Bryon Capital Markets Initiates Coverage of LAC

JON HYKAWY, Byron Capital Markets (09/23/2010)
"We are initiating coverage on Lithium Americas Corp. due to continued positive developments at its most promising and developed property, Salar de Cauchari in Jujuy Province, Argentina. With its continued and accelerating progress at Cauchari, our initial price target is $2.50. The target was derived using the company's production timeline, information on Cauchari provided by the company, our own estimates regarding the cost of lithium production using solar evaporation from the chemistry of this brine, the NI 43-101-compliant technical report and other publicly available data.

LAC holds claims to approximately 43,623 hectares (HA) at Cauchari and Salar de Olaroz (Olaroz) in northwest Argentina, near a national highway and available electricity. The company has issued a NI 43-101-compliant technical report that estimated resources on the northern portion of Cauchari. Within this confined resource area, the inferred in situ resource of lithium metal is 926,000 tons (926 Kt.) and 7.7 million tons (7.7 Mt.) potassium.

The brine chemistry is encouraging with a low Mg:Li ratio of 2.84 and average concentrations for lithium and potassium of 584 mg/L and 4,820 mg/L, respectively. Recently released 2010 drill results have exceeded these values, with average concentrations of 709 mg/L and 6,400 mg/L for lithium and potassium. The size of the Cauchari inferred resource is, at present, larger than FMC's Salar de Hombre Muerte and more than three times the size of Orocobre Limited's (Orocobre) Salar de Olaroz just to the north, according to the most recent publicly available data. This resource, with its attractive brine chemistry, could make LAC one of the largest and least expensive producers in the lithium carbonate market. The company is continuing rapid progress toward production. It is currently performing additional investigations to refine its understanding of the distribution of lithium and potassium and to evaluate aquifer hydraulics. In parallel, LAC is studying metallurgy and processing as part of its pilot tests."

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