Is Lithium Americas Stock Still a Buy?
The Trump administration wants to own a piece of Lithium Americas (NYSE: LAC), and Wall Street can't decide if that's brilliant or terrifying. The stock spiked this week on reports that the U.S. government is negotiating a 5% to 10% equity stake tied to restructuring the company's $2.26 billion Department of Energy (DOE) loan. Add General Motors' $945 million commitment and potential shift to "take-or-pay" offtake agreements, and Thacker Pass suddenly looks like the most politically protected mining project in America.
Yet beneath the federal backstop lies an uncomfortable truth: Lithium Americas won't produce a single pound of battery-grade lithium until 2028. Spot lithium prices have crashed from their 2022 peaks. The company burns cash while building out one of the most capital-intensive projects in mining. That three-year gap between today's dilution and tomorrow's production creates a fascinating risk-reward equation.
Image source: Getty Images.
Source Fool.com
