Shares of Canadian lithium miner Lithium Americas (NYSE:LAC) exploded higher in Monday trading -- up 12.5% as of 3:10 p.m. EDT -- and on the strangest of news.
Earlier this month, the Vancouver, British Columbia-based company announced that an unspecified number of workers at its Cauchari-Olaroz lithium project in Jujuy, Argentina, had tested positive for COVID-19, prompting a suspension of construction work on the mine. Today, Lithium Americas issued an update on the situation and the news isn't great.
All workers quarantined at the Cauchari-Olaroz site have now been tested, and at least some have tested positive for COVID-19. According to the company, "the majority of positive cases are asymptomatic" and "approximately 20% of positive cases are recovered."
Yet the worksite remains "demobilized." Today's press release didn't contain any positive news about mine construction work restarting -- nothing, to be specific, that would explain why the stock jumped 12.5% on the news.
That's a shame because, up until the coronavirus came onto the scene, things looked to be going pretty well for Lithium Americas. This mining company wasn't generating positive free cash flow, true, but it at least last year managed to report profitability last year based on generally accepted accounting principles (GAAP). Now, with the global economy in shambles and Lithium Americas having coronavirus troubles of its own, analysts are forecasting a $0.32 GAAP loss for this year.
On the other hand, analysts still expect to see Lithium Americas get back to reporting profits next year, and to resume growing profits strongly thereafter. Perhaps the real story today, then, is that Lithium Americas is still on track to get back to normal.