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Jindalee on Path to Emerge as Major US Lithium Producer – Analyst

Description

Touting Jindalee Lithium’s (ASX:JLL,OTCQX:JNDAF) huge lithium deposit and its strategic location in the US, market research firm MST Access believes the company is set to emerge as a notable producer of high-quality lithium carbonate responding to a US market highly in need of supply.

“(Jindalee) is perfectly positioned to take advantage of its location near US gigafactories, designed for mass production of Li-ion batteries and in need of quality supply from within the US,” wrote Michael Bentley, senior analyst at MST Access in a new report.

Jindalee owns 100 percent of the McDermitt lithium project, currently the largest lithium resource in the US, with a mineral inventory of 3 billion tons @ 1,340 parts per million for 21.5 million tons of lithium carbonate equivalent, and strategically located amongst US gigafactories. A prefeasibility study to determine the project’s economics is currently underway and expected to be completed within the second half of 2024.

The research firm has given Jindalee a valuation of AU$2.04, blending the EV/resource at 70 percent, and risked NPV at 30 percent.

“We consider JLL significantly undervalued given its large resource, strategically positioned project and the US Government’s determination to have a sustainable domestic supply of lithium to support the production of batteries in the USA,” the report said.

Report highlights:

Large, strategically placed 100-percent-owned asset to deliver battery-grade product to a US market needing supply. The scalable McDermitt Project is strategically located and potentially a generational-scale development, producing a battery-grade end product for US domestic gigafactories.US government policy promoting domestic production incentivises new projects, driven by an inevitable increased lithium demand in the US. Neighbouring project Thacker Pass has attracted $2.26 billion in US government funding and US$650 million in strategic partner funding from General Motors, precedents that are crucial for McDermitt.Key risks include short-term funding, large capital requirements for project development, potential lack of funding from US government and/or strategic investors, approval delays and execution and construction risks

For the full analyst report, click here.

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