Proactive Investors - Run By Investors For Investors

Lithium Australia mulls deeper project commitment as potential emerges

Lithium Australia mulls deeper project commitment as potential emerges

Lithium Australia (ASX:LIT) is considering expanding the scope of its work at the Pilgangoora project in Western Australia  after areas prospective for lithium “micas” were identified just northwest of a confirmed pegmatite zone.

Pegmatite is a source rock for the mining of lithium.

The discovery has prompted the company to consider stepping up its activities at the site by renegotiating its memorandum of understanding with project owner Pilbara Minerals (ASX:PLS), which is expecting to deliver a major resource upgrade  later this month after a 2015 resource in-fill and extensional drilling program returned further thick, high grade intercepts.

The latest developments at Pilgangoora have helped cement WA’s reputation as a lithium hotspot and added lustre to Lithium Australia’s business model as the company advances a potentially A$29 million fundraising drive.

Earlier this month, the company launched a placement to raise A$6.5 million in addition to a previously planned share issue, which could bring in a further $22.5 million when required.

The $6.5 million placement at $0.14 per share would comprise a $2.5 million component to professional and sophisticated investors along with a $4 million cornerstone investment by Lanstead Capital at the same share price.

Stock in Lithium Australia was last trading 13.3% higher at A$017, which represents a more than 80% jump since mid-last month.


Analysis

Listed lithium stocks have been flying on forecast future demand increases for lithium as battery and energy storage markets heat up.

For Lithium Australia, its share price gains have rewarded shareholders and is a 4-bagger since February 2015. The strong macro incentive has been punctuated by the company’s plans to conduct scoping work at a number of project sites and the achievement of first lithium hydroxide production in December.

Lithium hydroxide is a value-added lithium chemical used for the production of lithium batteries, which in turn represents a growing market on the back of increased electric car manufacturing momentum.



Proactive Investors is a global leader reporting financial news, media, research and hosts events for listed emerging growth companies and investors across four continents.

View full LIT profile View Profile

Lithium Australia NL Timeline

Related Articles

Gold
August 07 2018
Production at Hellyer is expected to begin in the fourth quarter
gold nugget
November 26 2018
The company is drilling at the old Albury Heath mine where it found bonanza-grade gold.
1533880895_Artemis-Super-Deep_Hole.jpg
August 10 2018
The company owns the only processing plant in the Karratha region and is exploring for gold, cobalt, copper and platinum.

© Proactive Investors 2018

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use