Investing News Network AUSTRALIA

Top 5 ASX Lithium Stocks of 2023

neon battery and lightning shapes
Oles_Art / Shutterstock

The best ASX lithium stocks based on year-to-date gains have continued to perform well in a tough price environment.

After reaching all time highs last November, 2023 has been a tough year for lithium prices. They plunged to start the year, and while they saw some strength in Q2, they declined again throughout the third quarter.

Weak Chinese demand has played a large part in lithium's story this year, and the Q4 restocking seen in recent years has yet to materialize. Despite that setback, many experts remain optimistic about the commodity's future, and some lithium companies are seeing growth on the back of the industry's positive long-term outlook , meaning a tough market in the short term could be a buying opportunity.

Here the Investing News Network takes a look at the top five ASX-listed lithium companies by year-to-date gains. The list below was generated using TradingView’s stock screener on October 10, 2023, and includes companies that had market caps above AU$50 million at that time. Read on to learn more about their activities so far this year.

1. Wildcat Resources

Year-to-date gain: 1587.5 percent; market cap: AU$249.61 million; current share price: AU$0.41

Wildcat Resources (ASX: WC8 ) is a lithium and gold explorer with an eye on Australia’s top mining provinces. The company has three main projects: the Bolt Cutter lithium and Tabba Tabba lithium-tantalum projects, both of which are in Western Australia's Pilbara region, and the Mount Adrah gold project in New South Wales.

After spending much of the first half of the year around AU$0.03, Wildcat’s share price took off when it entered into a binding agreement to acquire the Tabba Tabba lithium-tantalum project on May 17. The last time Tabba Tabba was explored was in 2014, according to Wildcat, and at that time lithium was not in high demand. By the beginning of Q3, the company’s share price had reached AU$0.155.

Wildcat announced on July 5 that early surveying and field work at Tabba Tabba had identified new pegmatites , and it began drilling at the project on July 14 with the goal of discovering priority targets. Wildcat’s share price continued to climb higher through August, during which time the company began follow-up drilling with a second rig at the project; it reached AU$0.40 on August 28.

Although its share price fell after that peak, it shot back up on September 18. That day, Wildcat released the first assays from Tabba Tabba, which confirmed “high-grade lithium mineralisation from surface in northern and central pegmatite clusters.” The central cluster had a highlight interval of 85 metres grading 1.1 percent lithium oxide, including 59 metres at 1.5 percent.

On October 12, Wildcat completed its 100 percent acquisition of Tabba Tabba. The company also shared the second batch of assays from drilling the same day, highlighting the Leia pegmatite in the central cluster, which has already been discovered to be greater than 1.5 kilometres in strike length and is open along strike. Wildcat is still waiting on results for 68 drill holes, the majority of which are from the Leia pegmatite. It has now begun diamond drilling at Leia and is targeting the extensions of the thickest lithium zones.

The company's share price climbed following the news to a year-to-date high of AU$0.475 on October 16.

2. Latin Resources

Year-to-date gain: 187.88 percent; market cap: AU$697.52 million; current share price: AU$0.29

Latin Resources (ASX: LRS ) is focused on exploring its Salinas pegmatite project in Brazil’s Aracuai lithium province, which hosts the Colina, Colina West and Fog’s Block targets. Latin Resources expanded the project by over 350 percent in February, when it acquired tenements covering 29,940 hectares in the region. It also owns the Catamarca pegmatite project in Argentina and an 18 percent interest in Solis Minerals (TSXV: SLMN ,OTCQB:SLMFF), a battery metals company in South America.

At the end of March, Latin Resources signed a memorandum of understanding with two Minas Gerais state government entities that will help the company as it develops Salinas and support building a lithium battery sector in the state. The government has designated Salinas a priority project. The company also completed a private placement of AU$37.1 million with funds from multiple entities, including North American battery metals funds.

On June 20, Latin Resources released an updated resource estimate for the Colina deposit based on a resource definition drilling program ; the news sent the company's share price flying upward from AU$0.20 to AU$0.28 over the following days. According to the report, the deposit is host to total resources of 45.19 million tonnes grading 1.32 percent, which results in 597,400 tonnes of contained lithium oxide, or 1.48 million tonnes of lithium carbonate equivalent — a 241 percent increase over Colina's previous resource estimate.

The company is continuing to explore Salinas, and on June 28 it announced discoveries of two spodumene-rich pegmatites . According to the company, these “confirm the presence of a ‘district scale’ lithium corridor within Latin’s tenements” that extends up to 26 kilometres southwest of the Colina deposit. Latin Resources’ share price hit a year-to-date high of AU$0.42 on July 31.

In August, the company released the results of metallurgical testing of Colina ore using DMS, which yielded spodumene concentrate grading 5.5 percent lithium oxide at a 93.1 percent recovery rate. Later that month, further high-grade results continued coming, with assays from diamond drilling at Colina and exploration drilling at Fog’s Block.

Latin Resources ended Q3 by releasing a preliminary economic assessment for Colina, which it is now referring to as the Colina project. According to the document, the mine would have a two stage plan with anticipated Phase 1 annual production of 405,000 MT of 5.5 percent lithium spodumene concentrate with first production in 2026.

3. Liontown Resources

Year-to-date gain: 117.84 percent; market cap: AU$6.5 billion; current share price: AU$2.93

Liontown Resources (ASX: LTR ) is constructing its Kathleen Valley lithium project, which is expected to begin production in mid-2024. The company commenced open-pit mining operations with the first blast at Kathleen Valley’s Mount Mann open pit on February 3. The material generated from this phase of operations will help with multiple aspects of construction, commissioning and ramp up.

Liontown has continued to make significant progress throughout 2023 at Kathleen Valley, including awarding necessary contracts for operations. For example, on May 10, it awarded the full open-pit mining services contract for the mine’s two open pits, and on July 19, it awarded the contract for spodumene and direct-shipped ore haulage .

The most recent and significant came on August 17, when the company awarded the contract for underground mining services to Byrnecut. The contract is valued at about AU$1 billion over four years, a total that includes “operating costs, sustaining capital and capital associated with operating the underground mine,” according to Liontown . The most recent project update on September 29 states that the project is still on schedule, but capital costs through first production have increased by 6 percent.

A big storyline for Liontown this year has been a potential acquisition by Albemarle (NYSE: ALB ). Liontown’s share price rocketed upward from AU$1.53 to AU$2.57 on March 28, when the company rejected another takeover bid from the lithium major. That offer was at a price per share of AU$2.50; Liontown had previously rejected offers of C$2.20 and C$2.35 from the company. The company’s share price hit a year-to-date high of AU$3.15 on June 16.

In September, Albemarle made a final non-binding offer of AU$3 per share , and Liontown’s board stated that if a binding proposal was made at that price it would unanimously recommend that shareholders accept the offer. However, the situation has changed in recent weeks — Hancock Prospecting, which is owned by Australian billionaire Gina Rinehart, has increased its stake in Liontown in stages to ultimately reach 19.9 percent , a significant enough holding to allow her to block the deal. As such, the lithium major withdrew its proposal on October 15 due to what it called “growing complexities” with the deal.

4. Future Battery Minerals

Year-to-date gain: 111.54 percent; market cap: AU$53.54 million; current share price: AU$0.11

Previously Auroch Minerals, Future Battery Minerals (ASX: FBM ) changed its name in March to reflect its focus on lithium and nickel. The company has been particularly focused on its lithium projects, the wholly owned Kangaroo Hills hard-rock project in Western Australia and the 80 percent owned Nevada claystone project in Nevada, US. As for its nickel portfolio, the company’s key project is the Saints nickel project in Western Australia; it sold its Nepean nickel project in May.

After starting 2023 at AU$0.051, FBM’s share price jumped in mid-March when the company announced that Phase 1 drilling at Kangaroo Hills intersected thick, high-grade lithium-cesium-tantalum pegmatites. Steady news from its projects continued driving FBM’s share price through Q2. On May 3, assays from step-out drilling extended the discovery , and on May 17 the company completed a diamond drilling program that intersected spodumene-bearing high-grade pegmatite in all five cores, one of which it plans to use for future metallurgical testing . The drilling also helped FBM identify seven high priority targets , it announced on June 8, two of which it dubbed Big Red and Rocky.

On the back of that news and the company commencing Phase 2 drilling at its Nevada project, its share price hit a year-to-date high of AU$0.13 on June 12. The Nevada drilling confirmed that its Lone Mountain prospect hosts shallow, thick lithium-bearing claystone. In the August 4 release, the company described the results as exceptional, with one highlight of 179.8 metres grading 766 parts per million. Its exploration at Kangaroo Hills in Q3 also saw positive results; the September 12 news that its drilling programs significantly increased the project’s size and tonnage led the company’s share price to match its previous high.

Moving forward, according to a September 21 exploration update , Future Battery Minerals will perform further diamond drilling at both projects, aiming to extend the strike of the pegmatite swarm at Kangaroo Hill’s Big Red and Rocky prospects and test the Lone Mountain claystone target at Nevada, respectively. The company is aiming to deliver mineral resource estimates for both in early 2024.

5. Loyal Lithium

Year-to-date gain: 101.79 percent; market cap: AU$53.28 million; current share price: AU$0.57

Loyal Lithium (ASX: LLI ) is a battery metals company with three lithium projects in North America. Its two Canadian hard-rock projects are the Hidden Lake project near Yellowknife in the Northwest Territories and the Triese project in the Eeyou Istchee James Bay region of Québec, and its remaining asset is the Scotty project in Nevada, US, which hosts both lithium brines and sediments.’

At the end of March, Loyal was suspended from trading on the ASX, and did not get reinstated until August 2 once it had re-entered compliance with Chapter 1 and Chapter 2 . The company still continued exploration activities during the period, and in April acquired a controlling stake in Hidden Lake, forming a joint venture with Patriot Battery Metals (TSXV: PMET ).

When trading did resume, Loyal’s share price quickly jumped from AU$0.32 to AU$0.55, and it hit a year-to-date high of AU$0.875 on August 16 with the discovery of spodumene-bearing pegmatite dykes at the company’s Trieste project.

On September 21, Loyal announced it signed a memorandum of understanding with Winsome Resources (ASX: WR1 ), which owns the Adina lithium project 14 kilometres from Trieste. Through the agreement, the companies will collaborate to, among other things, reduce costs, redundancies and environmental impact at their projects. The following week, Loyal commenced drilling at the project targeting the first of five pegmatite dykes.

The company has also recently released big news at its other two projects. On September 29, Loyal announced a maiden exploration target for the Scotty project in Nevada. The estimate, determined by independent geological consultants, ranges between 460 million tonnes grading 1,145 ppm and 837 million tonnes at 1,175 ppm. As for Hidden Lake, on October 19 the company extended its pegmatite surface mineralisation by 44 percent to 3,250 metres in its two major clusters MAX and HUE. Moving forward, the company’s winter drilling program will target the two clusters, which host seven spodumene-bearing pegmatites.

FAQs for investing in lithium

What is lithium?

Lithium is the lightest metal on the periodic table, and it is used in a wide variety of applications, including lithium-ion batteries, pharmaceuticals and industrial applications like glass and steel.

How do lithium-ion batteries work?

Rechargeable lithium-ion batteries work by using the flow of lithium ions in the battery's cell to power a device.

A lithium-ion battery has one or more cells, depending on the amount of energy storage it is capable of, and each cell has a positive electrode and negative electrode with an electrolyte separating them. When the battery is in use, lithium ions flow from the negative electrode to the positive electrode, running out of power once all have transferred. When the battery is charging, ions flow the opposite way.

Where is lithium mined?

Lithium is mined from two types of deposits, hard rock and evaporated brines . Most of the world's lithium production comes out of Australia, which hosts the Greenbushes hard-rock lithium mine. The next-largest producing country is Chile, which like Argentina and Bolivia is located in South America's Lithium Triangle. Lithium in this famed area comes from evaporated brines, including the Salar de Atacama. Lithium can also be found in sedimentary deposits, but currently none are producing.

Where is lithium found in Australia?

Australia is the world’s top producer of lithium , and the country’s lithium mines are all located in Western Australia except for one, which is Core Lithium’s (ASX: CXO ,OTC Pink:CXOXF) Finniss mine in the Northern Territory. Western Australia accounts for around half of global lithium production, and the state is looking to become a hub for critical elements .

Who owns lithium mines in Australia?

Several companies own lithium mines in Australia, including some of the biggest ASX lithium stocks . In addition to the entities discussed above, others include: Pilbara Minerals (ASX: PLS ,OTC Pink:PILBF) with its Pilgangoora operations; Allkem (ASX: AKE ,OTC Pink:OROCF) with the Mount Cattlin mine; Jiangxi Ganfeng Lithium (HKEX: 0358 ), which owns the Mount Marion mine alongside Mineral Resources (ASX: MIN ,OTC Pink:MALRF); and Tianqi Lithium (SZSE: 002466 ), which is a partial owner of Greenbushes via its stake in operator Talison Lithium.

Who is Australia’s largest lithium producer?

Australia’s largest lithium producer is Albemarle (NYSE: ALB ), which has interests in both the Greenbushes and Wodgina hard-rock lithium mines. Greenbushes is the world’s largest lithium mine, and Albemarle holds 49 percent ownership of operator Talison Lithium’s parent company. Albermarle also has 60 percent ownership of Mineral Resources’ Wodgina mine, and owns the Kemerton lithium production facility as part of a 60/40 joint venture with Mineral Resources.

Don’t forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Lauren Kelly, currently hold no direct investment interest in any company mentioned in this article.

Global News

Top News