Watch List: LithiumBank Resources (LBNK)

[dan_s]

Note received today from Raymond James: LITHIUMBANK RESOURCES CORP. (LBNK-TSXV)
Sustainability: Resource Management

LBNK current price is $0.93Cdn

Pass Go, Advance to Boardwalk, Collect District Scale-Lithium Resource

RECOMMENDATION
We are initiating coverage on LithiumBank with an Outperform rating and C$3.00 price target.
Our constructive stance is a function of strong returns on the company’s large-scale Boardwalk
project, as well as upside from the company’s earlier-stage assets. With an expected return of 22%
in the Boardwalk PEA, we see material upside based on a variety of achievable enhancements
bringing returns to as much as 30%. Further, we believe the valuation differential between LBNK
and DLE peers illustrates upside in the name as resources are increasingly defined. We see nearterm
catalysts including the PEA at Park Place, updated PEA and brine testing at a large-scale pilot
plant at Boardwalk.

ANALYSIS
We believe a large, deliverable, resource with sustainability benefits in a secure jurisdiction
makes LBNK a potential takeout candidate. As detailed elsewhere in this report, a forecasted
shortfall in global lithium supply is driving both lithium industry players and those in the EV value
chain to look to secure supply. This has resulted in multiple transactions in the sector, some
of which we believe are relevant to LBNK. In light of the company’s large land package, lowrisk
jurisdiction, and potentially significant resource, we consider LBNK to be highly attractive
to potential suitors. While the unconventional Direct Lithium Extraction (DLE) technology LBNK
will employ is admittedly less known, we see this being de-risked over time via LBNK’s pilot plant
testing and projects being advanced by peers.

Enhancements at Boardwalk support robust economics. While returns at LBNK’s Boardwalk
property are solid as contemplated in the PEA, we see meaningful upside associated with
several highly achievable enhancements to project economics. Foremost among these are
Federal tax credits, which we understand could reduce project capex by 10-15%. As Boardwalk
is located in a region with a history of oil and gas drilling, the re-use of existing wells could
also meaningfully reduce capex. Beyond this, we also see the potential for DLE technology and
process improvements, as well as opex savings related to reagent consumption. Considering
these factors, we see returns at Boardwalk reaching up to 30%.

Valuation upside implied by more advanced peers. Among the public competitors targeting
DLE projects, we believe the most relevant is E3 Lithium, as it is also located in Alberta in the Leduc
formation with many similarities in terms of land base and geology. While E3’s stated resource
is ostensibly larger than LBNK’s, we note the imminent resource estimate at Park Place and the
company’s Saskatchewan properties should close this gap. While E3 has also been de-risked to a
greater extent, there exists a wide gap between E3’s market cap of $264 mln and LBNK’s of just
$34 mln representing a barometer for the upside in LithiumBank as its projects advance.

VALUATION
Our C$3.00 price target is based on our DCF analysis with key assumptions (Exhibit 14). See our
Valuation and Financials sections for more details.

[Fraser921]

speaking of Lithium, Rok resources has an update on it's Lithium holdings

https://rokresources.ca/rok-resources-provides-lithium-update-preliminary-economic-assessment-successful-dle-pilot-production-of-battery-grade-lithium-carbonate/