{"id":8962,"date":"2024-04-30T19:20:01","date_gmt":"2024-04-30T19:20:01","guid":{"rendered":"https:\/\/economicherald.net\/?p=8962"},"modified":"2024-04-30T19:20:01","modified_gmt":"2024-04-30T19:20:01","slug":"moneytalks-broker-slaps-buy-rating-on-lithium-play-argosy-minerals-with-a-big-price-target","status":"publish","type":"post","link":"https:\/\/economicherald.net\/?p=8962","title":{"rendered":"MoneyTalks: Broker slaps Buy rating on lithium play Argosy Minerals, with a big price target"},"content":{"rendered":"<p>Cannacord slaps Buy rating on Argosy Minerals with a big price target<br \/>\nArgosy could rise on the back of its Rincon Lithium Project in Argentina<br \/>\nThe company recently received EIA approval, allowing it to transition into development phase<\/p>\n<p>\u00a0<\/p>\n<p><strong>Cannacord Genuity<\/strong> has slapped a <strong>Buy rating<\/strong> on <strong><a href=\"https:\/\/stockhead.com.au\/company\/argosy-minerals-agy\/\">Argosy Minerals (ASX:AGY)<\/a><\/strong> with a <strong>price target of $0.27<\/strong> (versus the current share price of $0.14).<\/p>\n<p>Argosy is a $190m market-capped lithium development company progressing the <strong>Rincon Lithium Project in Argentina<\/strong>. It also owns the <strong>Tonopah<\/strong> early stage lithium prospect in Nevada, US.<\/p>\n<p>Earlier this month, Argosy announced that the <em>Government of Salta Province in Argentina<\/em> has approved the company\u2019s <em>Environmental Impact Assessment (EIA)<\/em> for the development of a 10ktpa battery grade lithium carbonate expansion at its 77.5%-owned Rincon Lithium Project.<\/p>\n<p>This expansion is expected to bring the total capacity of the project to 12ktpa LCE (lithium carbonate equivalent).<\/p>\n<p>\u201cThe approval de-risks Rincon, in our view, and shores up the development timeline,\u201d noted Cannacord. \u201cWe believe given the long- term nature of the project, debt will become available to the company.\u201d<\/p>\n<p>AGY has already engaged service providers in anticipation of receiving approval of the EIA, so that it can transition into the development phase.<\/p>\n<p>Following the approval, the company will now look to progress the pre-development engineering works for the 10ktpa expansion in preparation for an FID (final investment decision).<\/p>\n<p>\u00a0<\/p>\n<h2>Dynamic modelling two scenarios<\/h2>\n<p>On 15 January, AGY announced that it had upgraded its <em>Mineral Resource Estimate<\/em> by 180% at the Rincon Project to 687kt LCE @ 329mg\/l (from 245kt LCE @ 325mg\/l), with 606kt of the Resource now sitting within the Indicated category.<\/p>\n<p>Following this upgrade, the company undertook additional dynamic modelling works aimed at simulating different brine abstraction scenarios with varying pumping rates and borefield configurations.<\/p>\n<p>The modelling focussed on two main scenarios: 1) 12ktpa of LCE for a period of 42 years; and 2) an expanded operation of 24ktpa LCE for 22 years.<\/p>\n<p>\u201cThe company believes that the increase in capex related to upscaling to a 24ktpa operation is either more efficient or proportional, such that when combined with an extended mine life, does not materially change project economics,\u201d said Cannacord.<\/p>\n<p>\u00a0<\/p>\n<h2>2024 a critical year for the 2,000ktpa plant<\/h2>\n<p>Meanwhile, AGY completed its 2,000ktpa plant in Argentina in December 2022, and has since been working through a number of issues surrounding the plant.<\/p>\n<p>AGY has kept the market up to date with progress at the plant on a monthly basis, with the primary focus around the filtration circuit, continuous operations and equipment reliability.<\/p>\n<p>\u201cWe continue to view the 2,000ktpa plant as a valuable part of AGY, with learnings able to be applied to the 10ktpa expansion, and ultimately for the plant to generate positive cashflow,\u201d said Cannacord.<\/p>\n<p>However, Cannacord believes 2,000ktpa plant highlights the difficulty in ramping up brine operations.<\/p>\n<p>\u201cAGY will need to build production momentum if it is to prove its process and attract a partner for the 10ktpa expansion, in our view.\u201d<\/p>\n<p>In its April update, AGY highlighted it anticipates achieving continuous production in the coming months, and has begun product testing (with existing production) with potential offtake partners.<\/p>\n<p>\u201cOur price target is based on a NPV 10% for Rincon, which is risked according to project stage,\u201d said Cannacord.<\/p>\n<p>\u201cWe use US$22,500\/t LC lithium carbonate price, AUD\/USD currency of 0.75, and 10% discount rate in our NPV calculation.\u201d<\/p>\n<p>\u00a0<\/p>\n<h2>Argosy share price today:<\/h2>\n<p>\u00a0<\/p>\n\n<p><span class=\"mce_SELRES_start\">\ufeff<\/span><span class=\"mce_SELRES_start\"><\/span>\u00a0<br \/>\n<span class=\"et_bloom_bottom_trigger\"><\/span><\/p>\n<p>The post <a href=\"https:\/\/stockhead.com.au\/resources\/moneytalks-broker-slaps-buy-rating-on-lithium-play-argosy-minerals-with-a-big-price-target\/\">MoneyTalks: Broker slaps Buy rating on lithium play Argosy Minerals, with a big price target<\/a> appeared first on <a href=\"https:\/\/stockhead.com.au\/\">Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"<p>Cannacord slaps Buy rating on Argosy Minerals with a big price target Argosy could rise on the back of its Rincon Lithium Project in Argentina <a href=\"https:\/\/economicherald.net\/?p=8962\" class=\"read-more-link\">[more&#8230;]<\/a><\/p>\n","protected":false},"author":0,"featured_media":8963,"comment_status":"","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-8962","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - 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