Four must-see lithium stocks

Bags of lithium

Car batteries

“Demand for lithium ... is continuing to accelerate at a speed faster than what most people would have expected” MARKET INSIGHTS

Missed the boom?

Here are four stocks to help you catch the second lithium wave

JESSICA CUMMINS

ASX lithium stocks have declined 27% on a market cap weighted basis over the past three months.

Companies already in production like Mineral Resources (ASX:MIN), Allkem (ASX:AKE), and Pilbara Minerals (ASX:PLS) are down some 20–25% while developers such as Lake Resources (ASX:LKE) have dropped as much as 65%.

But as Seneca Financial Solutions CEO and investment advisor Luke Laretive points out, lithium and spodumene prices have continued to march higher and most analysts agree – long-term price forecasts between US$10-$20,000/t will likely remain in the near term.

This is because the demand for lithium, which is driven by the demand for electric vehicles, is continuing to accelerate at a speed faster than what most people would have expected.

Laretive says this speed, coupled with the inherent challenges of developing a mine, is likely to result in a protracted period of extraordinary prices until at least 2030.

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Of the producers, Laretive says

Mineral Resources (ASX:MIN)

is one of his favourites.

“I see the potential spin-out value of the lithium assets as undervalued and underappreciated while coupled with the company’s iron-ore operations,” he says.

“Of the pure-play producers, I like Pilbara Minerals (ASX:PLS) as there is significant potential takeover value and an undemanding valuation at current prices.”

When it comes to developers, Laretive says Seneca Financial Solutions screens out names that are proposing to operate in challenging jurisdictions and others on valuation grounds.

“There are some insanely overhyped, low-quality projects listed on the ASX,” he says.

It all comes down to wellcapitalised companies through key share price catalysts and where management have been able to meet or exceed milestones.

“Our preference remains Vulcan Energy Resources (ASX:VUL) –it is a large, expanding resource that will operate at exceptional margins once in production and is strategically located in Germany where most of the European giga-factories are located,” he says.

“It is also trading at a significant discount to peers on an EV/ Resource basis.

“Seneca also sees value in Australianfocused Liontown Resources (ASX:LTR) – they are well funded and have been able to secure project finance and offtake with Ford Motor Company taking them through final investment decision (FID) recently.”

And lastly, Laretive says

Piedmont Lithium (ASX:PLL)

is on his watchlist.

“The CFO Michael White just bought US$101,221 worth of stock.

“I can see why – the company is fairly discounted relative to peers at c. $0.53 and they also have the potential to supply low cost/high margin feedstock for US-based gigafactories who are expected to require c. 500,000/t per annum of lithium hydroxide from 2025.”

FEATURED

COMPANIES

As the pursuit of clean energy becomes a global imperative, investors who educate themselves about the battery metals sector stand to make substantial gains. Meet the companies at the forefront of the field.

Alma Metals (ALM) Alpha HPA (A4N) Alvo Minerals (ALV) Anax Metals (ANX) Arizona Lithium (AZL) Australian Vanadium (AVL) Azure Minerals (AZS) Black Canyon (BCA) Black Rock Mining (BKT) Cannon Resources (CNR) Cazaly Resources (CAZ) Cobalt Blue Holdings (COB) Conico (CNJ) Eagle Mountain Mining (EM2) European Lithium (EUR) Evolution Energy Minerals (EV1) Firetail Resources (FTL) FYI Resources (FYI) 29 30 31 32 33 34 35 36 37 38 39 40 41 42 Global Lithium (GL1) Golden State Mining (GSM) Infinity Lithium (INF) International Graphite (IG6) Latin Resources (LRS) Lunnon Metals (LM8) NickelSearch (NIS) Norwest Minerals (NWM) Panther Metals (PNT) Ragnar Metals (RAG) Sovereign Metals (SVM) Technology Metals Australia (TMT) Venture Minerals (VMS) Vulcan Energy Resources (VUL)

Companies included in this Featured Companies section are advertising clients of Stockhead. *Figures for Market Cap and Share Price were sourced from asx.com.au