Why Argosy’s Share Price is Down Today

At time of writing, Argosy Minerals Ltd [ASX:AGY] is down 4.76%, trading at 20 cents a share.

Argosy is now down 58% from its all-time high of 48 cents on 15 January this year.

Argosy is a lithium mining company which owns a 77.5% interest in the Rincon Lithium Project in Argentina.

Argosy’s share price tied to the price of lithium

As you would expect Argosy’s share price is closely tied to the price of lithium.

Below you can see Argosy’s share price compared with the price of lithium over the course of the last year:

lithium price chart

Sources: marketindex.com.au and tradingeconomics.com

So, when lithium falls in price as more suppliers come to the market, Argosy’s share price suffers.

We detail three lithium stocks that could be your best speculative plays in our free report which can be accessed here.

Argosy has yet to sell any lithium

The company’s strategy is to ‘fast-track’ lithium production.

To date it has managed to manufacture 1.2 tonnes of lithium from its Stage 1 plant.

From that, 175kg of ‘battery quality’ lithium has been produced.

These are small amounts as they are still testing their process and are not far enough advanced to have significant output.

Though earlier this year there were even debates as to whether they would be able to produce ‘battery quality’ grades of lithium.

While an announcement last month settled this debate, investors may still be unsure as to how the company will cope with falling lithium prices.

Complicating matters is the prospect of an export tax being imposed on the company by the Argentinian government.

Meanwhile, other lithium suppliers on the ASX already have established operations.

It seems Argosy may be trying to enter an increasingly crowded market.


Ryan Clarkson-Ledward,
Money Morning

PS: Check out three established ASX-listed lithium miners in our free report here. Click here to download the report.

Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

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