Lithium Co. Receives Significant Operational Permit

Source: Jake Sekelsky 11/22/2024

Atlas Lithium Corp. (ATLX:NASDAQ) recently reported it had received the operational permit for its Neves lithium project from the Minas Gerais government in Brazil, according to an Alliance Global research note.

Alliance Global Partners analyst Jake Sekelsky, in a research report published on October 28, 2024, maintained a Buy rating on Atlas Lithium Corp. (ATLX:NASDAQ) with a target price of US$45.00. The report follows Atlas’s announcement that it has received the operational permit for its Neves lithium project from the Minas Gerais government in Brazil.

Sekelsky highlighted the significance of the permit, stating, “The operational permit serves as the final step in the permitting process as ATLX now has the authorization to construct the processing facility and begin development work for the open pit lithium project.” He added that “the permitting process for the Neves Project was swift as the permit was issued just over a year from initial application in September 2023.”

The analyst noted upcoming milestones, including the completion and shipment of the processing facility from South Africa this quarter. However, he cautioned that management may take a measured approach to development given recent lithium market conditions.

Regarding the broader lithium market, Sekelsky stated, “In our opinion, the presence of multiple takeovers the lithium space during 2H24 substantiates our continued view that lithium prices are in the early innings of a recovery.” He specifically highlighted Rio Tinto’s US$6.7 billion proposed acquisition of Arcadium Lithium and Pilbara Minerals’ AUS$560 million acquisition of Latin Resources.

Alliance Global Partners’ valuation methodology is based on a NAV analysis using a 10% discount rate. Sekelsky noted, “While we remain constructive on the medium-term outlook for lithium, we expect price volatility to continue through year-end followed by a recovery in 2025, which we believe should coincide with the development of Neves.”

The share price at the time of the report of US$8.22 represents a potential return of approximately 447% to the analyst’s US$45.00 target price.

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