ROTH Capital 60 cents target for LKE

ROTH Capital initiated coverage of LKE with a buy rating, and a target share price of 60 cents.

The report can be found here:
https://lakeresources.com.au/wp-content/uploads/2021/02/lake_cleaner_lithium_2021_02_17_roth_capital.pdf

Some excerpt from the report:

"LKE: A Purer, Cleaner Lithium; Initiate withBuy
We are initiating coverage of LKE.AX with a Buy rating and AUD$0.60 pricetarget. We believe that LKE is on the cusp of developing its Kachi projectand that the company's assets should trade at a premium due to the lowenvironmental impact of its process. Additionally, we believe there is significantupside for the company through exploration at its other assets.
A cleaner lithium production process.
We believe that as demand for EVsincreases it is likely consumers will become focused on the entire supplychain of the car they are purchasing. We believe EV manufacturers seethis demographic shift on the horizon and have begun to look to invest inlithium production from sources that have the lowest environmental impact. Webelieve this will lead to significantly higher valuations for lithium companies thateither have a low-impact production process or that are located in first worldcountries that require higher environmental standards. We also believe thatthe process Lake Resources is planning to use at Kachi has one of the lowestenvironmental impacts possible based on currently available technologies. Wediscuss this in further detail later in this report.ESG investors likely to assign a premium. Given our view that LKE'sprocess has a low environmental impact, we believe it should trade at apremium to conventional brine projects. Our initial valuation of the companyis based on the company's PFS. Normally at PFS-stage, we would assign avaluation of 30-50% of after-tax NPV, but in the case of LKE we have electedto assign a valuation of 60% because of our anticipation of a market premium.
Lithium prices on the move. On the industry front, lithium prices have begunto rebound as the temporary surplus of lithium supply seen in 2019 and 2020appears to be diminishing. We remain bullish in the medium-to-long-term onlithium prices as demand for lithium for EVs appears on track to significantlyoutpace lithium supply growth over the next five years. We provide an updateon the lithium market in our section titled "Lithium Market Update and Outlook"later in this report."