We recently compiled a list of the 10 Best Mining Penny Stocks to Buy Now. In this article, we are going to take a look at where Lithium Americas Corp. (NYSE:LAC) stands against the other mining penny stocks.
The global demand for essential metals and materials has been on the rise, helping the mining industry expand. The global mineral market is forecasted to grow at a compound annual growth rate (CAGR) of 6.2%, as per The Business Research Company. The market is forecasted to grow to $3 trillion by 2029, driven by infrastructure upgradation, foreign direct investment (FDI), and automation. Capital inflows to mining projects are potentially growing due to government incentives and technological advancements.
As the metals and mining industry mitigates earnings pressure, it remains financially stable due to flexible shareholder returns and lower debt levels. On one end, due to increasing costs, gold has crossed the $2,000 per ounce mark, and metallurgical coal has surpassed $200 per ton, according to a report by S&P Global. Moreover, as North American producers of steel look to rationalize capacity, Chinese exports have seen an increase regardless of decreasing output.
On the other hand, lithium miners are facing price headwinds, whereas aluminum demand remains stable due to the demand from the transportation and packaging industries. Although M&A remained controlled within the industry, steelmakers were able to continue acquisitions, while miners, on the other hand, are putting efforts toward efficiency and cost-cutting, as technology and capital requirements shape profitability.
Key metals have seen strong price movements in 2025, which reflect the sector’s bullish outlook. Accordingly, gold and silver demand has risen as safe-haven assets due to economic uncertainty. Gold futures have seen a 38.63% increase, year-on-year, as of writing this article, while silver futures recorded an increase of 37.63%. Furthermore, Gold ETFs have seen a record gain of 26% in 2024 since 2010. Due to inflationary pressures and global trade tensions, as well as President Donald Trump’s tariffs, this pattern is expected to continue, fueling investor demand for metals.
On the other hand, industrial metals are also witnessing a growing demand. Lithium demand is expected to reach $9.01 billion by 2025, up from $7.75 billion in 2024, largely due to its use in battery production. As reported in one of the previous Insider Monkey articles, 80% of mined lithium goes toward the production of batteries, which is expected to grow to 95% by 2030. Furthermore, copper demand remains stable, with the market valued at $176.88 billion in 2024, bolstered by China and India’s infrastructure projects. Similarly, according to Zinc.org, Zinc demand is also rising in the renewable energy sector, with consumption of 568,000 tons expected by the solar industry by 2030.
Thus, the mining industry is revolutionizing due to technological advancements, bolstering efficiency and lowering costs. Mine development time has been brought down to nine years from 16, driven by AI and advanced analytics. Likewise, the time to perform geophysical data analysis has been reduced to mere weeks from two years. Furthermore, according to KPMG Mining Outlook 2024, core sample evaluations now take 12 minutes, compared to 45 days previously. Moreover, innovations have helped enhance sustainability for metal recycling. Accordingly, new methods now achieve a 95% recovery rate from steel mill waste, transforming waste into reusable materials used in construction and manufacturing.
However, the industry faces challenges in terms of geopolitical instabilities and changing trade policies. The U.S.-China tariff dispute, including potential policies against American goods, can potentially disrupt the global supply chains, especially those of critical minerals. Moreover, market volatility is still a risk as China holds around 90% of global rare earth refining capacity.
Nevertheless, the mining industry looks toward long-term growth, driven by strong demand for major metals, infrastructure development, and cost-cutting through automation.
Methodology
To curate our list of the 10 Best Mining Penny Stocks to Buy Now, we looked into ETFs, and a stock screener to come up with several top mining stocks trading below $5, as of the time of writing this article. Out of this list, 10 stocks were shortlisted based on their popularity among top hedge funds and positive outlook from analysts. Accordingly, the stocks are ranked in ascending order based on the number of hedge funds holding stakes in the respective stocks, as of Q4 2024. The data for hedge funds was extracted from Insider Monkey’s database, which tracks over 1000 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
An aerial view of the vast Lihtium deposits in the Jujuy province of Argentina.
Lithium Americas Corp. (NYSE:LAC)
Number of Hedge Fund Holders: 10
Share Price as of the close of March 7: $3.09
Lithium Americas Corp. (NYSE:LAC) has a focus on lithium exploration and development, which is mainly made possible by their 100% stake in the Thacker Pass project in Nevada. The Cauchari-Olaroz lithium brine project in Argentina is also operated by the company under a joint venture with Ganfeng Lithium.
Looking at its financials, Lithium Americas Corp. (NYSE:LAC) reported an increase of 21% in its lithium carbonate production at Cauchari-Olaroz in Q3 ended September 30, 2024, reaching around 6,800 tons. The plant is expected to produce between 20,000 and 25,000 tons for the full year, operating at 75% to 80% of its full capacity currently. While the company was able to reduce its processing costs for battery-quality lithium carbonate to $1,500 from $2,000 per ton, realized lithium prices decreased to around $7,000 per ton, adding pressure to the margins.
Moreover, Lithium Americas Corp. (NYSE:LAC) was able to secure a loan of $2.26 billion from the U.S. Department of Energy’s Loan Programs Office in Q4 2024 to finance Phase 1 construction at Thacker Pass. This loan is to achieve the target production of 40,000 tons of battery-grade lithium carbonate annually. The engineering phase is approximately 40% complete, while major long-lead equipment is being sourced.
Furthermore, Lithium Americas Corp. (NYSE:LAC) finalized a joint venture worth $625 million with General Motors, which has a stake of 38% in the project. Construction is moving forward, including safety improvements, housing facilities for the workforce, and essential infrastructure such as water supply systems and road upgrades.
In addition to making strategic alliances, Lithium Americas Corp. (NYSE:LAC) increased its lithium carbonate equivalent (LCE) resources by 277%, now at 44.5 million metric tons, cementing its potential for long-term growth. The analysts’ price target is set at $8.50, which bolsters confidence in the company’s resource expansion and development plans. Thus, LAC is among the best penny stocks to buy now.
Overall LAC ranks 10th on our list of the best mining penny stocks to buy now. While we acknowledge the potential of LAC as an investment, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than LAC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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