Australian Mines (ASX:AUZ) share price rockets 30% on LG deal

Shares in the battery metals miner are on the rise today.
The post Australian Mines (ASX:AUZ) share price rockets 30% on LG deal appeared first on The Motley Fool Australia. –

The Australian Mines Limited (ASX: AUZ) share price soared into the green in morning trade, and has held its ground since.

Today’s gain comes as Australian Mines confirmed a binding offtake agreement in an earlier announcement.

Let’s investigate further.

A quick recap on Australian Mines

Australian Mines is a resource company with concentrated efforts in the exploration of battery metals.

The company is developing cobalt-scandium-nickel projects in Australia, such as the Sconi Project and Bell Creek Nickel-Cobalt Project.

At the time of writing, Australian Mines has a market capitalisation of $86 million.

What did Australian Mines announce?

In a positive for the Australian Mines share price, the company announced it had entered into a binding long-form offtake agreement with LG Energy Solution Australia.

The agreement is for the supply of mixed nickel-cobalt hydroxide from Australian Mines’ Sconi Project, which is located in North Queensland.

In addition, LG Energy Solution, owned by LG Chem, is “the world’s largest producer of advanced batteries for the electric vehicle industry,” as per the release.

Under the agreement, LG Energy will initially purchase 71,000 dry metric tonne of nickel, plus 7,000 dry metrics tonne of cobalt. Both will be purchased in the form of mixed hydroxide precipitate (MHP).

MHP is a nickel- and cobalt-containing material. It is used as a raw material input for lithium-ion battery production, according to Australian Mines.

Furthermore, one covenant embedded into the agreement is that Australian Mines must secure financing to construct the Sconi Project. The deadline for this is “on or before 30 June 2022”.

As such, the company will “now move swiftly” to ensure that agreements with financing partners are finalised.

Investors have favoured the update and are buying Australian Mines shares in droves since the market open.

Australian Mines shares are now exchanging hands at 2.6 cents apiece, a 30% climb on the day.

Australian Mines share price snapshot

The Australian Mines share price has posted a return of 66% this year to date. That extends the previous 12-month climb of 20%.

The returns have outpaced the S&P/ASX 200 Index (ASX: XJO) return of around 25% over the past year.

The post Australian Mines (ASX:AUZ) share price rockets 30% on LG deal appeared first on The Motley Fool Australia.

Should you invest $1,000 in Australian Mines right now?

Before you consider Australian Mines, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Australian Mines wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Why Beach, Bendigo & Adelaide Bank, Flight Centre, & Lendlease are tumbling lower

BrainChip (ASX:BRN) share price sinks 6% on capital call notice
It’s been a great month for the Pilbara Minerals (ASX:PLS) share price
Argo Investments (ASX:ARG) share price drops following FY21 earnings
How did the Ioneer (ASX: INR) share price respond last earnings season?

The author Zach Bristow has no positions 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.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!