underway. Regarding the project operations, the project is expected to begin production in 2019 and the expected capex only for the stage 1 is approximately $212.5 million.Something remarkable that we could read in the company's materials was that Minera Exar, Lithium Americas and SQM attended a meeting on June 29, 2017, in which the President of Argentina, Mauricio Macri, was also included. They all reaffirmed their commitment to support the development of Cauchari-Olaroz project.The following are the estimates that the company delivered to the market. Please note the internal rate of returns expected. If these numbers are right, the market will appreciate getting to know these estimates (Another author on Seeking Alpha also claimed that the expected figures were fantastic).

• Lithium carbonate price $12,000/t Li2CO3
• Average annual production 25,000 tpa Li2CO3
• Expected project life 40 years
• Project capital costs $425 million
• Operating costs $2,495/t Li2CO3
• Average annual EBITDA $233 million
• Pre-tax NPV 10% discount $1,266 million
• After-tax NPV 10% discount $803 million
• Pre-tax IRR 34.0%
• After-tax IRR 28.4%
• Payback period 3 years, 5 months

Recent Developments We will review the most remarkable news released in July and August, as it seems that the upward trend started in these months.On July 5, 2017, the company provided an update on the Cauchari-Olaroz lithium project, wherein the meeting with the President of Argentina, Mauricio Macri, was noted. Patricio De Solminihac, CEO of SQM, was quoted:

"We were pleased to meet with Mr. Macri and Mr. Morales to discuss the importance of Cauchari-Olaroz, and the shared responsibility and mutual benefits of investment and timely execution of development. We shared with the President our plans for capital investment and employment, and the construction timeline to achieve our production targets. SQM is firmly committed to the advancement of the project and to the success of Jujuy-based Minera Exar." Source

Additionally, many new details about the project were given. In our opinion, the most relevant were that the "total direct employment during the two-year construction period is expected to total over 1,000 people" and the company had closed an agreement with GFL International Co., Ltd. that will provide $172 million in financing.On July 17, 2017, the company announced an investment agreement with BCP Innovation Pte Ltd., under which $113 million will be received to fund a portion of the Company's share of construction costs for the Cauchari-Olaroz lithium project. Tom Hodgson, Lithium Americas' CEO, was quoted:

"We are very pleased to complete this important financing with Bangchak and to welcome Bangchak's CEO, Chaiwat Kovavisarach, onto the Lithium Americas' Board of Directors. Together with the recent Ganfeng investment, Lithium Americas has raised US$285 million in debt and equity and is in a strong financial position to fund our remaining share of Cauchari-Olaroz' capital costs alongside our joint venture partner, SQM. With development now well underway, we remain on track to reach production by 2019 with the objective of becoming the next low-cost lithium producer from brine." Source

On August 15, 2017, the company noted the results of the annual general meeting of shareholders, which was held on August 14, 2017. The most relevant was that PricewaterhouseCoopers LLP was appointed as Lithium Americas' auditor and George Ireland, a director of Lithium Americas since November 2015, was appointed as Chairman of the Board.Solid Financial Situation and Other ShareholdersWe had a look at the last quarterly report and saw that the balance sheet is quite clean:Period Ending6/30/20163/31/201612/31/20159/30/2015Current Assets (All numbers in thousands)Cash And Cash Equivalents12,2372,7066,1465,552Short Term Investments----Net Receivables61614,268798823Inventory797536489426Other Current Assets833--254Total Current Assets14,48317,5107,4337,055Long Term Investments17,82319,980150150Property Plant and Equipment19,87220,17450,29361,336Goodwill----Intangible Assets----Accumulated Amortization----Other Assets1,667---Deferred Long Term Asset Charges----Total Assets53,84557,66457,87668,541SourceOn the liability side, note that the company has almost no long term debt. Also note the amount of assets in comparison to the amount of liabilities:Accounts Payable (All numbers in thousands)9342,1682,8693,285Short/Current Long Term Debt1651,6752,0322,930Other Current Liabilities----Total Current Liabilities1,0993,8434,9016,215Long Term Debt9871,0281,0701,111Other Liabilities170170300300Deferred Long Term Liability Charges----Minority Interest----Negative Goodwill----Total Liabilities2,2565,0416,2717,626SourceWe were not the first to find these financial accounts and the company. Other shareholders bought a long time ago.

HolderSharesDate Reported% OutValueFisher Asset Management, LLC62,000Jun 29, 20170.02%42,160SourceThe following also own shares:

HolderSharesDate Reported% OutValueVanEck Vectors ETF Tr-Rare Earth/Strategic Metals ETF3,502,654May 30, 20170.91%2,451,857Global X Fds-Global X Lithium ETF2,869,349May 30, 20170.74%2,008,544U.S. Global Investors Fund-World Precious Minerals Fund1,750,000Dec 30, 20160.45%1,067,500BlackRock Global SmallCap Fund1,178,423Mar 30, 20170.31%824,896Managed Account Ser-Global Small Cap Port328,890Jan 30, 20170.09%233,511SourceConclusionThere is a lot to like with LACDF and the market has taken notice. First of all, the company's main project is expected to provide after-tax IRR 28.4% in 3 years and 5 months, which is astonishing. Additionally, the company has already received financing commitments and several market participants acquired shares long time ago. Furthermore, the financial situation of the company is quite solid, as the company owns a large amount of assets and little liabilities. Regarding the recent increase in the share price, we believe that the announcements regarding the meeting with the President of Argentina and the capital raised have excited the market. To sum up, there is a lot to like with LACDF and why it remains a top lithium play.We will updating out subscribers as soon as we know more. For the latest updates on LACDF, sign up below!For the full story, check out our complete coverage on LACDF.Image courtesy of nsscclerk via FlickrDisclosure: We have no position in LACDF and have not been compensated for this article.