Why Lithium Americas Stock Jumped 11% on Monday

Lithium Americas (TSX:LAC)(NYSE:LAC) stock climbed 11% on Monday, as investors continue to be impressed with its earnings results from last week.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. Amy’s work can be found regularly on the Financial Post and MoneyWise Canada. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog Finley, and travel. Follow Amy on LinkedIn.

Published March 21, 2022 3:30 pm EDT

| More on: LACLAC

Lithium Americas (TSX:LAC)(NYSE:LAC) shares jumped 10% on Monday after the lithium miner reported its fourth-quarter and full-year 2021 results last week.

What happened?

Lithium Americas stock reported earnings for the fourth quarter and full year that beat out analyst estimates. This comes after a few consecutive quarters of reporting below estimates. The lithium company reported a net loss of US$38.5 million compared to US$36.2 million the year before. However, that was due to the investment in the Thacker Pass project.

Meanwhile, Lithium Americas stock saw its assets explode over the last year. The company reported assets of US$817.3 million, up from US$326.7 million the year before. Furthermore, management stated there are even more projects underway.

So what?

The shift towards clean energy solutions is evident this year. Countries and companies are making the transition. However, it’s become even more clear this has to happen due to the ongoing war between Russia and Ukraine. European countries in particular have become fairly reliant on Russian oil. But a clean energy solution in their home country would mean no more relying on others for power.

But what every clean energy project needs is lithium. Lithium powers the batteries that power the world. And that’s why Lithium Americas stock continues to do so well, even with a larger loss. The long-term plans the company has in place, along with the increasing assets, shows the company won’t be slowing down and continues to try and meet ongoing demand.

Now what?

Construction is underway for Lithium Americas stock and its Caucharí-Olaroz mine in Argentina. It’s now 85% complete with a target to open up by the second half of this year. The company also acquired Millennial Lithium this year and increased its stake in Arena Minerals.

In the United States, the Thacker Pass mine is now set to have its own business dedicated totally to the pass — or, at the very least, to its U.S. operations. This comes as more and more costs creep up, which is expected in the next year as well.

Shares of Lithium Americas stock were up 8% on Monday and 106% in the last year.