Now that the recent financing has been done-and-dusted, GMP has resumed research coverage of Neo Lithium Corp (CVE:NLC) with a ‘buy’ recommendation.
Having updated his financial model, GMP has increased its net asset value per share estimate from C$3.65 a share to C$3.85, which has prompted an increase in the target price to C$2.90 from C$2.75.
“We recently had an opportunity to visit the Tres Quebradas project in Argentina. Overall our visit served to reinforce our understanding of the Project and we believe management remains on track to complete its DFS [definitive feasibility study] in H2/18,” the broker said.
“There is currently one drill rig on site but three additional rigs are expected to be deployed shortly. NLC will be focused on conducting additional pump tests to better define the porosity of the brine. In addition, further drilling at depth (below 170m) will also be conducted as will additional drilling in the Alluvial Cones – which have not yet been tested,” the broker continued.
Additional seismic work will also be undertaken to better define the depth of the salar – a salt-encrusted depression that is often the basin of a dried-up lake.
GMP said it believes the Tres Quebradas project is one of the highest quality greenfield lithium brine projects in development.
Neo Lithium’s shares currently trade at C$1.97.