Shares in the lithium explorer continue their extended run into the green
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The Sayona Mining Ltd (ASX: SYA) share price has stepped into the green in morning trade today, extending an impressive run this year to date.
Sayona shares are pushing higher today after the company released an update on its lithium asset pipeline. At the time of writing, the Sayona Mining share price is up 3.16% to 9.8 cents.
Let’s take a closer look at what the report entails.
First, a quick recap on Sayona Mining
Sayona is in the minerals exploration business. Its main focus is exploration and development of graphite and lithium assets.
Sayona’s flagship project is the Authier lithium project in Canada, but it also has lithium and gold interests dotted around Canada and in Western Australia.
At the time of writing, Sayona has a market capitalisation of $530 million.
What was announced?
Sayona confirmed exploration at its “highly prospective” Mallina lithium site will begin. This comes after earn-in partner Altura Mining completed its due diligence on all of Sayona’s Pilbara projects.
In addition, the company explained Altura will invest $1.5 million “on exploration within three years to earn a 51% interest”.
Under the agreement, exploration efforts will initially prioritise the Mallina site. The company said “intercepts of up to 5m wide, grading 1–2% Li2O” were observed back in 2017.
The move strategically aligns with WA’s heightened lithium demand. The state has already laid claim to the world’s largest spodumene miner, according to Sayona. Spodumene is a mineral that contains a source of lithium.
Sayona explains that Macquarie Group Ltd (ASX: MQG) analysts “(are) predicting (spodumene) prices will rise by 30% through to 2025 due to lack of a third party”. It states “other analysts” predict similar outcomes.
Commenting on the release, Sayona managing director Brett Lynch said:
Importantly, Sayona has a growing presence with multiple projects in the two major lithium markets of the Asia Pacific and North America. We are shovel‐ready and set for near‐term production, putting us in an excellent position to benefit from accelerating global lithium demand.
Regarding the earn-in with Altura:
We welcome Altura’s decision to commence the earn‐in period and launch lithium exploration, given its track record of exploration success. This exploration activity provides the potential for further increases in shareholder value from any lithium discoveries by our earn‐in partner, amid rapidly rising spodumene prices and need for independent supply.
Investors are buying Sayona shares in droves after the release this morning, driving the Sayona Mining share price into the green.
Sayona shares are now exchanging hands at 9.8 cents, a 3.16% gain on the day, after they hit an intraday high of 10.25 cents in early trade.
Sayona Mining share price snapshot
The Sayona Mining share price has posted a year-to-date gain of 1,021%, extending the previous 12 month’s return of 909%.
These results have clearly outpaced the S&P/ASX 200 Index (ASX: XJO)’s climb of around 25% over the past year.
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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 owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.