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Mining
It seems a month can’t go by without a short seller putting the kibosh on a lithium stock.
Back in 2021 we had J Capital go toe to toe in a losing battle with geothermal lithium play Vulcan Energy (ASX:VUL), though the German lithium darling is flying far lower than it was before the vehicle of former Labor Party candidate Tim Murray tried to sink the boot in.
The whole thing eventually cost Murray an apology and a fair degree of face. Potentially more embarrassing was J’s call that it was LONG on Firefinch (ASX:FFX).
The company fell into trouble not long after at the Morila gold mine in Mali and while spin out Leo Lithium (ASX:LLL) continues to progress its previous stake at the Goulamina lithium mine it would be hard not to call that particular report a disaster.
Now US short seller Blue Orca Capital has emerged on the radar of ASX lithium investors with an attempted takedown of lithium brethren Piedmont (ASX:PLL) and Atlantic Lithium (ASX:A11).
To summarise, Blue Orca claims the Ewoyaa lithium project in Ghana, where Piedmont expects to be receiving spodumene concentrate for a Tennessee lithium plant from 2025, is unlikely to ratified.
It claims “tens of millions” of dollars (actually $730,000 plus a future production royalty) were paid to a company owned by the son of a prominent Ghanaian Asiedu Nketiah, known colloquially as General Mosquito, during the acquisition of the mine.
The accusations of “corruption” in the pick-up of the mineral rights have sent Piedmont, a roughly $1.7b US and ASX-listed company and Atlantic, a recent entrant into the All Ordinaries index, both into a trading halt to respond to the Blue Orca report.
Piedmont, was one of the winners of conditional funding from a major critical minerals grants program in the US last year, with the Biden Administration expected to tip US$141.7m into the US$600m Tennessee lithium hydroxide plant in McMinn County.
It is also a part owner and offtaker of Sayona Mining’s (ASX:SYA) North American Lithium project in Quebec, Canada, which produced first concentrate this week.
Queensland miners have stuttered through a difficult summer characterised by buckets of rainfall.
But the Gods have saved their biggest trick of the wet season for last, hammering northwest Queensland with 370mm of rainfall in just seven days.
It has seen copper miner 29Metals (ASX:29M) lose access to its Capricorn mine by road.
It has also led to conundrums dealing with water on site, which has to pass the muster of the Queensland Government’s environmental regulators.
That has led to a suspension of production and non-essential activities which could last as long as three to four weeks as the miner waits for the rain to die down and bring site water levels to below prescribed limits.
“However, with rainfall continuing today it is difficult to predict the likely duration of the suspension with complete confidence. Work is continuing to assess the impact and opportunities to mitigate the interruption to production,” the company informed the market.
“29Metals will continue to keep the market informed, including any impact to the Company’s 2023 guidance.”
29M, which also owns the Golden Grove zinc and copper mine in WA, reported a statutory loss of $47.2m in 2022, down from a $121m profit in 2021 on lower base metals prices and higher costs.
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