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Question asked 06/12/2024

Lithium Stocks

Hi guy s I own Pilbara Mins , Is it a good time to accumulate ? If you were taking a punt on junior lithium stocks , because the price of lithium has fallen , which would be the better ;- Liontown - Gina Rinehart must be on a massive loss, BUT maybe waiting for the overtaken scenario to occur to make here KILL Patriot Battery Metals Inc. (PMT) - One of your cohorts wrote about PMT last week in the AFR Give us your thought s if possible cheers Cob

Answer

Hi Paul,

We believe that the lithium (Li) price is at, or approaching a low but not all companies will enjoy a small bounce from current commodity levels: UBS believe lithium prices have “most likely” bottomed, upgrading its spodumene forecasts for 2025 and 2026 to $US800 a tonne and $US850 a tonne, respectively.

Pilbara’s latest FOB (free on Board) cost is estimated to be $US620-640 for FY25. The company has flexibility to deal with depressed prices, as of June 2024, PLS reported having approximately AUD 1.7 billion in cash and cash equivalents.
Liontown (LTR) latest FOB (free on Board) cost is estimated to be $US500-550 at its at its Kathleen Valley project. The wild card here as you say is Gina’s 18.06% stake in the business. She could easily make a move on the $1.7bn business if it fits her plans.
Patriot Battery Metals Inc. (PMT) is a Canadian-based company which does not currently produce lithium but is actively developing its Corvette project in Quebec, one of the largest spodumene lithium deposits globally. If the Li price does turn the company could be on a majors shopping list.

Hence these are 3 very different propositions for Li exposure, our preference from an investment perspective is actually IGO but if Li can recover from current levels they should all outperform.

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Pilbara Minerals Ltd (PLS)

LAST UPDATED 04/12/2024 15:13

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