January’s Top 50 Stocks: ASX lithium players strike the right note with investors
In January, ASX investors threw considerable amounts of cash at the nascent lithium-ion supply chain.
Seven of the top 10 performing ASX stocks were lithium explorers.
21 of the top 50 companies were involved in critical minerals, battery raw materials, or the batteries themselves.
That how dominant the sector was.
Why the feeding frenzy?
A highly charged, highly speculative trading environment coupled with a very positive outlook for electric vehicles.
Lithium prices are seeing their first sustained rise in three years as automakers and cell manufacturers react to the strong upward trend in EV sales.
And there are signs demand for battery grade graphite could outstrip supply in 2021.
It looks like Battery Metals Boom 2.0 is officially on.
HERE’S THE TOP 50 SMALL CAPS FOR THE MONTH OF JANUARY >>>
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Last month’s top mover.
Early stage testing at Hawkstone’s Big Sandy project in the US – now a very clean energy-friendly jurisdiction — has recovered 90 per cent lithium from ore. Which is pretty good.
Hawkstone says test-work partner Hazen Research is on track to produce battery-grade Li2CO3 (99.5 per cent lithium carbonate) by the end of February 2021.
SAYONA MINING (ASX:SYA) +423%
US based project developer Piedmont Lithium (ASX:PLL) caught a rocket in September after announcing a deal to supply Tesla with a big chunk of its planned spodumene production for an initial five years.
Fellow US lithium explorer Sayona flew when project developer Piedmont Lithium (ASX:PLL) became a strategic investor and major offtake partner.
Piedmont will ink a +60,000tpa offtake deal based on market pricing (minimum US$500/t, maximum US$900/t).
It will also buy 19.9 per cent in Sayona for ~$15m .
The cash will help advance Sayona’s flagship Authier project, the emerging Tansim project, and a proposed bid for troubled lithium mine North American Lithium.
BPH ENERGY (ASX:BPH) +400%
There was no real newsflow to explain BPH’s meteoric month.
In response to an ASX price query, the holding company with investments in energy, resources and biotech said an Baleen oil and gas well drilling permit could be in the mail.
It also noted current press coverage of significant funding incentives for carbon capture and storage (CCS) technology.
“This focus on CCS and geosequestration has highlighted the additional objective of the Baleen Well drilling,” it says.
“BPH has previously announced the Baleen well program offers potential environmental benefits in carbon capture and storage (carbon reduction) for the greater Sydney/Newcastle area.”
LAKE RESOURCES (ASX:LKE) +347%
This lithium explorer just raised $20.6m from overseas institutional investors at a 12 per cent premium to its 10-day volume weighted average share price (VWAP).
Lake’s flagship Kachi lithium brine project is now fully funded through to the construction phase in 2022, it says.
“This transaction places the company in its strongest financial position ever,” managing director Steve Promnitz says.
“Lake will hold in excess of A$25 million following this placement and anticipates a further $6m to be added by July as existing options convert.”
Strategic Elements is now up 700 per cent in four months.
This small cap stock dabbles in a bit of everything: self-charging batteries, mineral exploration, AI, robotics and drones, and something called ‘nanocube memory ink’ which “mimics the human brain”.
In January, SOR made headway with its self-charging battery tech, which supposedly generates power from humidity in the air.
The result could be a battery which is less costly and doesn’t need to be recharged, it says.
CORE LITHIUM (ASX:CXO) +306%
The Aussie-based lithium stock says its largest shareholder has signed a binding five-year deal to supply EV maker Tesla with 75,000 tonnes per annum of lithium spodumene concentrate.
Meanwhile, Core says it is the most advanced new Australian lithium developer on the ASX, as lithium prices in China increase from 2020 lows and global EV sales ramp up.
“There are very few advanced Australian lithium projects for investors to build exposure to increasing lithium prices,” it says.
“Core has further advised the market, on an ongoing basis, that the company is receiving interest from new lithium parties for additional binding offtake and customer project finance agreements for the Finniss Lithium Project.”
The US lithium hopeful is testing the performance of its Paradox Basin Brine project lithium in actual batteries. Results will be used to advance discussions with prospective off-take partners, it says.
Offtake, or making long-dated deals to sell product, help a company attract the finance required to build a project.
Anson will use ASX listed battery tester Novonix (ASX:NVX), and anticipates
testing to take 4-5 months beginning early February.
VULCAN ENERGY (ASX:VUL) +215%
This geothermal lithium play is now up +4000 per cent over the past year.
According to a recent study, Phase 1 of its Zero Carbon lithium project in Germany will cost about $1.09 billion to build.
That would take just five years to pay back, as Phase 1 is expected to have the low operating costs of ~$US3,816.30/t of lithium hydroxide.
Phase 2 is even cheaper.
Hydroxide in a still-subdued market currently sells for between $US7,950 and $US10,150 per tonne, according to Benchmark Mineral Intelligence.
Vulcan could do no wrong in the eyes of investors, until it argued – in response to an AFR article — “that it is not conducting a capital raise at this point in time”.
It launched a $100m cap raise five days later.