Latest with Lithium Players – LIT, PLL

Lithium prices are trending lower with the benchmark price of Lithium Carbonate (99.5 per cent) spot trading around CNY 74500.00, which is significantly down from the level of CNY 175000.00 (high in December 2017), which in turn, marks a decline of more than 57 per cent.

The main factor which contributed towards the lithium plunge is the oversupplied market; however, despite an oversupply, lithium prices are expected to surge by the industry players over the battery boom. Over the predicted growth, many lithium players are still extensively engaged in the production of primary lithium and lithium-based chemicals for the battery industry.

Lithium Australia NL (ASX: LIT)

LIT, a lithium miner and explorer, is engaged in the Pilgangoora, Yilgarn Craton, Electra, and many other projects. The company is listed on the Australian Securities Exchange.

Latest Update:

In an announcement made public by the company on 25th June 2019, LIT mentioned that the company would commence resource drilling at the Youanmi prospect in Western Australia, where it recently discovered lithium pegmatite.

As per the company, the extensive lithium mineralisation at the prospect is pegmatite-hosted, and lepidolite dominants the lithium mineralisation, which LIT processes through its proprietary SiLeach® process to recover lithium and other by-products. The proprietary process could allow the company to compete with other players over the price. Moreover, it is among the most advanced hydrometallurgical processes of its type.

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LIT, which has dispatched the field crew, intends to commence drilling activities before the end of the current month. The drilling programme would undertake up to 3,000 metres in order to evaluate the resource potential and pegmatites geometry. The company further plans to take the samples from the upcoming drilling program for mineralisation characterisation and for metallurgical testing.

LIT would also undertake a drilling programme within the defined vanadium resource at the Youanmi prospect. As per the company, the vanadium drilling programme would be restricted to the higher-grade sections of the oxide resource.

The company believes the oxide resource sections to be amenable for direct leaching for vanadium sulphate production. The material could be directly used to develop vanadium flow batteries.

LIT would also use the samples from vanadium drilling programme for ore characterisation and metallurgical testing.

The drill targets of the company for the prospect are shown in the picture below:

Source: Company’s Report

Price and Performance:

Despite achievements in terms of mineralisation identification and many proprietary techniques, the share prices of the company are moving in a continuous downtrend. The fall in lithium price and slower growth in lithium chemical could be a possible reason for the fall.

The shares of the company plunged from the level of A$0.263 (high in November 2017) to the present low of A$0.060 (as on 1:00 PM AEST, 27 June 2019), which in turn, denotes a fall of more than 76 per cent.

LIT is currently trading at A$0.060, down by 3.23 per cent (as on 1:00 PM AEST, 27 June 2019) as compared to its previous close.

Return Metrics:

The continuous plunge in the share price reduced the return metrics, and the shares of the company delivered a negative return of 37.44 per cent in one year and a negative return of 33.45 per cent on a YTD basis.

Piedmont Lithium Ltd (ASX: PLL)

Piedmont Lithium Ltd is an ASX-listed lithium explorer and a mineral developer. The company announced on 25th June 2019 that it inched up the lithium resources of its wholly owned Piedmont Lithium Project in North Carolina, United States. The company increased its mineral resources for the second time.

The total resources of the prospect stand at 25.1 million tonnes with an average grade of 1.09 of lithium oxide, which would account for 764,000 tonnes of lithium carbonate equivalent. The upgrade inched up the project’s total mineral resources to 27.9 million tonnes with an average grade of 1.11 per cent lithium oxide, which in turn, marks an increase of 47 per cent. The Core property mineral resource estimate of 25.1 million tonnes marks a rise of 55 per cent.

The project-wide mineral resource estimate for the Piedmont Lithium Project is as:

Source: Company’s Profile

PLL further mentioned that 74 per cent of the Core Mineral Resource at the prospect is within 100m of surface and 23 per cent of the Core Mineral Resource are within further 50m from 100m resource.

Core Property Mineral Resource:

The Mineral Resource estimate for the Piedmont Lithium Project was prepared by CSA Global Pty Ltd, which acted as an independent consultant for the resource estimation as per JORC 2012 Code. As we mentioned above, the 74 per cent Mineral Resource of the prospect is within 100m, which adds the significant value to the resource.

The depth break-up of the Mineral Resources is as:

Source: Company’s Profile

Apart from the mineral resource estimation, CSA Global also identified a new exploration target for the company at the prospect. The exploration target now at the core property consists of 4.0-4.5 million tonnes with an average grade of 1.0-1.2 per cent lithium oxide, and the exploration target for the Central Property at the prospect consists 2.0-2.5 million tonnes with an average grade of 1.1-1.3 per cent lithium oxide.

The distribution of the core property and the central property across the Piedmont Lithium Project is as:

Source: Company’s Report

Drilling Status: The company drilled a total of 326 diamond core holes to date at the Core property, which accounted for 51,047m of drilling. The company undertook the drilling activity in four phases and combined the results of 307 drilled holes with historical 19 drill holes to reach the estimated levels of mineral resources.

As per the company, the mineralisation across the prospect is mainly attributed to spodumene mineralisation.

Price and Performance:

The shares of the company performed better than the shares of LIT. Post reducing in value from the level of A$0.255 (high in November 2017) to the level of A$0.091 (low in December 2018), which marked a decline of more than 64 per cent, the shares of the company surged.

Post hitting the level of A$0.091, the shares of the company took a U-turn and reached the level of A$0.185 (high in April 2019), a gain of more than 103 per cent, before the stock started to revolve around the present month high of A$0.170.

PLL is currently trading at A$0.165, down by 2.94% (as at 1:00 pm AEST, 27 June 2019).

Return Metrics:

The previous plunge in the share price reduced the return metrics, and the shares of the company delivered a negative return of 10.53 per cent in one year; however, the recent uprise improved the YTD returns, which stands at 84.78 per cent.


Disclaimer

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