Shares of workforce lodging services provider Target Hospitality Corp. (NASDAQ:TH) are trading higher on Tuesday.
The company has revealed a new multi-year partnership with Lithium Americas Corp. to deliver workforce housing and hospitality services in support of the Thacker Pass Project in Nevada and a North American critical minerals supply chain.
This major lithium development is co-owned by Lithium Americas and General Motors Co (NYSE:GM). The project is designed to assist in the production of essential raw materials for North America’s expanding battery industry.
The Thacker Pass Project, situated near Winnemucca, Nevada, is on track to become one of the globe’s largest lithium sources.
Backed by a $2.26 billion loan from the U.S. Department of Energy, the Thacker Pass Project is set to play a key role in strengthening the domestic lithium battery supply chain.
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Target Hospitality will construct and provide full turnkey support for the Workforce Hub, including premium culinary offerings, facilities management and support services.
Target Hospitality will oversee the development of the Workforce Hub, which is designed to house up to 2,000 individuals.
Initial occupancy is slated for mid-2025, with the entire project expected to be completed by the end of the year.
“We are excited to announce this partnership with Lithium Americas and support the critical development of a domestic lithium supply chain. This marks a significant milestone in Target’s commitment to strategic diversification, while simultaneously expanding our geographic presence,” said President and CEO Brad Archer.
The agreement has the potential to generate $140 million in total revenue, including $76 million in guaranteed minimum revenue throughout its duration. The company anticipates approximately $68 million of committed minimum revenue will be realized in 2025.
The new project aligns with Target Hospitality’s 2025 financial outlook, which anticipates total revenue of $385 million – $395 million (consensus $320.03 million) and adjusted EBITDA between $150 million – $160 million.
Price Action: TH shares are trading higher by 6.57% at $9.815 at the last check Tuesday.
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