Lifezone Metals stock price target lowered to $7 at BTIG on project funding needs

Investing.com - BTIG lowered its price target on Lifezone Metals (NYSE:LZM) to $7.00 from $11.00 on Wednesday, while maintaining a Buy rating on the stock following the company’s recent equity raise. Currently trading at $4.02, Lifezone sits well below BTIG’s target but above the $2.90 Fair Value estimated by InvestingPro, suggesting the stock may be overvalued despite its 45% decline from its 52-week high of $7.29.

The mining company raised $15 million in equity earlier this week, which BTIG called "a necessary step" to advance the Kabanga Nickel Project toward a final investment decision (FID) expected by mid-2026. The equity raise included approximately 4.1 million warrants at a $4 strike price with a 4-year duration, potentially providing Lifezone with an additional $16 million. This financing comes at a critical time as the company’s short-term obligations exceed its liquid assets, with a concerning current ratio of just 0.32.

Lifezone continues to lead the Kabanga project following BHP’s (NYSE:BHP) exit this summer, working with the Tanzanian Government to move forward. The company plans to use the proceeds for pre-FID work including securing long lead time items, establishing power supply, obtaining remaining permits, and arranging project financing. With a market capitalization of $318.77 million, Lifezone operates with a moderate debt level, maintaining a debt-to-equity ratio of 0.34.

BTIG noted that management continues seeking new partners for the project, potentially including a major mining company to replace BHP’s role. The definitive feasibility study for the project was completed in July.

Despite current nickel market oversupply putting pressure on pricing and the near-term outlook, BTIG believes "the quality of the Kabanga resource should see it move toward FID in the medium term," supporting its maintained Buy rating on Lifezone Metals.

In other recent news, Lifezone Metals Limited announced a $15 million share offering. The company has priced an underwritten registered direct offering of 4,411,764 ordinary shares with accompanying warrants at $3.40 per unit. Each unit includes one ordinary share and a warrant to purchase an additional share at an exercise price of $4.00. The warrants will be exercisable for a period of four years. This development follows the company’s ongoing efforts to raise capital through public offerings. Investors may view this as a strategic move to strengthen the company’s financial position. The offering is a significant step for Lifezone Metals as it seeks to enhance its market presence.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.