Q: Earlier last month, three geologists published research revealing what could be the biggest discovery of lithium resources…EVER.
Is this stock worthy of consideration?
Is this stock worthy of consideration?
5i Research Answer:
LIS is to early for strong consideration, in our view. While the geologist report is definitely significant and early drill results are very positive, it is going to continue to burn through cash and likely require ongoing financing. A preliminary economic assessment called for CAPEX of $93.3M. LIS is exclusively a speculative play at the moment which we are not a fan of. The sector has been weak but LIS had outperformed, but its small size adds risk. Insiders do not own much. There is also some political risk in Argentina. We also find the company a bit promotional overall. Not necessarily 'bad' but it can at times set up unrealistic expectations.