Jindalee Lithium (ASX:JLL)

Jindalee on Path to Emerge as Major US Lithium Producer - Analyst

Description

Touting Jindalee Lithium’s (ASX:JLL,OTCQX:JNDAF) huge lithium deposit and its strategic location in the US, market research firm MST Access believes the company is set to emerge as a notable producer of high-quality lithium carbonate responding to a US market highly in need of supply.


“(Jindalee) is perfectly positioned to take advantage of its location near US gigafactories, designed for mass production of Li-ion batteries and in need of quality supply from within the US,” wrote Michael Bentley, senior analyst at MST Access in a new report.

Jindalee owns 100 percent of the McDermitt lithium project, currently the largest lithium resource in the US, with a mineral inventory of 3 billion tons @ 1,340 parts per million for 21.5 million tons of lithium carbonate equivalent, and strategically located amongst US gigafactories. A prefeasibility study to determine the project’s economics is currently underway and expected to be completed within the second half of 2024.

The research firm has given Jindalee a valuation of AU$2.04, blending the EV/resource at 70 percent, and risked NPV at 30 percent.

“We consider JLL significantly undervalued given its large resource, strategically positioned project and the US Government’s determination to have a sustainable domestic supply of lithium to support the production of batteries in the USA,” the report said.

McDermitt Caldera: Location of McDermitt and Thacker Pass projectsMcDermitt Caldera: Location of McDermitt and Thacker Pass projects

Report highlights:

  • Large, strategically placed 100-percent-owned asset to deliver battery-grade product to a US market needing supply. The scalable McDermitt Project is strategically located and potentially a generational-scale development, producing a battery-grade end product for US domestic gigafactories.
  • US government policy promoting domestic production incentivises new projects, driven by an inevitable increased lithium demand in the US. Neighbouring project Thacker Pass has attracted $2.26 billion in US government funding and US$650 million in strategic partner funding from General Motors, precedents that are crucial for McDermitt.
  • Key risks include short-term funding, large capital requirements for project development, potential lack of funding from US government and/or strategic investors, approval delays and execution and construction risks

For the full analyst report, click here.

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