Co. Lands $30M Investment, Offtake From Mitsui

Source: Joe Reagor 04/30/2024

This is a significant development for the California minerals explorer, but a catalyst expected to have greater impact should happen soon, noted a ROTH Capital Partners report.

Atlas Lithium Corp. (ATLX:NASDAQ) received a US$30 million ($30M) investment and an offtake agreement from Mitsui, reported Roth MKM analyst Joe Reagor in an April 1 research note. Consequently, Roth reduced its target price on the California-based mineral explorer to US$36 per share from US$39 to reflect dilution resulting from the deal.

Overall, however, Roth considers the investment “an incremental positive for Atlas as it demonstrates further confidence in the company’s project from the lithium battery industry,” Reagor wrote.

112% Return Implied

Atlas’ price today is about US$17.02 per share, noted Reagor. As such, the return to target, albeit lower, is still compelling, at 112%.

Roth reiterated its Buy rating on the lithium-focused mining company.

Details of Each Component

Reagor summarized the specifics of Atlas’ arrangement with Mitsui.

As for the US$30M investment, Mitsui agreed on March 28 to impart this via an equity transaction at a price equal to a 10% premium to Atlas’ five-day volume-weighted average price.

Regarding the offtake, Mitsui agreed to purchase 15,000 tons per annum (15 Ktpa) of lithium spodumene concentrate in phase one of production and 60 Ktpa of it in phase two, from Atlas’ Neves project, one of the properties in Brazil the Minas Gerais project encompasses.

Notable Catalyst on Horizon

The anticipated event that should really boost Atlas’ share price, Reagor purported, is the completion of a resource estimate and a financial study. He noted there have been delays in the company delivering it, and investors may be losing faith in Atlas despite the interest in it by the likes of Mitsui.

That said, noted Reagor, the delays have not hindered the start of production targeted for later this year, and they are likely due to Atlas wanting “to provide more robust results as compared to Street expectations.”

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Important Disclosures:

1. Atlas Lithium Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Atlas Lithium Corp.
3. Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
4. This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.

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Disclosures for Roth MKM, Atlas Lithium Corp., April 1, 2024

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