Shares of lithium mining company Lithium Americas Corp. (LAC) plummeted 5.17% on Wednesday, despite the company announcing a joint venture deal with automotive giant General Motors to build and operate the Thacker Pass lithium project in Nevada.
Under the terms of the agreement, GM will contribute $430 million in cash and a $195 million letter of credit, in exchange for a 38% stake in the joint venture. Stifel GMP analyst Cole McGill maintained a buy rating on LAC and a $10 price target, calling the deal a "significant de-risking milestone" that substantially funds the Thacker Pass project.
However, the positive news was not enough to boost LAC's stock price on Wednesday. National Bank also upgraded LAC to Outperform and raised its price target, but the exact reasons behind the sharp sell-off remain unclear. It is possible that investors were taking profits after the stock's recent run-up, or had concerns about the valuation and timing of the project.
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