Fosters has labelled copper, gold and rare earth element explorer and developer Kidman Resources Ltd as a buy after Kidman announced its first binding blue chip offtake agreement for its Mt Holland Lithium project with US EV carmaker Tesla Inc.
The agreement with Tesla is for the supply of lithium hydroxide from its downstream refinery in Kwinana – operated by Western Australia Lithium – with a three-year fixed price take-or-pay which will protect both Kidman and Tesla from falls or rises in lithium prices.
The interest from the brand name of Tesla has led to Kidman entering discussions with other parties for the balance of its refinery offtake which may result in similar agreements being made with other companies that could prove lucrative for Kidman.
Fosters has a $2.78 price target on the stock – an upgrade from $2.72 – with Kidman shares sitting at $2.23 when the market closed on Friday.
KDR Price at posting:
$2.20 Sentiment: Hold Disclosure: Held
