Lithium Americas Stock Soars on Landmark DOE Partnership
Shares surge over 27% after the U.S. Department of Energy takes a stake in the company and approves a critical loan for its Thacker Pass project.
Shares of Lithium Americas Corp. (LAC) surged more than 27% on Wednesday following the announcement of a strategic partnership with the U.S. Department of Energy (DOE). The deal, which analysts are calling a 'game changer,' involves the DOE taking a 5% equity stake in the mining company and approving a significant loan to develop the Thacker Pass project in Nevada, the largest known lithium deposit in the United States.
The agreement provides Lithium Americas with an initial disbursement of approximately $435 million from a previously announced loan, which has been adjusted to $2.23 billion. This funding is a critical step forward in establishing a domestic supply chain for lithium, a key component in batteries for electric vehicles and other high-tech applications. The partnership is seen as a major boost to U.S. energy security and its efforts to compete in the global electric vehicle market.
The market's reaction was swift and decisive, with trading volume for Lithium Americas stock reaching nearly 17 times its daily average. The surge reflects investor confidence in the company's future and the significance of the Thacker Pass project. , the DOE will also acquire an additional 5% economic stake in the joint venture with General Motors for the Thacker Pass project.
Analysts have been quick to weigh in on the news, with Wedbush analyst Daniel Ives raising his price target for Lithium Americas from $5 to $8, while maintaining a Neutral rating. is viewed as a de-risking event for the company, providing both financial and political backing for the Thacker Pass project. The agreement also includes a deferral of $182 million of debt service over the first five years of the loan, further strengthening the company's financial position.
The Thacker Pass project is poised to become a cornerstone of the U.S. lithium industry, and this partnership with the DOE and General Motors is a significant milestone in its development. , Lithium Americas is now well-positioned to become a key player in this critical sector.