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Lithium Co. Expects First Revenues This Year
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Given its plan for a Q4/24 production start, a mineral resource update and definitive feasibility study are expected soon, noted an H.C. Wainwright & Co. report.

Atlas Lithium Corp. (ATLX:NASDAQ) announced that Mitsui committed to a US$30 million ($30M) strategic investment in and an offtake agreement with the U.S. battery metals firm, as it targets a Q4/24 production start at its Neves project in Brazil, reported Heiko Ihle, H.C. Wainwright & Co. analyst, in an April 1 research note.

"Importantly, the backing provides Atlas Lithium with immediate liquidity necessary for rapid development toward revenue generation following the production and sale of high-quality, low-cost, environmentally sustainable lithium concentrate," Ihle wrote. "Looking ahead, we believe the investment and offtake agreement should yield an ongoing partnership between Mitsui and Atlas."

135% Gain Implied

H.C. Wainwright made several changes to its model on Atlas, which led to a reduction in target price to US$40 per share from US$52, noted Ihle. Currently, the lithium company is trading at about US$17.02 per share.

With the revised target price, the potential return for investors is 135%.

Atlas remains a Buy.

Provides Immediate Liquidity

Atlas announced its deal with Mitsui on March 28. Under the terms of the agreement, Ihle explained that Mitsui will purchase $30M worth of Atlas common shares at a 10% premium to the lithium company's five-day volume-weighted average price.

Also, Mitsui will purchase lithium concentrate for five years from future output at Neves, once production there commences. Mitsui will buy 15,000 tons per annum (15 Ktpa) of the product in phase one of production and 60 Ktpa in phase two.

"The firm is likely to receive increased interest for its phase two output of lithium concentrate following the investment and offtake agreement with Mitsui," commented Ihle.

Strong Cash Balance

Ihle summarized the key points of Atlas' 2023 financial results, noting that H.C. Wainwright considers them "as mostly irrelevant to our assessment of Atlas as the company has been steadily progressing its site to production."

During 2023, the mineral explorer did not generate any revenue and incurred a net loss of US$42.6M, or ($4.11) per share. The prior year, Atlas garnered US$6.8M in revenue and posted a net loss of US$5.7M, or ($1) per share.

Ihle attributes the difference in net loss to spending on two types of expenses: general and administrative (G&A) and exploration. Specifically, in 2023 Atlas spent US$10.3M on G&A and US$16.6M on exploration versus US$2.7M and US$0 in 2022, respectively.

The company ended 2023 well-capitalized, according to Ihle, with $29.5M in cash.

Lots To Watch For

The next 12 months for Atlas should be filled with catalysts, Ihle highlighted.

The next anticipated potential stock-moving events are the release of a maiden resource estimate and a definitive feasibility study (DFS), expected in Q2/24.

"We expect the DFS to offer increased clarity of the economic potential for the site," Ihle noted.

Completion of the processing plant also should happen in the near term, likely in Q2/24 as well.

In Q4/24, Atlas is expected to start production at Neves and concurrently begin generating revenue, according to management.

Finally, additional strategic investments in Atlas, which could happen at any time, could boost its stock price.

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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 H.C. Wainwright & Co., Atlas Lithium Corp., April 1, 2024

This material is confidential and intended for use by Institutional Accounts as defined in FINRA Rule 4512(c). It may also be privileged or otherwise protected by work product immunity or other legal rules. If you have received it by mistake, please let us know by e-mail reply to [email protected] and delete it from your system; you may not copy this message or disclose its contents to anyone. The integrity and security of this message cannot be guaranteed on the Internet. H.C. WAINWRIGHT & CO, LLC RATING SYSTEM: H.C. Wainwright employs a three tier rating system for evaluating both the potential return and risk associated with owning common equity shares of rated firms. The expected return of any given equity is measured on a RELATIVE basis of other companies in the same sector. The price objective is calculated to estimate the potential movements in price that a given equity could reach provided certain targets are met over a defined time horizon. Price objectives are subject to external factors including industry events and market volatility.

H.C. Wainwright & Co, LLC (the “Firm”) is a member of FINRA and SIPC and a registered U.S. Broker-Dealer. I, Heiko F. Ihle, CFA , certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies. None of the research analysts or the research analyst’s household has a financial interest in the securities of Atlas Lithium Corporation (including, without limitation, any option, right, warrant, future, long or short position). As of February 29, 2024 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Atlas Lithium Corporation. Neither the research analyst nor the Firm knows or has reason to know of any other material conflict of interest at the time of publication of this research report.

The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services. The firm or its affiliates received compensation from Atlas Lithium Corporation for non-investment banking services in the previous 12 months. The Firm or its affiliates did not receive compensation from Atlas Lithium Corporation for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report. The Firm does not make a market in Atlas Lithium Corporation as of the date of this research report.

The securities of the company discussed in this report may be unsuitable for investors depending on their specific investment objectives and financial position. Past performance is no guarantee of future results. This report is offered for informational purposes only, and does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such would be prohibited. This research report is not intended to provide tax advice or to be used to provide tax advice to any person. Electronic versions of H.C. Wainwright & Co., LLC research reports are made available to all clients simultaneously. No part of this report may be reproduced in any form without the expressed permission of H.C. Wainwright & Co., LLC. Additional information available upon request. H.C. Wainwright & Co., LLC does not provide individually tailored investment advice in research reports. This research report is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation and the particular needs of any specific person. Investors should seek financial advice regarding the appropriateness of investing in financial instruments and implementing investment strategies discussed or recommended in this research report. H.C. Wainwright & Co., LLC’s and its affiliates’ salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies that reflect opinions that are contrary to the opinions expressed in this research report. H.C. Wainwright & Co., LLC and its affiliates, officers, directors, and employees, excluding its analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives (including options and warrants) thereof of covered companies referred to in this research report. The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data on the company, industry or security discussed in the report. All opinions and estimates included in this report constitute the analyst’s judgment as of the date of this report and are subject to change without notice. Securities and other financial instruments discussed in this research report: may lose value; are not insured by the Federal Deposit Insurance Corporation; and are subject to investment risks, including possible loss of the principal amount invested.

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