What happened

For the third day running, shares of Canadian lithium miner Lithium Americas (NYSE:LAC) are catching fire Monday -- up 14.5% through 3:30 p.m. EDT trading, on top of 3% gains Thursday and nearly 8% on Friday.

Why all this enthusiasm over a mining company? In a word: earnings -- which came out between the two previous jumps in stock price, and may explain this third jump today.

Lithium salt evaporation ponds

Image source: Getty Images.

So what

On Friday, Lithium Americas reported its fiscal second-quarter 2020 earnings -- or more precisely, its losses. With no revenue to report, Lithium Americas had nothing but losses in Q2: $0.07 per share.  

The good news is that this was no worse than analysts had forecast for the company. The better news is that Lithium Americas is moving toward getting at least two projects to a point where they can generate revenue (and maybe eventually, profit).

At the Cauchari-Olaroz lithium project in Argentina, Lithium Americas says construction work is 47% complete and capital spending is about 75% complete. Construction has resumed "on a limited basis" and "significant progress was made on the liming plant, SX plant, civil construction and solar evaporation ponds."

Meanwhile at the Thacker Pass lithium project in Reno, Nevada, Lithium Americas "has resumed full operations" at its Reno process testing facility and has already produced "over 15,000 kg of high-quality lithium sulphate" for process testing.

Now what

Analysts polled by S&P Global Market Intelligence expect that losses will continue through the end of this year, but by 2021, the forecast is for one or both of these projects to be up and running and generating increasingly large amounts of revenue -- indeed, enough to turn a $0.20 a share profit in 2021, and then quadruple it in 2022.

And that, I suspect, is why investors are buying Lithium Americas stock despite a money-losing earnings report.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.