Argosy Minerals’ Share Price Surges 65%, Only to Drop after Mitsubishi Offtake

After sealing its offtake deal with Mitsubishi Corporation RtM Japan Ltd [TYP:8058] yesterday, Argosy Minerals Ltd [ASX:AGY] has entered a subsidiary covering an initial arrangement for the supply of lithium carbonate, causing shares to surge by as much as 65% to 16 cents yesterday.

At time of writing, Argosy Minerals’ share price is trading 25% lower, at 12 cents.

All this means is there’s a little bit of a correction phase for Argosy, after it’s highly price sensitive announcement yesterday.

The deal gives AGY the opportunity to exploit its stage 1 industrial-scale pilot plant for small-scale commercial lithium carbonate production, which could further add to AGY’s share price in the future.

Related: Discover the ‘green energy’ driving Australia’s next big resource boom.  

Argosy Minerals’ share price strengthens Mitsubishi relationship

As reported by Proactive Investors, the sales agreement between Argosy and Mitsubishi is set to strengthen both company’s relationship with one another, and lays the foundation for potential commercial commitment to come.

The commercial lithium production will set up processing and sample test-works achieved by AGY’s pilot plant.

Argosy is aiming mid-2019 as the target for the start of its operations in the sales agreement.

According to Argosy Managing Director Jerko Zuvela:

Argosy places considerable importance in working together with Mitsubishi RtM and the potential longer-term benefits this relationship may deliver.

It is also a strong endorsement of Argosy, the Rincon Lithium Project and our fast-track development strategy towards commercial lithium carbonate equivalent (LCE) production.’

Argosy Minerals’ 2019 outlook

It seems there are plenty positives to come from Argosy Minerals’ offtake with Mitsubishi, but the market is showing AGY may still have some developing to do before investors are completely on board.

In saying that, the agreement also has a bit of give, allowing flexibility for amendment of the arrangement at the mutual benefit of both companies.

Thus Argosy Minerals plans to secure a strategic relationship/partnership in order to gain capex funding solutions for commercial development of its Rincon project.

As always, only time can tell whether a stock will keep rising.

But investors may want to keep an eye on Argosy Minerals given all the positive news as of late.


Ryan Clarkson-Ledward,
For Money Morning

PS: If you’re looking to add lithium to your portfolio, then you need to check out this free investor report on how to get started investing in lithium. Download now to find out more.

Ryan Clarkson-Ledward is an Editor at Money Morning.

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