Lithium market surpluses continued to suppress costs and hinder sector progress all through Q3 2024, broad consolidation early within the quarter signaled a possible bottoming out.
Subsequently analysts forecasted a value restoration as EV gross sales exceeded expectations in September.
Projected demand progress prompted Sprott Insights to warn of a possible lithium scarcity rising as early as 2025, with demand, particularly from China, set to rise 20 p.c yearly.
Jacob White, an analyst at Sprott Insights, pointed to the longer term demand tendencies as a catalyst for lithium market funding.
“The lithium battery business is projected to create US$400 billion in annual income alternatives worldwide,” he wrote. “The lithium manufacturing element of the chain has recorded margins as excessive as 65 p.c, probably making it a extremely worthwhile sector.”
White continued, “Lithium miners, specifically, could also be effectively positioned as they can provide leverage to rebounding lithium costs. In distinction, non-vertically built-in lithium processing/refining corporations may even see their bills rise.”
The checklist under was generated utilizing TradingView’s inventory screener, and information was gathered on October 18, 2024. Whereas US lithium corporations had been thought of for the checklist, none had been up year-to-date on the time information was gathered. All lithium shares had market caps above $10 million of their respective currencies when information was gathered.
Year-to-date acquire: 408 p.c
Market cap: C$174.5 million
Share value: C$1.27
Exploration agency Q2 Metals is exploring its flagship Mia lithium property within the Eeyou Istchee James Bay area of Québec, Canada. The property comprises the Mia development, which spans over 10 kilometers. Additionally included in Q2 Metals’ portfolio is the Stellar lithium property, comprised of 77 claims and situated 6 kilometers north of the Mia property.
This yr, Q2 Metals has additionally targeted on exploring the Cisco lithium property, which is located in the identical area. On February 29, the corporate entered into three separate choice agreements to realize a 100% curiosity in Cisco, information that brought about its share value to skyrocket; it reached a year-to-date excessive of C$0.54 on March 4. Q2 Metals closed the acquisition of Cisco in June and now wholly owns the challenge.
In mid-Might, Q2 Metals launched re-assayed outcomes from 2023 drilling performed at Cisco by the property’s distributors. The corporate used the analytical methodology it has utilized to its Mia drill cores.
“We’re happy with the optimistic final result of the re-analysis of the Cisco drill outcomes,” stated Q2 Metals Vice President of Exploration Neil McCallum. “A radical overview of the standard management measures has solidified that the brand new outcomes are extra correct than the unique outcomes beforehand introduced. It’s not an sudden change because the analytical strategies now used are extra correct at increased grades above roughly 1.5 p.c Li2O and we’ve got a number of samples above that vary.”
Later that month, the corporate introduced the beginning of a summer season drill program on the Cisco property. It has since launched a number of important updates, together with the affirmation of eight new mineralized zones on July 8.
Firm shares rose to a year-to-date excessive of C$1.48 on October 10, shortly after Q2 launched drill outcomes and core assays from the Cisco property. As of October 1, 17 holes protecting 6,360 meters in complete have been drilled.
Moreover, every drill gap encountered pegmatite with seen indicators of spodumene mineralization, a key lithium-bearing mineral.
“These assays proceed to validate the potential and scale of the Cisco Property as that of a bigger mineralized system,” stated Neil McCallum, VP exploration. “One vital remark of those outcomes is the higher-grade nature of the bigger mineralized system as we check and observe the system progressing to the south.”
On the company facet, Q2 introduced a C$7.5 million non-public placement on July 10. The position, which was divided into two tranches, was efficiently closed on August 9, 2024.
12 months-to-date acquire: 78.26 p.c
Market cap: C$57.44 million
Share value: C$0.41
Volt Lithium is a lithium improvement and expertise firm aiming to develop into a premier North American lithium producer using its distinctive expertise to extract lithium from oilfield brine.
Shares of Volt reached a year-to-date excessive of C$0.49 on September 26.
On April 29, Volt introduced a strategic funding of US$1.5 million by an unnamed firm working within the Delaware Basin in West Texas. This funding is earmarked for the deployment of a area unit to provide lithium hydroxide monohydrate utilizing Volt’s proprietary direct lithium extraction expertise.
The corporate’s share value retreated within the second half of Q2, however July 17 information that Volt elevated its processing capability at its operations in Alberta, Canada, by 100 fold to 96,000 liters per day brought about its value to shoot up greater than C$0.08 throughout buying and selling that day.
An August announcement from Volt highlighted the deployment and subsequent manufacturing scale up of Volt’s DLE expertise within the Permian Basin. The sector unit has the capability to course of 200,000 liters (1,250 barrels) of oilfield brine per day on location in West Texas.
12 months-to-date acquire: 30.19 p.c
Market cap: C$140.03 million
Share value: C$0.69
South America-focused Lithium Chile owns a number of lithium land packages in Chile and Argentina. Presently, the explorer is working to delineate the deposit at its Salar de Arizaro property in Argentina.
On April 9, Lithium Chile introduced a 24 p.c improve within the useful resource estimate for Salar de Arizaro. The brand new complete for the challenge is 4.12 million metric tons (MT) of lithium carbonate equal, categorized as follows: 261,000 MT within the measured class, 2.24 million MT within the indicated class and 1.62 million MT within the inferred class.
Not lengthy after, on April 18, the corporate reported the creation of two wholly owned Canadian subsidiaries — Lithium Chile 2.0 and Kairos Gold — as a part of a spinout to separate its Chilean and Argentinian property.
Lithium Chile will retain its Argentinian lithium initiatives, and switch its 111,978 hectares of Chilean lithium properties to Lithium Chile 2.0 and its portfolio of gold property in Chile to Kairos Gold.
In a July operational replace for the Salar de Arizaro challenge the corporate highlighted excessive grade intercepts from gap ARGENTO-06.
12 months-to-date acquire: 73.33 p.c
Market cap: AU$572.84 million
Share value: AU$0.26
Australia-listed Ioneer owns the Rhyolite Ridge lithium-boron challenge in Nevada, US. The challenge is taken into account the “sole lithium-boron deposit in North America.”
As a part of the allowing course of for the Rhyolite Ridge challenge, Ioneer accomplished and submitted the executive draft environmental affect assertion (EIS) to the US Bureau of Land Administration (BLM) in mid-January. In mid-September, Ioneer introduced that the BLM printed the ultimate EIS, transferring the corporate nearer to constructing its Rhyolite Ridge lithium-boron challenge.
In keeping with the corporate, the milestone now makes Rhyolite Ridge the primary lithium challenge beneath the Biden Administration to achieve the superior stage of the environmental allowing course of.
“Since Ioneer’s work at Rhyolite Ridge started in 2016, we’ve got listened to members of the neighborhood and tailored our plans to maximise the challenge’s many financial advantages whereas minimizing oblique impacts to the neighborhood and surroundings. Rhyolite Ridge is stronger due to the in depth collaboration and enter from all concerned stakeholders,” stated Bernard Rowe, managing director at Ioneer.
2. Vulcan Vitality Sources (ASX:VUL)
12 months-to-date acquire: 63.45 p.c
Market cap: AU$920.24 million
Share value: AU$4.74
Europe-focused Vulcan Vitality Sources goals to assist a carbon-neutral future by producing lithium and renewable power from geothermal brine. The corporate is at the moment creating the Zero Carbon lithium challenge in Germany’s Higher Rhine Valley. Vulcan is utilising a proprietary alumina-based adsorbent-type direct lithium extraction course of to provide lithium with an finish aim of supplying sustainable lithium for the European EV market.
On April 11, Vulcan introduced the graduation of lithium chloride manufacturing at its lithium extraction optimisation plant in Germany. In keeping with the corporate, the milestone marks the primary lithium chemical manufacturing in Europe utilizing native provide. The plant constantly exhibited over 90 p.c lithium extraction effectivity.
Vulcan will now put together the 40 million euro facility for business manufacturing. The corporate already has binding lithium offtake agreements in place with main automakers and battery producers, and expects to produce sufficient lithium for 500,000 EVs throughout the first section of manufacturing.
Throughout the third quarter, Vulcan acquired its first licenses for lithium and geothermal exploration in Alsace, France. The permits cowl 463 sq. kilometres, increasing Vulcan’s complete licensed space within the Higher Rhine Valley to 2,234 sq. kilometres throughout France and Germany.
In early August, Vulcan started commissioning its downstream lithium hydroxide optimisation plant (CLEOP) close to Frankfurt.
“Within the coming months, Vulcan will start to move the primary LiCl parcels from our upstream facility by to CLEOP for manufacturing of the primary battery-grade lithium hydroxide merchandise in Europe, all from a European lithium useful resource,” Vulcan CEO and Managing Director Cris Moreno stated.
A mid-October launch from Vulcan outlined a memorandum of understanding with industrial software program designer AVEVA. The partnership will see AVEVA construct a digital framework for Vulcan’s Zero Carbon lithium challenge.
12 months-to-date acquire: 3.7 p.c
Market cap: AU$53.17 million
Share value: AU$0.14
Cygnus Metals is an exploration firm targeted on advancing its Pontax, Auclair and Sakami lithium initiatives within the Eeyou Istchee James Bay lithium district of Québec, Canada. The corporate additionally owns uncommon earth component, lithium and base steel initiatives in Western Australia.
In July, Cygnus reported the completion of geophysical survey work on the Auclair lithium challenge. The ensuing information “recognized important potential for progress” within the Pegasus zone.
Most just lately, Cygnus entered into an settlement to a merger of equals with Canadian copper firm Doré Copper Mining (TSXV:DCMC,OTCQB:DRCMF), which owns a number of copper property in Québec. The assertion says the merger creates “a Québec-focused essential minerals explorer and developer with high-grade copper and lithium sources.”
“By combining the confirmed exploration and administration abilities of the Cygnus group with the high-grade copper sources and immense upside potential on the Chibougamau properties, we’ve got the potential to unlock substantial worth,” stated David Southam, Cygnus’ government chairman.
FAQs for investing in lithium
How a lot lithium is on Earth?
Whereas we do not know the way a lot complete lithium is on Earth, the US Geological Survey estimates that international reserves of lithium stand at 22 billion metric tons. Of that, 9.2 billion MT are situated in Chile, and 5.7 billion MT are in Australia.
The place is lithium mined?
Lithium is mined all through the world, however the two nations that produce probably the most are Australia and Chile. Australia’s lithium comes from primarily hard-rock deposits, whereas Chile’s comes from lithium brines. Chile is a part of the Lithium Triangle alongside Argentina and Bolivia, though these two nations have a decrease annual output.
Rounding out the highest 5 lithium-producing nations behind Australia and Chile are China, Argentina and Brazil.
What’s lithium used for?
Lithium has many makes use of, together with the lithium-ion batteries that energy electrical automobiles, smartphones and different tech, in addition to prescribed drugs, ceramics, grease, lubricants and heat-resistant glass. Nonetheless, it’s largely the electrical car business that’s boosting demand.
How you can spend money on lithium?
These seeking to get into the lithium market have many choices in the case of learn how to spend money on lithium.
Lithium shares like these talked about above could possibly be choice for buyers within the area. Should you’re seeking to diversify as an alternative of specializing in one inventory, there’s the World X Lithium & Battery Tech ETF (NYSE:LIT), an exchange-traded fund (ETF) targeted on the steel. Skilled buyers may take a look at lithium futures.
In contrast to many commodities, buyers can not bodily maintain lithium because of its harmful properties.
How you can purchase lithium shares?
By the usage of a dealer or an investing service similar to an app, buyers should buy lithium shares and ETFs that match their investing outlook.
Earlier than shopping for a lithium inventory, potential buyers ought to take time to analysis the businesses they’re contemplating; they need to additionally resolve what number of shares might be bought, and what value they’re keen to pay. With many choices available on the market, it’s important to finish due diligence earlier than making any funding choices.
It is also vital for buyers to maintain their objectives in thoughts when selecting their investing methodology. There are various components to think about when selecting a dealer, in addition to when taking a look at investing apps — a couple of of those embody the dealer or app’s status, their price construction and funding fashion.
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Securities Disclosure: I, Georgia Williams, maintain no direct funding curiosity in any firm talked about on this article.
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