Insights

This ASX gold share is soaring 57% following a lithium acquisition

The Monger Gold share price is surging as the company moves towards a lithium-fuelled future.
The post This ASX gold share is soaring 57% following a lithium acquisition appeared first on The Motley Fool Australia. –

The share price of ASX gold explorer Monger Gold Ltd (ASX: MMG) is being electrified on news the company has shaken hands on a lithium acquisition.

It’s agreed to buy up to 100% of the US Scotty Lithium Project for what Monger chair Peretz Schapiro says is a “very modest upfront cost”.

“Through development of the Scotty Lithium Project, as well as continuing to seek out additional accretive acquisitions, [Monger] intends to become a significant player in the lithium market,” Schapiro continued.

At the time of writing, the Monger share price is 44 cents, 57.14% higher than its previous close.

However, earlier today the company’s stock surged to 60 cents – representing a 114% gain.

Let’s take a closer look at the ASX gold stock’s new lithium venture.

ASX gold share to take on lithium project

The Monger share price is launching to a new all-time high on Tuesday following news it’s breaking into lithium exploration.

The ASX gold share has agreed to acquire up to 100% of American Consolidated Lithium (ACL) – an entity with rights to buy 700 unpatented placer mining claims.

Those claims make up the Scotty Lithium Project, covering approximately 14,000 acres in southern Nevada.

Monger has agreed to pay $2 million upfront for the acquisition of ACL.

“The majority of the consideration [is] contingent upon the delineation of a significant JORC Resource of up to 500Mt at a grade of at least 1,000 parts per million [of] lithium,” Schapiro said.

“This would be a very large resource – which illustrates the considerable upside of this acquisition.”

The project is located 70 kilometres from the US’s only lithium-producing mine and 330 kilometres from Tesla‘s Nevada Gigafactory.

The $2 million upfront payment will be paid via scrip, with eight million Monger shares offered at 25 cents apiece. The company will also provide four million options exercisable at 30 cents.

That will buy it 80% of ACL. The remainder can be purchased in two considerations of 10% each, upon certain exploration milestones.

Additionally, ACL can purchase the Scotty Project in five annual instalments, totalling US$170,000 cash. The first – worth $US$20,000 – is due on 30 June 2022.

The current claim owner will retain a 1% net smelter return royalty for the project. ACL can buy 0.5% of the net smelter return at any time for US$500,000.

The ASX gold share expects to begin explorations at the lithium project shortly.

It’s planning for soil sampling to begin in June. It’s also expecting to kick off a minimum 3,000 metre drilling program in the September quarter.

Monger share price snapshot

Today’s gains have boosted the Monger share price further into the long-term green.

Right now, the company’s stock is trading for 117.5% more than it was at the start of 2022. It’s also 60% higher than it was at its first close on the ASX in June 2021.

The post This ASX gold share is soaring 57% following a lithium acquisition appeared first on The Motley Fool Australia.

Should you invest $1,000 in Monger Gold right now?

Before you consider Monger Gold, 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 Monger Gold wasn’t one of them.

The online investing service he’s run for over 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 January 13th 2022

More reading

CSL share price lifts as plasma collections continue recovery
Woolworths share price rises after Q3 update beats consensus estimates
2 high-yield ASX dividend shares buy-rated by analysts in May
What’s dragging the Mineral Resources share price lower on Tuesday?
What happened to the IAG share price in April?

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. 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 Scott Phillips.

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.

  • This field is for validation purposes and should be left unchanged.

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

Share With Your Friends

Free Share Allocation Reward Levels

STARTER

Class
$ 2,500 Deposit & Trade
  • REWARD^
  • 1 x Marathon Oil Corporation (NYSE:MRO)

ECONOMY

Basic
$ 5,000 Deposit & Trade
  • REWARD^
  • 1 x Pfizer Inc (NASDAQ:PFE)

ECONOMY

Standard
$ 10,000 Deposit & Trade
  • REWARD^
  • 1 x Amazon.com Inc (NASDAQ:AMZN)

ECONOMY

Plus
$ 25,000 Deposit & Trade
  • REWARD^
  • 2 x Apple Inc (NASDAQ:AAPL)
POPULAR

BUSINESS

Class
$ 50,000 Deposit & Trade
  • REWARD^
  • 4 x Apple Inc (NASDAQ:AAPL)

FIRST

Class
$ 150,000 Deposit & Trade
  • REWARD CHOICES^
  • 12 x Apple Inc (NASDAQ:AAPL)
  • 2 x Tesla (NASDAQ:TSLA)
^Please refer to the Free Share Promotion Terms and Conditions for details.

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, 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.

FREE AAPL, TSLA, AMZN, PFE or MRO Share(s)
REGISTER TO BE ELIGIBLE FOR FREE SHARES
TRAVEL ACROSS THE FINANCIAL WORLD
Act Fast - Promotion Ends In
Click Here To Get Started
FREE AAPL, TSLA, AMZN, PFE or MRO Share(s)
REGISTER TO BE ELIGIBLE FOR FREE SHARES
TRAVEL ACROSS THE FINANCIAL WORLD
Act Fast - Promotion Ends In
Click Here For More Info