Welcome back everyone, so in this video I’ll sharing with you the latest on two of our favorite
lithium plays in Lake Resources and Sayona Mining so make sure you stick around to hear what’s going
on with them. But first, we need to address what’s going on in the markets with this end
to the week we just had where Tesla, Microsoft, Amazon and lots other megacaps being down by
significant amounts. So what exactly has driven this? The latest data on September’s nonfarm
payrolls number came in a 263,000 new jobs created in the US, with unemployment falling to 3.5%,
which sounds fantastic news right? Yes but, not quite, as that’s very good news for the economy,
but bad news for the Federal Reserve and markets. This is because, this is the
opposite of what the Fed is trying to do. Where its policies are attempting to crush demand,
so that unemployment increases and the prices of homes and other major goods decrease.
But this situation with many jobs and few available workers creates an environment where
labor has the upper hand. As a result, workers can bargain for higher pay and more incentives.
And what does this do, it creates upward inflation pressure, as companies’ input costs go up,
so they raise the prices of the goods/services they sell. And on the demand side, higher wages
for workers mean more demand, which also pushes up prices and creates even more inflation. What
does the Fed do? The Fed will have to keep tightening financial conditions aggressively
until it sees meaningful progress. And these higher interest rates put pressure on the stock
market because their interest payment on their debt and risk-free rate of return that’s used
in every financial model goes up, therefore reducing the value of most other assets.
Even safe haven sectors such as consumer staples, utilities, real estate, and health care,
which are meant to be the steady eddies of the stock market are also feeling the pain.
Wow, so what can you as investors do to manage this risk-free interest rate rises?
Some people are rethinking their overall portfolio structures. For example,
suppose they can now earn a guaranteed 4% by buying U.S. Treasuries. In that case, they may
not want to risk their money owning a stock that yields around the same with significantly more
volatility and potential principal risk. And there are lots other consideration.
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With that out of the way, please drop a quick like on the video and hit the bell,
so we can get on with it with our first lithium favorite here, which is Lake Resources Corp (OTC:
LLKKF, ASX:LKE) which is currently sitting at 67cents per share with a market cap of $927m.
Lake launched off in Q2 taking us to the moon and hitting highs of nearly $2 per share before
a short sell report and the resignation of their previous CEO brought it down to earth.
But despite all that volatility, the broader market selloff Lake has made
up some lost grounds to still be sitting only at modest losses of 13.6% over the ytd horizon.
That may be red but given what we have seen this year and what the stock and the company has gone
through, I feel this is a decent performance. And even better is that the company is carrying
on with their plans, which are even more ambitious than before. So since we called it at 25 cents per
share and more recently again at 40cents, Lake is sitting positive and on some sizeable gains.
So here’s what’s new with Lake which we need to be aware of.
Lake recently appointed a new CEO and Managing Director David Dickson – an industry leader
with over 30 years’ experience in engineering the energy sector
He has a proven track record in successfully delivering multibillion dollar resource projects.
And with globally significant lithium sites, Lake’s aspirational target is
to reach capacity of 100,000 tpa LCE. So they believe Mr Dickson’s expertise will
support Lake’s rapid growth and its mission to become a leader in the supply of responsibly
sourced and cost competitive high-purity lithium. Ensuring that their North and
South American operations will be fast tracked to advance key project and marketing milestones.
Their Chairman Mr Stuart Crow added that “This is a major achievement to have secured a CEO like
David as Lake goes from project development to construction to become a major lithium producer.
David combines proven leadership experience and engineering expertise with a deep strategic
understanding of off-taker and investor perspectives on energy supply chains,”.
All good news but lets see of David can deliver for us, guess what he’s gone
straight to business as Lake and WMC Energy executed a Conditional Framework Agreement
involving a 10 percent strategic investment in Lake Resources and offtake for up to
25,000 metric tons per annum (mtpa) of battery grade lithium (LCE) from Kachi Project.
The initial offtake term is ten years with an option to extend the term with an additional
five years. And the offtake to is to be priced on an agreed market price formula.
Stu Crow, Lake’s Executive Chairman, added that: “The Conditional Framework Agreement
delivers a long-term strategic alignment with WMC and its supply chain into its European and North
American customers. And WMC Energy has a track record of being a market leader in nuclear fuels
and expanded into battery materials including lithium to serve predominantly the US and European
lithium-ion battery supply chain for EVs with their strategic needs”,
And talking of WMC Energy, they are an asset manager incorporated in 2016 in Amsterdam,
originally to provide supply chain solutions in the nuclear fuel industry. In 2021, Sprott Asset
Management selected WMC Energy to be the physical manager of the Sprott Physical Uranium Trust.
With the help of WMC Energy’s uranium trading team, the trust grew from US$600
million at IPO inception in 2021 to almost US$3 Billion in total Net Asset Value today.
In 2020, WMC expanded into the battery materials sector
by offering fixed price forward sales solutions and through the development
of project financed physical asset in the lithium-ion battery material space.
So an interesting partner to sign an offtake agreement with but let’s watch the space.
Next up to our number 2 lithium banger stock for you today, which is Sayona Mining Ltd (OTC:
SYAXF & ASX: SYA) which is now sitting at 16 cents per share with a market cap of $1.2bn.
Sayona unlike Lake has been one of those few exceptional performers in the stock market this
year as despite its huge volatility, it is still up 73% ytd. It reached highs of 200% equally in
Q2 before tumbling down but if anything I feel it has shown us what it is capable of doing,
given they are yet to even start with their execution. So here’s what Sayona has been up to.
First off Sayona made its entry into the ASX200 as of the 9th of September,
so it is now trading amongst the top 200 listed firms by market
cap on the major Australian exchange and eligible to be included into most index
funds which would enhance their liquity and accessibility to different investor types.
They announced Pre‐feasibility study (PFS) launched for production of lithium
carbonate at their North American Lithium(NAL) operation. Sayona is
examining the options for lithium carbonate or hydroxide production in Québec, working
closely with its partner Piedmont Lithium. The PFS will examine the option of producing
lithium carbonate from spodumene (lithium) produced at NAL, where production of spodumene
concentrate is scheduled to commence from Q1 2023, which is only a few months away.
The potential move downstream is a significant potential value‐adding
boost in enhancing the long‐term value and profitability of the NAL operation.
Sayona Managing Director, Brett Lynch added that the study would provide valuable intelligence
on future planned downstream processing in Québec. As moving downstream has always been
the plan for Sayona in Québec, to enable a significant increase in profitability.
How interesting, we are now nearing 2023 and all those catalysts of our lithium plays are
close to materialising so perfect time to load the dips before the next bull runs.
So some very very interesting and mindblowing prospects ahead for these lithium penny stocks
but only consider getting in if the price is right for you and if you fully understand the risks.
This video is not financial advice, a buy or a sell recommendation, but is meant to
bring some new and exciting stocks to your attention for you to do your own research..
As always I would love to hear from you, so please let me know your thoughts on these top
stocks in the comments section below and what other stocks are catching your eyes lately.
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Thank you so much for being here and I look forward to have you in my next video. Thank you