Lithium stocks on the up as Black Mountain joins the party; shares quadruple
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Lithium wannabe Black Mountain Resources (ASX:BMZ) quadrupled in price on Thursday after the tiny phosphate producer announced it was heading to the Congo to explore for the popular battery metal.
The announcement came on a busy day in the lithium space as Kazakhstan Potash Corp (ASX:KPC) said it was doing exactly the same — prompting a 30 per cent jump in its shares.
Separately, Tawana Resources (ASX:TAW) agreed to a tie-up with Singapore-listed Alliance Mineral Assets to create a new pure-play mid-tier lithium company.
Black Mountain’s spectacular share price gain — it gained 206 per cent after briefly quadrupling — came after news it had picked up an option for a project near AVZ Minerals’ (ASX:AVZ) massive Manono lithium project in the Democratic Republic of the Congo.
AVZ — lead by battery metals talisman Klaus Eckhof — has enjoyed a 780 per cent rise in its shares over the past year.
Scroll down for a list of the ASX’s best-performing lithium stocks.
Black Mountain today told investors the permits lie within the same geological and structural setting as the AVZ Manono project – potentially one of the world’s largest lithium-rich lithium, caesium and tantalum deposits.
The project is in the south-east of the Manono province.
At one point on Thursday Black Mountain shares quadrupled from Wednesday’s close of 1.6c to a 52-week high of 6.3c.
They finished today at 4.9c. Even so the company — which has been dealing with debt problems — was valued at just $2.6 million.
Black Mountain is undertaking due diligence on the project, in which it can earn up to a 60 per cent stake. The farm-in terms are still being negotiated.
Kazakhstan Potash Corp (ASX:KPC) is also picking up a lithium project in the DRC, news that sent shares up over 31 per cent to 4.2c.
The company inked a deal to acquire a 51 per cent interest in the Malemba project, which covers five prospective licences over a 730 sq km area in the north-east of the country.
The Malemba project is located about 90km south-west of AVZ’s Manono project.
In late March, Kazakhstan Potash Corp struck a deal to acquire a 60 per cent stake in DRC-registered Société MCC Resource SARL, which owns a prospecting license covering 88 sq km in the Manono region.
Meanwhile, Tawana Resources (ASX:TAW) plans to merge with Alliance Mineral Assets – its partner in the Bald Hill lithium project in the Eastern Goldfields region of Western Australia, which recently started production.
The merged group will be listed on both the ASX and SGX and is expected to have a market cap of $446 million.
While Tawana’s share price closed Thursday unchanged at 45.5c, it has gained around 86 per cent in the past year as investor interest in lithium continues to pick up.
The company revealed in March that it would spin out its other West Australian lithium projects and its iron ore project in Liberia into a new company.
Tawana is raising $20 million via a fully underwritten placement, while Alliance is undertaking a separate fully underwritten placement to raise $25 million and a non-underwritten placement to raise up to a further $7.8 million.
Top ASX lithium performers
Lithium continues to remain popular with investors. Over half the 50 or so ASX-listed lithium players tracked by Stockhead (see table below) have made gains in the past 12 months.
AVZ has been the market darling, with its share price up nearly 780 per cent compared to a year ago.
Argosy Minerals (ASX:AGY) has also enjoyed substantial gains – its share price is up 567 per cent.
The company announced earlier this week that the stage one pilot plant at its Rincon lithium project in Argentina is now operational.
This list shows how ASX stocks with lithium exposure have fared over the past year. (Scroll to reveal full list):
Trade war could hurt EV demand
Lithium has gained favour with investors because of its use in the rechargeable batteries needed to power electronics and electric vehicles (EVs).
While demand for EVs is tipped to grow substantially, an emerging trade war between the US and China could upset Tesla’s plans to grow its share of the EV market.
China has announced it plans to place tariffs of 25 per cent on $US50 billion worth of imported American goods, including EVs.