Argosy advises the development of its Rincon Lithium Project is on schedule and on budget.
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The company holds a 77.5% interest in the Rincon project, which is located in Salta Province in Argentina. The mine is situated within the ‘lithium triangle’ – the world’s dominant lithium production source.
At the time of writing, the Argosy share price is 19 cents and down 7.3% on yesterday’s closing price of 20.5 cents.
It’s worth noting that when the market opened, Argosy shares were in the green by 7.3% and trading for 22 cents.
However, negative sentiment across the All Ordinaries (ASX: XAO) has affected Argosy shares. The index is down 153 points this morning to 7,476 points.
In its announcement, Argosy advised that 40% of construction works have been completed at the Rincon Lithium Project. The development of the modular 2,000 tonnes per annum of lithium carbonate production is on schedule and budget.
The company is targeting the first commercial production of lithium carbonate from mid-2022.
Argosy noted that major works consisting of the design phase, site construction, and plant commission works have advanced.
As such, Argosy provided a snapshot of the current progress:
97% of earthworks/land movements completed
78% of site works completed (site camp/accommodation, laboratory, office, and other works)
67% of the brine system completed (pumping station and plant settling ponds)
19% of the process plant completed (plant equipment acquisition and plant warehouse)
35% of utilities and associated services (vapour system, communication system and ancillary services).
The entire building stage is expected to continue throughout CY2021 and be completed about April 2022.
Argosy will then begin plant commissioning, test-works, and ramp-up over a 4-month period. Should everything go smoothly, the company will then start production operations.
Argosy hopes to expand the 2,000tpa of lithium carbonate to a 10,000tpa project development. It believes that with lithium prices rising along with tightening market supply and demand conditions, potential off-take arrangements will become more attractive.
Argosy managing director, Jerko Zuvela touched on the company’s latest developments, saying:
The Company’s Puna operations team continue making significant progress on construction and development works, toward commencing 2,000tpa lithium carbonate production operations at our Rincon Project.
With lithium market sentiment and lithium carbonate prices continuing to strengthen, we are excited as we escalate works to transform Argosy into a battery quality lithium carbonate producer and cashflow generator, and then to further progress the 10,000tpa project development expansion. We look forward to a significant near-term growth phase from the increasing development activity at our Rincon Lithium Project.
About the Argosy share price
In the past 12 months, the Argosy share price has gained about 290%, with year-to-date up 62.5%.
On valuation grounds, Argosy has a market capitalisation of roughly $253 million and 1.25 billion shares on issue.
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.