Global Materials | Industrials | Commodities

Rahul Jain

Equity Bottom-Up

<ul>
<li>Policy-Backed anchor: Lithium Americas’ Thacker Pass is now Washington’s flagship lithium project, backed by a $2.26bn DOE loan, GM’s $625m JV, and a potential U.S. equity stake.</li>
<li>Industrial strategy shift: The Trump administration is moving from grants to direct equity and loans, echoing China’s model of securing critical minerals through state capital and long-term offtakes.</li>
<li>Bigger picture: The key opportunity is anticipating U.S. intervention beyond lithium — into nickel, cobalt, graphite, and rare earths — as it builds a parallel to China’s strategy.</li>
</ul>


Policy-Backed anchor: Lithium Americas’ Thacker Pass is now Washington’s flagship lithium project, backed by a $2.26bn DOE loan, GM’s $625m JV, and a potential U.S. equity stake.
Industrial strategy shift: The Trump administration is moving from grants to direct equity and loans, echoing China’s model of securing critical minerals through state capital and long-term offtakes.
Bigger picture: The key opportunity is anticipating U.S. intervention beyond lithium — into nickel, cobalt, graphite, and rare earths — as it builds a parallel to China’s strategy.


Matching China’s Playbook: U.S. Turns to Lithium Americas

Investigative Investment Research, Bleecker Street Capital

Bleecker Street Research

Investigative Investment Research

Bleecker Street Capital

Bleecker Street Capital is a short-biased investment firm.

<ul><li>LAC is a pre-revenue junior miner with aspirations to turn its lithium clay deposit at the Thacker Pass mine in Nevada into the world’s sixth-largest lithium producer by 2028, eventually rising to 25% of global supply. </li><li>LAC’s Thacker Pass mine is grossly uneconomic. Using the company’s own inputs, Thacker Pass has an NPV of zero at current lithium prices, which remain far above long-term averages.</li><li>The Thacker Pass mine is a clay deposit mine. There does not appear to be a single operational lithium clay mine globally. Experts agree that extracting lithium from clay does not work using reasonable output price assumptions.</li></ul>

LAC is a pre-revenue junior miner with aspirations to turn its lithium clay deposit at the Thacker Pass mine in Nevada into the world’s sixth-largest lithium producer by 2028, eventually rising to 25% of global supply. LAC’s Thacker Pass mine is grossly uneconomic. Using the company’s own inputs, Thacker Pass has an NPV of zero at current lithium prices, which remain far above long-term averages.The Thacker Pass mine is a clay deposit mine. There does not appear to be a single operational lithium clay mine globally. Experts agree that extracting lithium from clay does not work using reasonable output price assumptions.

Lithium Americas (LAC ): From Dust To Dust

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Yesterday during the day, <a href="https://www.smartkarma.com/entities/allkem-ltd" target="_blank" data-smartkarma-citation="entities:3572:1" rel="noopener">Allkem Ltd (AKE AU)</a> shareholders approved the Scheme and <a href="https://www.smartkarma.com/entities/livent-corp" target="_blank" data-smartkarma-citation="entities:27434:1" rel="noopener">Livent (LTHM US)</a> shareholders approved the merger. The deal is done. Allkem last trades 21 Dec.</li>
<li>NEWCO starts trading 4 January in the US but the Arcadium Lithium CDIs start trading 22 Dec in Australia. S&amp;P/ASX announced they will replace Allkem in the ASX200.</li>
<li>But I have been asked for a breakdown of flows and timing again, so I have put it into a handy table which I hope makes it less confusing.</li>
</ul>


Yesterday during the day, Allkem Ltd (AKE AU) shareholders approved the Scheme and Livent (LTHM US) shareholders approved the merger. The deal is done. Allkem last trades 21 Dec.
NEWCO starts trading 4 January in the US but the Arcadium Lithium CDIs start trading 22 Dec in Australia. S&amp;P/ASX announced they will replace Allkem in the ASX200.
But I have been asked for a breakdown of flows and timing again, so I have put it into a handy table which I hope makes it less confusing.


Allkem+Livent=Arcadium : Expected Index Flows

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>There are no constituent changes for the MVIS Global Rare Earth/Strategic Metals Index at the March rebalance. There are free float and capping changes though.</li>
<li>One way turnover is estimated at 3.1% and will result in a one-way trade of US$19m. Flows are relatively small with no impact over 1x ADV on any stock.</li>
<li>The June rebalance should have constituent changes with an increase in the number of stocks in the index universe.</li>
</ul>


There are no constituent changes for the MVIS Global Rare Earth/Strategic Metals Index at the March rebalance. There are free float and capping changes though.
One way turnover is estimated at 3.1% and will result in a one-way trade of US$19m. Flows are relatively small with no impact over 1x ADV on any stock.
The June rebalance should have constituent changes with an increase in the number of stocks in the index universe.


MVIS Global Rare Earth/​​​Strategic Metals Index Rebalance: Float & Capping Changes on Friday

Research from Water Tower Research, Water Tower Research

Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Equity Research Firm

Thematic (Sector/Industry)

<ul><li>WTR Sustainable Index: During the week ended February 10, 2023, the WTR Sustainable Index outperformed the broader market, rising 0.2% W/W versus the S&amp;P 500 Index (down 1.1%), the Russell 2000 Index (down 3.4%), and the Nasdaq Composite Index (down 2.4%). Advanced Transportation Solutions (70% of the index) drove the outperformance, rising 1.7% , while Energy Technology (9% of index) was down 5.0% and Industrial Climate and Ag Technology was down 2.2%.</li><li>Valuation: Based on forward 12-month consensus estimates, the current P/E ratio of the WTR Sustainable index is 24.5x versus 18.4x for the S&amp;P 500.</li><li>Consensus estimates changes: During the week ended February 10, 2023, there were five <span style="box-sizing: border-box; text-decoration: underline;">increases</span> (three in Energy Technology and two in Industrial Climate and Ag Technology) 2022 revenue estimates. There were <span style="box-sizing: border-box; text-decoration: underline;">decreases</span> in 2022 revenue estimates for two companies each in Advanced Transportation Solutions and Industrial Climate and Ag Technology.</li></ul>

WTR Sustainable Index: During the week ended February 10, 2023, the WTR Sustainable Index outperformed the broader market, rising 0.2% W/W versus the S&amp;P 500 Index (down 1.1%), the Russell 2000 Index (down 3.4%), and the Nasdaq Composite Index (down 2.4%). Advanced Transportation Solutions (70% of the index) drove the outperformance, rising 1.7% , while Energy Technology (9% of index) was down 5.0% and Industrial Climate and Ag Technology was down 2.2%.Valuation: Based on forward 12-month consensus estimates, the current P/E ratio of the WTR Sustainable index is 24.5x versus 18.4x for the S&amp;P 500.Consensus estimates changes: During the week ended February 10, 2023, there were five increases (three in Energy Technology and two in Industrial Climate and Ag Technology) 2022 revenue estimates. There were decreases in 2022 revenue estimates for two companies each in Advanced Transportation Solutions and Industrial Climate and Ag Technology.

Weekly Sustainable Investing Surveyor: Week Ended February 10, 2023

Canada

Lithium Americas Corp. operates as a mining company. The Company mines, produces, and supplies lithium. Lithium Americas conducts its business operations in Argentina and Canada.

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Lithium Americas (LAC CN)

Matching China’s Playbook: U.S. Turns to Lithium Americas

Lithium Americas' Thacker Pass project leads US shift to state-backed mineral investments, mirroring China's strategy for securing critical minerals.

Rahul Jain

Lithium Americas (LAC ): From Dust To Dust

LAC is a pre-revenue junior miner with aspirations to turn its lithium clay deposit at the Thacker Pass mine in Nevada into the world’s sixth...

Bleecker Street Research

Allkem+Livent=Arcadium : Expected Index Flows

The Allkem/Livent deal has now been approved by shareholders of both companies. Index providers have started to make announcements. There are LOTS...

Travis Lundy

MVIS Global Rare Earth/Strategic Metals Index Rebalance: Float & Capping Changes on Friday

There are no constituent changes in March, only float/capping changes. One-way turnover is estimated at 3.1% resulting in a one-way trade of...

Brian Freitas

Weekly Sustainable Investing Surveyor: Week Ended February 10, 2023

Based on forward 12-month consensus estimates, the current P/E ratio of the WTR Sustainable index is 24.5x versus 18.4x for the S&P 500.

Water Tower Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Matching China’s Playbook: U.S. Turns to Lithium Americas

​Lithium Americas' Thacker Pass project leads US shift to state-backed mineral investments, mirroring China's strategy for securing critical minerals.

Rahul Jain

Lithium Americas (LAC ): From Dust To Dust

LAC is a pre-revenue junior miner with aspirations to turn its lithium clay deposit at the Thacker Pass mine in Nevada into the world’s sixth...

Bleecker Street Research

Allkem+Livent=Arcadium : Expected Index Flows

The Allkem/Livent deal has now been approved by shareholders of both companies. Index providers have started to make announcements. There are LOTS...

Travis Lundy

MVIS Global Rare Earth/​​​Strategic Metals Index Rebalance: Float & Capping Changes on Friday

There are no constituent changes in March, only float/capping changes. One-way turnover is estimated at 3.1% resulting in a one-way trade of...

Brian Freitas

Weekly Sustainable Investing Surveyor: Week Ended February 10, 2023

Based on forward 12-month consensus estimates, the current P/E ratio of the WTR Sustainable index is 24.5x versus 18.4x for the S&P 500.

Water Tower Research

Lithium Americas' Thacker Pass project leads US shift to state-backed mineral investments, mirroring China's strategy for securing critical minerals.

MVIS Global Rare Earth/Strategic Metals Index Rebalance: Float & Capping Changes on Friday