Brokers comparing LRS to $5.7BN capped Sigma Lithium
Late last week we saw both Bell Potter and PAC Partners initiate coverage and release research reports on our lithium exploration Investment Latin Resources (ASX: LRS).
Both reports made mention of LRS’s upcoming maiden mineral resource estimate, while also detailing how LRS’s project could grow into a project analogous to that of its $5.7BN neighbour, Sigma Lithium.
Bell Potter said that they “expect that the deposit could notionally support +200ktpa spodumene concentrate operation. A potential analogue of Salinas is Sigma Lithium’s project located around 100km to the southeast”.
An interesting point that we took from the PAC Partners report was a comparison of Sigma Lithium’s rise to where LRS finds itself today.
PAC speculated that LRS’s maiden mineral resource estimate “could be of size range 11Mt to 17Mt with a grade range 1.3% to 1.5%” and that, “For comparison, Brazil peer Sigma’s initial mineral resource estimate was 13Mt at 1.56% in 2018”.
When Sigma announced that resource estimate, its market cap was around the same as LRS’s is today.
Sigma has since defined a total of five different deposits.
In a similar fashion, LRS is now putting together its first JORC resource and has just announced a new discovery, just 500m from its first discovery.
The following chart showing Sigma’s share price and notable events puts LRS’s progress into perspective:
Sigma now trades with a $5.7BN market cap, or 25 times as much as LRS’s $230M market cap.
To see the two broker reports click on the following links:
What’s next:
We want to see LRS’s maiden mineral resource estimate, for which we previously set our expectations as follows:
- Bull case (exceptional) = >15Mt JORC resource
- Base case = 5-15Mt JORC resource
- Bear case = <5Mt JORC resource
Read our latest LRS article to see the reasoning behind our expectations: Lithium deposit getting bigger - plenty more drilling to come
