What happened
Shares of start-up lithium miner -- and General Motors partner -- Lithium Americas (LAC) soared 8.1% through 11:50 a.m. ET on Tuesday, after a federal district court in Nevada issued what the company called a "favorable ruling" in an appeal against a Bureau of Land Management (BLM) ruling.
So what
The judge's decision didn't give Lithium Americas everything it wanted. As Reuters relates, the U.S. District Court for the District of Nevada instructed the BLM to consider whether Lithium Americas should be permitted to dump waste rock from its Thacker Pass lithium project at a location just south of the Oregon border. That decision could still go against Lithium Americas.
Still, the court did affirm that the permitting process for Thacker Pass, conducted under the Trump administration, "was conducted thoroughly and responsibly" and rejected claims that the project would do undue environmental harm. Taken as a whole, the judge's decision "leaves in place the final regulatory approval needed in moving Thacker Pass into construction."
Now what
In short, Lithium Americas now has a green light to proceed with exploitation of what Lithium Americas calls "the largest known lithium resource in the U.S." It keeps the company on track to begin producing up to 40,000 tons of lithium carbonate per year by late 2026, and as much as 80,000 tons per year in a later Phase 2 of the project.
And it frees up investors to stop worrying about permitting -- and start wondering how profitable Lithium Americas might be once it gets its business fully underway. In that regard, analysts polled by S&P Global Market Intelligence think it entirely likely that Lithium Americas could turn profitable this very year, earning as much as $0.84 per share -- and tripling that profit in 2024. With Lithium Americas stock priced at just $25 and change today, this values the stock at 10x next year's projected profit.
No wonder investors are excited.
