The trend for key Lithium Stocks on ASX - ORE, GXY, PLS, LIT, CXO

  • Jan 22, 2020 AEDT
  • Team Kalkine
The trend for key Lithium Stocks on ASX - ORE, GXY, PLS, LIT, CXO

Lithium prices are driven by demand created by the battery industry. However, the battery technology is changing at a high speed, and the lithium market may be left behind. Other battery technologies are using more readily available materials to power batteries and therefore, the use of conventional minerals is facing some headwinds, which in a cascade, is creating a lithium supply glut.

As a result, the lithium stocks were broadly hammered in 2019. However, in 2020 the lithium stocks have rebounded, as the analysts are predicting stable lithium price in 2020, which is anticipated to boost long-term investment and offer a strong foundation for their growth in the earnings.

Moreover, the lithium stocks are moving up along with other metals & mining stocks on the back of potential end to the US/China trade war. The growth of China, which is largest trading partner of Australia, is pushing the lithium stocks.

Orocobre Limited (ASX: ORE)

Two contracts signed with top tier Chinese cathode manufacturers: Orocobre Limited (ASX: ORE) is one of the world's largest & lowest cost lithium producers that focuses on lithium and borax mining operation in Argentina.

On January 20th2020, the company signed two contracts with top tier Chinese cathode manufacturers B&M Science and Technology and XTC New Energy Materials respectively for supplying the Olaroz battery grade lithium carbonate.

The first contract is for delivering the total of 7.2k tonnes of battery grade lithium carbonate and the second one includes the delivery of a total 2.88k tonnes of micronised battery grade lithium carbonate. In both the contracts, the total tonnages have to be supplied over the period of three years and first shipments are projected to start in the March quarter 2020. The contracts are as per the company’s strategy to sign long term sales agreements with key customers.

On 22 January 2020, ORE last traded at $0.415, moving up by 1.22 percent from its last close. Meanwhile, ORE stock has risen 10.81% in the past three months period.

Galaxy Resources Limited (ASX: GXY)

Stock will be removed from S&P/ASX 200 Index from December 23, 2019: Galaxy Resources Limited (ASX: GXY) is a leading producer of lithium, potash, hard rock and brine assets.

As announced on 13 December last year, GXY stock was removed from S&P/ASX 200 Index effective from December 23, 2019 (as per December 2019 Quarterly Rebalance of the S&P/ASX Indices).

On the other hand, as notified to the market on 9 January 2020, during the December 2019 quarter, GXY had attained the lithium concentrate production volume of 43,222 dry metric tonnes (dmt) at Mt Cattlin, which reflects the upper end of guidance production range of 35,000-45,000 dmt. However, during the quarter, the company had sold 29,778 dmt of lithium concentrate, which is lower than its guidance range of 30k – 45k dmt. Further out of the total sales, the company has shipped 14,778 dmt but further 15,000 dmt was not shipped. This is due to the fact that the customer had prepaid for only 65% of the product but had delayed the shipment of this product until Q1 2020.

On 22 January 2020, GXY last traded at $1.160, moving up by 1.31 percent from its last close. Meanwhile, GXY stock has risen 25.82% in the past three months period.

Pilbara Minerals Ltd (ASX: PLS)

Term sheet agreed with POSCO for JV, FID and Board approvals anticipated in early 2020: Pilbara Minerals Ltd (ASX: PLS), an Australian lithium mining company that 100% owns and operates the Pilgangoora Lithium-Tantalum Project in Western Australia.

The company has already started commercial production at the Pilgangoora Project on 1 April 2019. The company has agreed the term sheet with POSCO for JV. The company is now anticipating formal agreements, FID and Board approvals in early 2020. Further in FY 19, the company had completed positive studies for the planned Stage 2 expansion to 5Mtpa and further Stage 3 expansion to up to 7.5Mtpa.

Moreover, the company during the December 2019 quarter has achieved 60% lithia recovery, and the company is targeting cash operating costs to be in the range of US$320 -$350/dmt CFR China (SC6.0 basis) from June 2020, after steady state name plate capacity is achieved.

Expansion Plan (Source: Company’s Report)

On 22 January 2020, PLS last traded at $0.375, moving up by 2.74 percent from its last close. Meanwhile PLS stock has risen 28.07% in the three months duration.

Lithium Australia NL (ASX: LIT)

WIPO published two Lithium Australia patent applications for lithium phosphate production: Lithium Australia NL (ASX: LIT) is a leading lithium producer and the only company capable of recycling all energy metals from spent lithium-ion batteries.

On 20 January 2020, the company notified on the Special Meeting of LIT’s Partly Paid Shareholders, to be conducted on24 February this year.

On the other hand, as updated by LIT on 14 January 2020, The International Bureau of the World Intellectual Property Organisation (WIPO), that offer IP protection by granting patents has published two Lithium Australia patent applications. Another patent was filed for the enhancement of Lithium Australia’s SiLeach® technology. Filing of an application is the 4th step taken in the 7-step procedure.

On 22 January 2020, LIT last traded at $0.065, moving down by 4.412 percent from its last close. Meanwhile, LIT stock has risen 47.83% in the past three months period.

Core Lithium Ltd (CXO)

Intersected world-class, high-grade lithium at the BP33 Prospect: Core Lithium Ltd (ASX: CXO), formerly known as Core Exploration Limited, is into a lithium exploration and is targeting production through the development of its 100% owned Finniss Lithium Project, located just south of Darwin port in the Northern Territory.

The company has very recently intersected world-class, high-grade lithium of 107m @ 1.70 percent Lithium Oxide Powder (Li2O) at the BP33 Prospect within the Finniss Lithium Project. CXO anticipates new mining studies and updated Feasibility Study to be completed in H1 2020 after the updated Mineral Resource estimates through February from the Finniss Lithium Project.

On 22 January 2020, CXO last traded at $0.040, moving up by 2.564 percent from its last close. Also, CXO stock has risen 11.43% in the past 30 days duration.

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