Argosy Minerals Joins Market Recovery as Shares Rise

Argosy Minerals Ltd [ASX:AGY] joined the market resurgence yesterday, rising 20% to $0.325, following a low of $0.27 the previous day.

Argosy’s gains are in line with other lithium mining companies, stemming from an overall market resurgence in the wake of Tuesday’s downturn.

With US markets on the up, the local market responded accordingly with some strong gains. AVZ Minerals Ltd [ASX:AVZ] was up 17%, Lithium Australia NL [ASX:LIT] up 12.5%, and Pilbara Minerals Ltd[ASX:PLS] up 9%.

Early this year, Argosy reached an in-principle agreement to take a 77.5% stake in Puna Mining SA, which owns the Rincon Lithium Project in Argentina’s ‘Lithium Triangle’. This region is set to produce up to 50% of the world’s lithium, and reportedly contains 70% of the world’s lithium reserves.

Stage 1 of the Rincon Lithium Project begins Lithium production in March 2018, while Stage 2 is already under development.

Argosy is set to expand its operation with exclusive rights to purchase the adjoining Mina Tincal mining title and apply for ‘Mining Group’ status for regulatory purposes. This will help facilitate lithium brine pumping operations in Stage 2 and will also increase overall lithium brine pumping capacity.

Stage 1 aims to produce 500 tonnes of battery grade lithium carbonate equivalent (LCE) per annum, with Stage 2 set to expand plant capacity to 1,000-1,500 tonnes per annum of LCE.

Lithium demand could push Argosy Minerals share price higher

Demand for lithium is set to soar by up to 200% by 2025, as car makers and consumers opt for greener tin tops. That means lithium miners like Argosy will reap the rewards of the coming battery boom, but for the time being, Argosy’s share price suffers from large fluctuations.

Over the past year it has risen from $0.025 to $0.35. In August 2017, Argosy’s stock rose 130% after Chinese battery materials company, Qingdao Qianyun, put up $16.9 million for a 19.9% stake in the company.

The firm also paid $9.5 million for an agreed quantity of battery grade lithium carbonate from Argosy’s Rincon Lithium Project. But when Qianyun moved to terminate the agreement, Argosy’s stock fell by 20%.

Then in October, Argosy reportedly substituted the deal with Qianyun for a $15 million placement and $2 million share purchase plan.

With the new deal in place, and the company’s growing stake in the Rincon Lithium Project, the future looks bright for Argosy in 2018.


Kris Sayce,
Publisher, Money Morning

Money Morning is Australia’s most outspoken financial news service. Your Money Morning editorial team are not afraid to tell it like it is. From calling out politicians to taking on the housing industry, our aim is to cut through the hype and BS to help you make sense of the stories that make a difference to your wealth. Whether you agree with us or not, you’ll find our common-sense, thought provoking arguments well worth a read.

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