High Voltage: Has the lithium bubble burst or is this a buying opportunity?
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Our High Voltage column wraps all the news driving ASX stocks with exposure to lithium, cobalt, graphite, nickel, rare earths, manganese, magnesium, and vanadium.
After a huge collective performance in 2021, the froth has been blown off lithium stocks this year.
The small cap contingent isn’t doing any better.
Is the general malaise affecting markets to blame? Has the lithium bubble burst … or is this a buying opportunity?
This is a buying opportunity, says Niv Dagan, founder and exec director at Peak Asset Management.
“From a Peak Asset Management view, we feel that investors should be using this opportunity to add to their lithium exposure,” he told Stockhead.
“Following production cuts, the lithium supply glut has ended, and the market is now tightening, as the EV revolution accelerates.
“This is also well supported by the global commitment to decarbonisation.
“More recently Macquarie Bank advised clients that the lithium market is emerging faster than expected on the back of stationary energy storage systems and they encouraged ‘material upgrades to forecast demand for lithium over the short and medium term’.
“Credit Suisse echoed Macquarie’s buoyant lithium analysis, advising clients that it would be “brave to resist lithium momentum”.”
Here’s how a basket of ASX stocks with exposure to lithium, cobalt, graphite, nickel, rare earths, magnesium, manganese, and vanadium are performing>>>
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Major shareholder Christopher Wallin has launched an all-cash takeover bid for gold-manganese explorer Carawine Resources (ASX:CWX) which values the explorer at 21c per share — a 27.27% premium to the last trading price.
Wallin was the #41 richest person is Australia in 2020 (according to Forbes) with an estimated net wealth of about ~$910 million.
He is probs worth a lot more now, as coal prices are surging and he makes his money through private company QCoal Group, which has developed several coal mines in Queensland’s Bowen Basin.
These mines produce 10 million tonnes of coking and thermal coal which is exported through the Abbot Point Coal Terminal each year.
Wallin’s offer is unconditional and will remain open until 22 April 2022, unless extended or withdrawn. CWX will provide a recommendation on the bid to shareholders in due course – until then they should “TAKE NO ACTION”, it says.
The Horseshoe pegmatite, part of the Western pegmatite trend, returned rock chip assays of up to 4.50% Li2O with an average assay of 3.1% Li2O. Ore grade is usually around 1%.
“We now have a great opportunity to progress two lithium plays only a few km apart in this incredibly prospective area with an operating lithium processing plant only 12km away,” CEO Mark Csar says.
Up on no news was minnow Metals Australia (ASX:MLS), which kicked off a 3,5000m RC drilling program at its Manindi lithium project in WA mid last week.
The program is expected to take 2-3 weeks to complete, and will target the entire 500m strike length of the recently discovered Foundation Pegmatite.
Chairman Mike Scivolo says that historical drill intersections and mapping at Manindi has identified multiple LCT pegmatites, “highlighting the large-scale potential for high-grade lithium deposits.”
Testing is also planned for nearby pegmatites, Dibbler, Quoll and Bandicoot, where lithium minerals have been identified in rockchip sampling.
$1bn market cap cobalt miner/project developer Jervois Global (ASX:JRV) is on track for first cobalt and copper concentrate production from its ‘Idaho Cobalt Operations’ in Q3 2022.
Its Finland operations also pulled in revenues of $US96m (adjusted profits of $US3.9m) in the December quarter.
Gaining on no news this week, JRV will be a direct beneficiary of higher cobalt prices, which recently hit a three-year high.