Resources Top 5: Tesla and EV-linked lithium and battery stocks pull ahead
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Here are your top ASX small cap resources winners in morning trade Wednesday, January 27.
Investors showed their enthusiasm for Galan Lithium’s Greenbushes South and Hombre Muerto West (HMW) lithium projects Wednesday by bidding its share price higher.
A successful $10m share placement was massively oversubscribed having attracted firm commitments from institutional and sophisticated investors.
Luxembourg-based green energy fund Thematica Future Mobility emerged as a major supporter of the capital raising, with a $4m investment.
“We see great opportunities in Galan especially on the back of positive results from the preliminary economic assessment [for HMW], with high grade, low impurities and a considerable resource size,” said a spokesperson for Thematica, adding the fund will support Galan on its way to become a low-cost lithium producer.
Thematica Future Mobility seeks exposure globally to companies that stand to benefit from the transition to clean and sustainable transport and energy solutions.
Funds from the $10m of fresh capital will go towards developing the company’s Hombre Muerto West project and an exploration program for its Greenbushes South project.
Hombre Muerto West is located in Argentina’s ‘Lithium Triangle’ that is host to other companies such as Galaxy Resources’ (ASX:GXY) and Korean company Posco’s Sal de Vida project.
The company’s Greenbushes project is 15km south of WA’s Greenbushes lithium mine.
Another lithium exploration company with projects in Argentina’s Lithium Triangle, Lake soared by more than 50 per cent following its December quarter update.
The explorer is rapidly moving toward a definitive pre-feasibility study for its Kachi lithium project for 99.87 per cent battery quality lithium carbonate.
The high quality product is to be extracted from Lake’s Kachi brines and processed into lithium-ion battery test cells by Australian battery company Novonix (ASX:NVX).
The company will use efficient, low cost direct extraction technology from its technology partner, California-based Lilac Solutions.
High purity lithium of the kind produced by Lake attracts premium pricing, and the DFS for Kachi is based on a fixed selling price of $US11,000 per tonne.
A pre-feasibility study for Kachi showed the project could return a post-tax net present value of $US748m ($1.18bn), and $US155m of earnings before tax and interest in its first year of operation.
After attracting the attention of Tesla raw materials supplier Piedmont Lithium (ASX:PLL), Sayona has announced a $C2m ($2.03m) drilling program for its Quebec lithium project.
Approximately 8,700m of drilling is planned for its flagship Authier lithium project and Tansim lithium project in Canada to expand their current lithium resources.
“This is a significant investment in our Tansim project and a substantial boost to Authier’s profitability as we work to deliver a world-scale lithium hub at Abitibi, supported by multiple projects,” managing director, Brett Lynch, said.
“Lithium demand is soaring in Canada and the United States, as seen by the multi-billion dollar investments by automakers in EV production in Ontario, Tesla’s increasing offtake demand and the Biden administration’s clean energy drive, such as its ‘Buy American’ EV campaign,” he added.
Sayona Mining has a strategic partnership with its 19.9 per cent shareholder Piedmont Lithium which last year won a contract to supply US lithium to EV maker Tesla.
The gold explorer announced high-grade assay results from a new quartz zone discovery at its New Orient mining lease acquired in October.
One drill hit at the New Orient lease in the company’s Island gold project in WA returned 3m at 32.96 grams per tonne (g/t) gold from 129m, including 1m at 68.25 g/t gold from 130m.
The quartz zone is thought to represent an offset of known mineralisation as it was intersected shallower and further west than anticipated.
“Since the acquisition of the Island gold project, our approach to exploration has been very systematic to enable us to build our knowledge of the asset,” executive director, Scott Patrizi said.
Caprice Resources is to continue in February with a new 4,000m drilling program for its project to further extend known gold exploration targets after an initial program started in November.
The explorer’s Island gold project in the Cue goldfield comprises two mining leases, and one exploration licence covering the New Orient, The Island and North Island properties.
Caprice Resources also has a poly-metallic project, Northampton in WA, that surrounds historical lead and silver and copper mines, and its Wild Horse Hill gold project in the Northern Territory.
The battery anode hopeful announced a 10-year supply deal with a Chinese customer for its purified spherical graphite (PSG) product.
Leading Chinese battery anode company Jiangxi Zhengtuo New Energy Technology Company (Zeto) plans to purchase 10,000 tonnes per year of Renascor Resources’ PSG product.
The supply deal represents around one-third of the company’s PSG production, and Zeto is to expand its current 30,000 tonnes per year production to 50,000 tpy by 2022.
Zero is a supplier of anodes to battery makers including Hong Kong-listed BYD, the world’s second largest manufacturer of EVs with a market value of $US100bn.
Following a similar supply deal with Minguang New Material, Renascor Resources has supply deals for two-thirds of its planned PSG production.
“China continues to dominate anode production globally, with production capacity of more than 600,000 tonnes per year, and this makes China the largest PSG consumer in the world,” managing director, David Christensen, said.
“The demand for EV batteries continues to underpin growing demand for PSG,” he added.
Renascor Resources’ Siviour battery anode material project in South Australia has the second largest reported proven reserve of graphite globally, and the largest outside of Africa.
Graphite concentrates are starting to become a battery mineral and demand for graphite batteries is growing at a rate of 29 per cent per year, said the company.
Purified spherical graphite has application in lithium-ion batteries and provides a direct exposure to the expanding EV sector.