After following the company for some time, Beacon Securities analyst Ahmad Shaath has initiated coverage of LI-FT Power (LI-FT Power Stock Quote, Chart, News, Analysts, Financials CSE:LIFT).
In a research update to clients October 25, the analyst launched coverage of LIFT with a “Speculative Buy” rating and one-year price target of $13.00, implying a return of 85 per cent at the time of publication.
“This comes,” Shaath said, “on the back of a recent 2-day site tour of the company’s Yellowknife Project and promising initial results from the company’s first drilling campaign.”
The analyst says LIFT not only has the potential to scale, but has shown early success in exploration.
“The company’s portfolio in Yellowknife includes thirteen highly prospective pegmatite targets. Historical exploration indicates potential for high grade resources, where we highlight a historical (non-NI-43-101 compliant) resource estimate of 44 MM tonnes at an average grade of 1.40% Li2O up to a depth of 150 meters,” Shaath said. “LIFT completed ~32,000 metres from its summer program at the Yellowknife Project that tested eight pegmatite bodies. Results announced to date from ~1/3rd of the program on only four targets proved significant lithium mineralization. Based on data announced from Fi Main, Fi Southwest, Big East and Shorty alone, we estimate potential tonnage in excess of 50 MM tonnes and potential grades that could exceed 1.10% Li2O.
Lithium is a critical component in the production of lithium-ion batteries, which power a wide range of electronic devices, from smartphones and laptops to electric vehicles. Its unique electrochemical properties make it ideal for storing and releasing energy efficiently. In addition to batteries, lithium is used in the manufacture of high-performance greases due to its ability to provide superior lubrication.
The analyst explained how he arrived at a valuation for the stock.
“We employ an in-situ valuation approach based on a conceptual mineral resource of 60 MM tonnes @ 1.10%Li2O. We apply a multiple of US$250 per tonne LCE, a 15% discount to global peers’ average to arrive at our target price of $13.00 per share.
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