Why Sayona (ASX:SYA) share price jumped 320% in January

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Why Sayona (ASX:SYA) share price jumped 320% in January

 Why Sayona (ASX:SYA) share price jumped 320% in January

Summary

  • Shares of Sayona Mining Ltd (ASX:SYA) jumped 320 per cent in January 2021 and 110 per cent in the last one year. 
  • The stock began to rally in January after Sayona inked a deal on 11 January 2021 with US-based lithium miner Piedmont Lithium Ltd, which has an offtake agreement with electric car major Tesla. 
  • Sayona expects the partnership to speed up its growth plans, including advancing its flagship Authier Lithium Project, the emerging Tansim Lithium Project, and establishing a lithium hub in Québec’s Abitibi region.

Shares of Sayona Mining Ltd (ASX:SYA) jumped 320 per cent in January 2021. The stock is up 110 per cent in the last one year. On 14 January 2021, the lithium miner’s shares surged as high as 30 per cent to a new high of A$0.047 on the announcement of a deal with Piedmont Lithium Ltd (ASX:PLL).

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However, the price of stock started to fall on 18 January 2021. The scrip closed at A$0.042, down 0.0050 points, or 10.64 per cent on Thursday, 21 January 2021, against the previous closing on Wednesday, 20 January 2021.

What’s behind the rally?

The stock began to rally after Sayona inked a deal on 11 January 2021 with US-based lithium miner Piedmont Lithium Ltd, which has an offtake agreement with electric car major Tesla. The deal is expected to boost the development of Sayona’s lithium projects in Québec, Canada.

Image Source: © Kalkine Group 2020

According to the agreement, Piedmont Lithium will invest up to US$12 million to become a strategic investor and major offtake partner in Sayona, acquiring 19.9 per cent of Sayona Mining and 25 per cent of Sayona Québec. The deal also included an offtake agreement for the acquisition of up to 60,000 tonnes per annum (tpa) of spodumene concentrate from Sayona Québec to supply Piedmont Lithium Project in North Carolina.

READ MORE: Sayona Announces Support from a US Investor to Advance Key Projects

What company says

According to the company, the deal would allow it to speed up its growth plans. It includes advancing its flagship Authier Lithium Project, the emerging Tansim Lithium Project, and establishing a lithium hub in Québec’s Abitibi region.

Sayona’s Managing Director, Brett Lynch said the partnership with Piedmont would have advanced both companies’ development plans in North America. Piedmont showed a tremendous vision in creating a base in North Carolina, a centre of lithium hydroxide production in the United States, and secured significant supply agreements with leading electric vehicle (EV) makers, Lynch also said.

READ MORE: Sayona Mining announces Bid extension for North American Lithium

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