SYA, CXO, PLS: How are these top ASX lithium stocks faring in August?

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Highlights

  • Lithium prices are rising due to the increase demand of electric vehicles (EVs).
  • The number of Australians purchasing EVs jumped three-fold in 2021.
  • Lithium exports from Australia increased by AU$2,318 million (737%) from the June quarter of 2021 to AU$2,632 million for the June quarter of 2022.

Australia is the largest exporter of Lithium in the world and Lithium exports from Australia is expected to generate AU$9.4 billion in revenue for the country’s economy by 2023-24.

Spodumene concentrate, the most frequently used source of lithium minerals, is predominantly extracted from pegmatite in lithium mines across Australia. Spodumene is processed further to get either lithium carbonate or lithium hydroxide, which are the chosen materials for batteries used in EVs.

Lithium from Australia is typically exported as spodumene concentrate, but the rising demand for this precious metal has now forced several Australian lithium to produce lithium hydroxide.

Lithium exports from Australia increased by AU$2,318 million (737%) from the June quarter of 2021 to AU$2,632 million for the June quarter of 2022. Since January 2021, Western Australia has contributed more than 99% of all Australian lithium exports on a monthly basis.

Lithium worth AU$1,128 million was exported from Australia to China in June 2022, making up 97% of all lithium exports during that month.

It is to be noted that lithium hydroxide is a vital component of the batteries used in electric vehicles (EVs). Lithium hydroxide is essential to create portable, rechargeable power in batteries and it is considered an ideal product because it offers the finest energy balance.

There is no denying the fact that the demand for EVs is increasing with each passing day across the world. Even in Australia, the number of Australians purchasing electric vehicles tripled last year. According a report by Electric Vehicle Council, a total of 20,665 EVs were sold in Australia in 2021, whereas this number was just 6900 in 2020.

Due to increasing demand of EVs, lithium prices are rising, and this seems to be main reason why lithium stocks are grabbing the attention of the investors.

Most of the lithium stocks, however, are trading in red zone today (August 18). The overall ASX 200 Materials index is also 0.62% lower at 16,353.80 points at 3.48 PM AEST.

On a sectoral front, eight out of 11 sectors are down, and IT was the worst performing sector today (down 2.26%) followed by materials and others at 3.48 PM AEST.

In this article, we at Kalkine Media® will discuss the performance of few lithium shares in this month.

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Sayona Mining Limited

Sayona Mining (ASX:SYA) is an ASX-listed lithium producer with projects in Western Australia and Québec in Canada.

Sayona made two announcements on ASX this month (August 2022).

In one of its announcements on August 4, Sayona said that it has advanced its intended resumption of spodumene (lithium) production at Quebec’s North American Lithium (NAL) facility.

Sayona said that it has committed about AU$100 million to the restart of the NAL and is on target to resume production in Q1 2023.

As part of its strategy, Sayona has decided to hire locals to work on this project and over 98% of its workforce is residing in Abitibi-Témiscamingue.

On 5 August, Sayona announced that it has inked an agreement with Acuity Capital to extend and increase the size of its At‐the‐Market Subscription Agreement (ATM).

The agreement is valid till 31 July 2025.

Earlier, the expiry date of the agreement was 31 July 2023, and the ATM facility limit was upto AU$50 million.

As collateral against the ATM, Acuity Capital now holds 95 million fully paid ordinary SYA shares. The company has agreed to issue an additional 155 million SYA shares at no consideration to bring the total security held by Acuity Capital to 250 million SYA shares ("Collateral Shares") following the ATM extension and limit increase, subject to shareholder approval.

The company may terminate the ATM at any time, including by purchasing the Collateral Shares back and terminating them for no money (subject to shareholder approval).

Meanwhile, shares of Sayona were trading 1.92% lower at AU$0.26 per share today (18 August) at 3.20 PM AEST. However, the company’s shares have risen more than 30% this month.

Core Lithium Ltd

Core Lithium (ASX:CXO) is a lithium, copper and uranium explorer and developer.

On 15 August, 2002, the company had shared an update on its explorations activities in the Northern Territory.

Let's take a look at these updates.

Finnis Lithium Project: Following diamond drilling at BP33, Core Lithium will now carry out extensional exploration and resource delineation projects at Carlton, Hang Gong, Lees, and Sandras. These programs will help in improving the Mineral Resource Estimates.

Core Lithium has already begun a +40,000m RC drill program that will be split between target sites in both greenfields and brownfields.

Finniss Gold Project: The kind of gold mineralisation at Finniss is, according to the results interpretation, relatively comparable to the gold deposits in the Pine Creek Orogen ("PCO"), a gold region with historical production and current reserves of more than 18 million ounces. Over 40 surficial gold geochemical anomalies have been found on the Project tenements as a result of Core Lithium's exploration efforts.

Shares of Core Lithium were spotted trading at AU$1.39 per share, down 2.80% on ASX today (August 18) at 3.24 PM AEST. However, the shares have gained around 20% this month.

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Pilbara Minerals Limited

ASX-listed Pilbara Minerals (ASX:PLS) is a lithium and tantalum producer and explorer.

During the first week of August, Pilbara informed that a 5,000 dmt cargo with a target grade of 5.5% lithia was offered for sale. Delivery is set to begin in mid-September 2022.

Pilbara Minerals plans to accept the highest offer of US$6,350/dmt (SC5.5, FOB Port Hedland basis), which, when adjusted to account for freight expenses, comes to US$7,012/dmt.

In a separate announcement, Pilbara informed that it has appointed Dale Henderson as its new CEO and MD.

Ken Brinsden, the company's long time managing director and CEO, formally retired on July 30, 2022. However, he will continue to work for the company as a special advisor and continue to be the POSCO joint venture company director chosen by Pilbara Minerals until the directorship position is transferred later in the year.

Meanwhile, Pilbara shares were trading 2.24% lower, trading at AU$3.05 apiece on ASX today at 3.26 PM AEST. However, the shares jumped around 10% this month.


 


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