Galaxy Resources Ltd (ASX: GXY)

James Bay’s potential reaffirmed: Galaxy Resources has announced further assays from its 2017 drilling campaign at the James Bay Project in Quebec, Canada, on September 14, 2017 with stock price surging 3.1%. In late March, the Galaxy James Bay team commenced a ~33,000m diamond drilling campaign to extend and develop the existing resource at the James Bay Project. The entire program is now complete. Earlier assay results (drill hole JBL17-19, 98.0m @ 1.62%, ASX, 2 August 2017) have confirmed the extent and continuity of spodumene mineralization. Further, the earlier results have been re-confirmed elsewhere in the pegmatite swarm (drill holes JBL17-21, JBL17-36, JBL17-38 and JBL17-39, below) with the latest assays. Mineralisation remains open below and to the west of the currently drilled out resource. Drill hole JBL17-21 (with drill hole JBL-17-20) extended parts of the resource a further -75m vertically below the current resource. GXY now expects to finalise mineral resource re-estimate and upgrade by end of October 2017. Earlier, the group had also announced that Mt Cattlin has transitioned into commercial production as of 1 May 2017. The stock has moved up 36% in the last one month, while it is up 44.8% in the past one year (as of September 13, 2017). On the account of latest positive developments and the stock trading at slightly high levels, we give a “Hold” at the current price of $ 2.65 


James Bay Spodumene Project (Source: Company Reports) 

Pilbara Minerals Ltd (ASX: PLS)

Stock surging high with Pilgangoora project acceleration: With the latest developments and Pilgangoora project update, Pilbara Mineral’s stock has moved up 12% on September 14, 2017. In line with its expedited construction schedule, PLS is targeting commencement of shipments of spodumene concentrate in the second quarter of 2018 as its Stage 1, 2Mtpa project advances rapidly towards first production at Pilgangoora. Initial work has also already commenced on the previously foreshadowed Stage 2 expansion to 5Mtpa, given the exceptionally robust outlook for the lithium market. Further, in consideration of the near-term transition to ongoing operations, Pilbara has secured the appointment of highly experienced mining executive Dale Henderson in the role of Project Director to deliver the balance of the Stage 1 construction, and establish Pilbara’s operational readiness. Company is well placed to meet this near-term and future demand for raw materials for the burgeoning lithium-ion global supply chain. The stock has moved up 28.2% in the last one month, while it is down 4.8% in the past one year (as of September 13, 2017). Given the ongoing progress and expected shipments from Pilgangoora, we maintain a “Buy” recommendation on the stock at the current market price of $ 0.56

Orocobre Ltd (ASX: ORE)

Turnaround to profit: ORE had reported a strong production of 11,862 tonnes of lithium carbonate for fiscal year of 2017 and expects over 14,000 tonnes of production for FY18. The group reported a profit of US$19.4 million, driven by sale of assets of US$14.8 million offsetting the impairment of Borax Argentina of US$8.1 million, as compared to the loss of US$22 million in fiscal year of 2016. Notably, lithium carbonate production surged 72% year on year (yoy) against FY16, while their sales revenue reached US$120 million in FY17 as compared to US$15 million (2 months) in prior corresponding period (pcp). Importantly, it managed to be among the low-cost producers with gross operating margins of 62% with lithium production costs at US$3,710/tonne. The stock has moved up 53% in the last six months, while it is up 9.5% in the past one year (as of September 13, 2017). We believe that the profit turnaround, record production, and growth plans will provide further upward momentum in the stock price. We give a “Hold” on the stock at the current price of $ 4.21

Altura Mining Ltd (ASX: AJM)

Progressing well in terms of funding and project: Altura Mining’s stock surged up 7.5% on September 14, 2017 while Canaccord Genuity has published an updated research report on the group at the back of positive developments. Altura has completed US$110 million Senior Secured Debt Facility and the conditions precedent required for the drawdown of the proceeds from Tranche 2 of the facility have now been met. Altura has therefore sent the Utilisation Request notification to the loan note holders for the Tranche 2 proceeds (US$77 Million), and the funds are scheduled to be received by Altura soon. The first Lithium Ore was mined at Pilgangoora Lithium Project from the pit in late August and has been stockpiled ready for processing. During August, over 180,000 banks cubic metres (BCM) of waste material was mined from the pit and used to construct site infrastructure including the Tailings Storage Facility (TSF). Further, early works on Structural Mechanical Plate work (SMP) steel erection has commenced in the crushing plant area and the Mine operations Centre (MOC) building has been delivered to site and is currently being installed adjacent to the Process Plant area. Infill drilling over the first three years of mining area in the pit has recently been completed. The data is being analysed and is expected to lead to a revised JORC Resource & Reserve report by early October. On the other hand, the Ball Mill and Apron Feeder have been despatched from Tianjin in China and are expected onto site around October 03, 2017. Given the ongoing developments and trading levels, we give a “Hold” recommendation on the stock at the current price of $ 0.21

Kidman Resources Ltd (ASX: KDR)

Court order in favour of Kidman Resources: Marindi Metals Ltd (ASX: MZN) has updated regarding the Company’s legal proceedings in the Supreme Court of Western Australia against Kidman Resources Ltd. The Company advised that the Court has (on 12 September 2017) decided about costs. Accordingly, Marindi is required to pay Kidman’s reasonable costs on a full indemnity basis from 1 March 2017 while the quantum of costs payable is yet to be finalised. KDR stock surged 9.25% on September 14, 2017 at the back of positive updates and the litigation news. On the other hand, recently, KDR and Sociedad Quimica y Minera de Chile (NYSE: SQM) have executed definitive agreements regarding the 50-50 Mt Holland Joint Venture (JV), which was originally announced on 12 July 2017. According to the agreements, Kidman will transfer a 50% interest in the Mt Holland Tenements for $US30 million; and Kidman & SQM will establish an unincorporated joint venture under which SQM will commit to sole fund $US80 million of JV expenditure. In preparation for the formal commencement of the joint venture, Kidman is in the process of mobilising two additional drill rigs for a total of four onsite to further test and potentially upgrade the Earl Grey Mineral Resource. Kidman has already delineated a 128Mt resource grading 1.44% Li₂O for 1.84 million tonnes of lithium oxide from limited drilling of what is a 1km wide, 1.5km long mineralised zone. With SQM’s support, Kidman aims to test a series of targets to evaluate the true potential size of the Earl Grey deposit and to assist SQM in developing the most suitable metallurgical process flowsheet and the optimal refining process. The stock rallied over 111% in the last six months, while it is up 92.2% in the past one year (as of September 13, 2017) and is already trading at higher levels, owing to positive court order on ownership of its lithium rights at its Mt Holland project. We give an “Expensive” recommendation on the stock at the current market price of $ 0.94

Lithium Australia NL (ASX: LIT)

MoU for Lake Johnston project in southern WA: Lithium Australia NLand Poseidon Nickel Ltd (ASX: POS) have signed an MoU (Memorandum of Understanding) to evaluate joint exploration and lithium processing opportunities at Lake Johnston and Ravensthorpe in southern Western Australia. The move is the latest under LIT’s strategy to underpin lithium chemical production from all lithium silicates, including lithium micas and spodumene. Under the MoU, LIT and POS will undertake due diligence and negotiate key commercial terms to underpin a proposed final agreement to jointly explore for lithium hosted pegmatites on tenements held by both Poseidon and LIT at Lake Johnston and Ravensthorpe. The companies will also assess the viability of utilising Poseidon’s 1.5 Mtpa Lake Johnston concentrator (which is currently on care and maintenance) to process lithium ores and produce a saleable lithium concentrate and downstream lithium chemical production.  Moreover, LIT and POS’ combined tenement package at Lake Johnston and Ravensthorpe covers an area of ~1,000km², which will significantly improve each company’s prospectivity for discovering lithium mineralisation. The stock rallied over 35.4% in the last three months, while it is down 35% in the past one year (as of September 13, 2017). Given the ongoing development at Sileach Large Scale Pilot Plant and current MoU with Poseidon Nickel, we give a “Speculative Buy” on the stock at the current price of $ 0.13
 

Poseidon Nickel’s Lake Johnston concentrator (Source: Company Reports) 

Prospect Resources Ltd (ASX: PSC)

Progress at Arcadia Lithium Project: Prospect Resources has announced the commencement of its bulk sampling and pre-development grade control programs at its Arcadia Lithium Project in Zimbabwe. By targeting the Main Pegmatite, the Company intends to generate approximately 20t of pegmatite to provide material for ongoing metallurgical optimisation studies as well as feed for the company’s newly established pilot lithium chemical facility. The bulk sampling and full exposure of the Main Pegmatite has also enabled the Company to initiate pre-development grade control sampling. Importantly, this first blast at Arcadia marks a milestone for The Arcadia Project and the bulk sampling will generate material essential to further optimise its process flowsheet and recoveries as well as to initiate grade control programs in anticipation of production. PSC also plan to use part of the bulk sample to provide a consistent feed to its country, pilot lithium chemical facility that is making considerable progress in producing battery grade lithium products. The stock has moved up 31.8% in the last six months, while it is down 42% in the past one year (as of September 13, 2017). We believe that it might be better to see some more signs of progress with regards to project development. We give an “Expensive” recommendation on the stock at the current market price of $ 0.03

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