LAC: NI 43-101 Resource Update at Cauchari-Olaroz

JON HYKAWY, Byron Capital Markets (11/19/2010)
"Lithium Americas' management announced an updated NI 43-101 on the Cauchari-Olaroz Lithium-Potassium Property in Argentina. Lithium carbonate equivalent (LCE) and potassium (K) resource equivalents grew to 7.9 and 13.3 million tons (Mt.), respectively, from 4.9 and 7.7 Mt.—an overall increase of 50%. Prior to this update, the lithium and potassium resources were classified as inferred, but 5.3 Mt. of LCE and 9 Mt. of K have now been reclassified to the measured and indicated categories.

Lithium grades also increased to at least 637 mg/L from the level of 580 mg/L in the February 2010 NI 43-101. Average potassium concentrations are now slightly higher at 5,700 mg/L. Further, the average Mg:Li ratio decreased to 2.34 from 2.84. Both of these results are positive for LAC and upgrade the quality of the brine, decrease costs and further enhance the economics of the project.

Management has stated that LAC is still on schedule to complete its PEA by Q111. . .the press release confirms that Lithium Americas is on track to become a major player in the lithium industry, further validating the quality of the brine of the Cauchari-Olaroz resource. We maintain our SPECULATIVE BUY recommendation on LAC and increase our price target to $2.80 from $2.50, based on our DCF model."

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