High Voltage: Lithium heating up, in a good way

Each week our High Voltage column wraps all the news driving ASX battery metals stocks with exposure to lithium, cobalt, graphite, manganese and vanadium.
 

INDUSTRY FOCUS

After $40b conglomerate Wesfarmers (ASX:WES) made a $776m play for Kidman Resources (ASX:KDR), everyone’s attention turned to the next possible target.

What’s interesting about the Kidman offer, says David Gillam of mining industry consultancy Mastermines, is that it didn’t come from a downstream processor, battery manufacturer or EV brand.

“Those groups may now need to compete with larger entities simply looking for future new energy involvement [like Wesfarmers],” he told Stockhead.

Scroll down for the recent performance of ~200 ASX battery metal stocks >>

Either way, the $776m Wesfarmers offer has given the sector more mainstream credibility, says Alliance (ASX:A40) boss Mark Calderwood.

“The market here didn’t seem to appreciate it when [lithium producer] Albemarle paid $1.6 billion for half of Wodgina, but as soon as a group like Wesfarmers jumps in people’s ears prick up,” he says.

Acquirers may have to pay a stronger premium in a more positive market.

“A month ago, people were down in the dumps about lithium stocks and could’ve been easy pickings,” Calderwood says.

“At the moment they’d probably be a bit harder to pick off.”

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SMALL CAP SPOTLIGHT

Of the companies on our list, 77 lost ground, 66 were ahead and 48 were steady this week.

Once again, lithium plays dominated the winners column. Check this out:

Liontown Resources (ASX:LTR) holds aloft the gold medal for a second week running. The lithium play was up 78 per cent last week, which means investors are now enjoying a 12 month return of 139 per cent.

Liontown keeps finding thick zones of high grade lithium outside the current resource  at its Kathleen Valley lithium-tantalum project in WA.

The latest round of drilling results, which includes 18m at 1.6 per cent Li2O from 189m, could substantially increase the current mineral resource estimate, the company says.

Sometimes it’s all about location. Traka Resources (ASX:TKL) is in a joint venture with lithium producer Galaxy Resources at Mt Cattlin North, about 2km from the Mt Cattlin lithium mine.

Last week, Traka announced that Galaxy would be testing a new lithium bearing pegmatite target which straddles Galaxy’s tenements and those held in joint venture with Traka.

The market loved the news, sending the explorer up 36 per cent for the week.

Graphite focused Metals Australia (ASX:MLS) and Black Rock Mining (ASX:BKT) were both up 33 per cent for the week; Black Rock on news that it has locked in pricing agreements with offtake partners which it says “is consistent with DFS basket pricing”.

Here’s a table of ASX battery metal stocks with exposure to lithium, cobalt, graphite, manganese and vanadium>>>

Scroll or swipe to reveal table. Click headings to sort. Best viewed on a laptop