Why did the Sayona Mining share price skip the ASX 200 party today?

Someone forgot to invite Sayona Mining to the ASX 200 party today…

| More on:
A woman stares at the candle on her cake, her birthday has fizzled.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Sayona Mining Ltd (ASX: SYA) share price was out of form on Wednesday.

The lithium developer's shares ended the day almost 8% lower to 23.5 cents.

This was despite the ASX 200 index rising a sizeable 1.75% to 6,815.7 points.

Why did the Sayona Mining share price underperform the market?

There appears to have been a couple of reasons for the softness in the Sayona Mining share price on Wednesday.

The first is relative weakness in the lithium industry, which saw the majority of lithium shares underperform today. For example, the Allkem Ltd (ASX: AKE) share price dropped 3% and the Core Lithium Ltd (ASX: CXO) share price fell almost 3.5%.

The other reason is potential profit taking from investors following some very strong gains recently.

After all, even after today's large decline, the Sayona Mining share price is up around 100% since 23 June.

What else happened?

The above weighed so heavily on its shares that not even an update on the company's Moblan Lithium Project in Quebec, Canada could keep them in positive territory.

According to the release, Sayona has launched the pre-feasibility study for the project and is expecting it to be complete by May next year. If all goes to plan, this is expected to be followed by a definitive feasibility study, with a target completion date of September 2023.

The release explains that the studies will examine the development of a mine and concentrator north of Chibougamau, near Mistissini, with the Moblan project serving as the centre of Sayona's northern lithium hub, including the emerging Lac Albert Project.

Sayona's managing director, Brett Lynch, commented:

Since acquiring the Moblan project in October 2021, Sayona has worked to rapidly develop this project with an extensive drilling program, targeting a major expansion of our lithium resource in an area already hosting world‐scale mines. This study should further enhance our confidence in the quality of the Moblan project and its potential for development as a new northern base of production, adding to our North American Lithium (NAL) operation and the Abitibi hub in the south.

Motley Fool contributor James Mickleboro owns Allkem shares. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.
Resources Shares

'I hate what I have done': Mineral Resources share price down as Ellison laments actions

Managing Director Chris Ellison says he deeply regrets the impact of his 'error of judgement'.

Read more »

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price
Materials Shares

Why is this ASX lithium stock jumping to a 52-week high today?

This lithium stock is smashing the market this year despite all the doom and gloom in the industry.

Read more »

Projection of two hands being shaken on a deal.
Materials Shares

Sayona Mining shares sink 13% on Piedmont Lithium merger news and capital raise

This merger will create the largest lithium producer in North America.

Read more »

Miner looking at a tablet.
Materials Shares

Down 28% in 2024, why this ASX 200 lithium stock could now be 'deeply undervalued'

The ASX 200 lithium stock has drawn plenty of investor attention over the past month.

Read more »

Image from either construction, mining or the oil industry of a friendly worker.
Materials Shares

Buy BHP shares for a 20%+ return

Goldman Sachs expects big total returns from this mining giant.

Read more »

Miner looking at a tablet.
Materials Shares

Here's why ASX uranium shares are ripping higher today

Uranium shares are smashing the markets today.

Read more »

A female broker in a red jacket whispers in the ear of a man who has a surprised look on his face as she explains which two ASX 200 shares should do well in today's volatile climate
Materials Shares

2 ASX 200 lithium stocks to buy for big returns

Which stocks are analysts tipping as buys right now? Let's find out.

Read more »

Young businesswoman sitting in kitchen and working on laptop.
Materials Shares

Is Mineral Resources stock a good buy right now?

This mining share is trading close to multi-year lows. Is this a buying opportunity? Let's find out.

Read more »