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Highlights
- Lithium prices have zoomed by roughly 437 per cent over the past year.
- Stocks of Lithium Americas climbed nearly 66 per cent year-over-year.
- FL scrip skyrocketed by over 188 per cent in the past 52 weeks.
The current complexity of heating inflation fuelled by macroeconomic factors, including the Ukraine crisis and rising interest rates, continues to weigh on the market. Investors generally focus on commodities like precious metals and base metals to tackle market volatility in such a market environment. Among metals is Lithium (L), a key element used in batteries, particularly in electric vehicles (EVs).
Lithium prices have reportedly zoomed by around 437 per cent over the past year. They could grow significantly in future with an increased focus on the electrification of the automobile industry and the economy to reduce carbon emissions.
Also read: ARIS, NSR, ORA, TRQ & HZM: 5 TSX metal & mining stocks as BoC hike rate
Keeping these points in mind, equity investors may explore the following two Canadian lithium stocks to tap into future growth.
Lithium Americas Corp (TSX: LAC)
Lithium Americas has mining projects in Argentina and the United States. The Canadian miner collaborated with junior lithium and copper company Arena Minerals (TSXV:AN) for the Pastos Grandes project on May 24. Under the agreement, both companies intend to share technical data and explore collaborative opportunities (if any) to optimize the onsite production profile.
Stocks of Lithium Americas climbed nearly 65.5 per cent since the past year. LAC stock shot up by roughly four per cent to C$ 27.10 per share on June 15. LAC’s Relative Strength Index (RSI) was 39.48 on June 15, higher from the 30-mark, representing a bearish trend, as per EODHD/Others data.
Frontier Lithium Inc (TSXV:FL)
Frontier Lithium is a junior lithium firm holding over C$ 508 million in market capitalization. Frontier completed its Phase XI drill program on the Spark Lithium deposit in March 2022 and believes that it has the potential to expand in size. The small-cap company discovered a new mineralized zone and said that the mineralized strike length stretched to the west on the Spark pegmatite.
FL scrip skyrocketed by over 188 per cent in the past 52 weeks. According to EODHD/Others, this lithium stock held an RSI value of 35.11 on June 15, marginally up from the bearish mark of 30.
Also read: LUN, TECK, FM, AEM, WPM: TSX mining stocks to buy amid high inflation
Bottomline
Investors focusing on commodities may explore Lithium Americas and Frontier Lithium as these stocks can provide exposure to the lithium demand resulting from the growing EV market.
Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
