The Sayona Mining Ltd (ASX: SYA) share price finished the session down 2.44% to 20 cents on Tuesday.
The S&P/ASX All Ordinaries Index (ASX: XAO) also languished in red, down 0.86% at the close.
Sayona Mining shares lost 4.8% of their value between the close on 31 March and the close on 28 April.
By comparison, the All Ords rose by 1.7%.
Funnily enough, April was actually a great month for the North American lithium and graphite producer.
Sayona Mining made three positive price-sensitive announcements, with investors pushing the share price up as a result.
But after these fits and starts, the share price kept retreating.
Let's review.
Image source: Getty Images
What news did this ASX lithium share provide in April?
On 14 April Sayona announced a "substantial rise" in the estimated pre-tax net present value (NPV) of its 75% owned North American Lithium (NAL) project and Authier Lithium Project.
Its 25% project partner is Piedmont Lithium Inc (ASX: PLL).
A definitive feasibility study (DFS) revealed an NPV of $2.2 billion. This represented a big increase in the project NPV compared with NAL's pre-feasibility study (PFS) released to the market in May 2022.
The PFS gave NAL alone a $1 billion NPV.
Sayona told investors the operation is now expected to generate estimated total net revenue of $7.6 billion with earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $3.7 billion.
Sayona Mining said:
Improvements in estimated project financial returns have been driven by the accelerated restart program, increased estimated head grade of 1.04% Li2O, high initial recovery rate (70.2%) and expanded LOM average annual concentrate production of around 190,000t (up 16% compared to the PFS), together with higher spodumene concentrate pricing.
Sayona's Managing Director, Brett Lynch, said:
This DFS demonstrates the benefits of our hub strategy in Abitibi, with NAL proving to be one of the lowest cost and highest returning investments in the lithium industry.
We are now in the process of successfully derisking the NAL operation, which will generate long‐term, sustainable returns for shareholders together with providing new jobs and investment for Québec.
The Sayona Mining share price rose by 5.3% to 21 cents on the news.
The ASX lithium share had an even better day on 17 April.
The company announced a major resource expansion for its Moblan Lithium Project to 51.4 million tonnes at 1.31% Li2O. This made the project "one of North America's single largest lithium resources".
Investors were thrilled and drove the Sayona Mining share price 10% higher to 22 cents.
All this buying activity made Sayona Mining one of the most heavily traded ASX shares on the day.
Then the company released its March quarter activities and cash flow report on 28 April. Investors were happy, and the Sayona Mining share price rose 5.3% from 19 cents to 20 cents.
So why did the Sayona Mining share price drop 5%?
Sayona Mining is a small-cap company with a $1.83 billion market capitalisation.
It is not yet producing any lithium, and these are the shares that lithium investors are concerned about.
They worry that the non-producers won't be operational in time to take advantage of historically high lithium prices before a bump in supply dampens the commodity's value further.
The lithium price is now down 70% from its record high in November 2022. This is mainly because China ceased its electric vehicle subsidies in January.
The price today is still high in a historical context, but it keeps falling. It's down 23% over the past month.
This may go some way to explaining why the Sayona Mining share price was stuck in rangebound mode between 19 cents and 22 cents over the month of April.
A quick look at the performance of other ASX lithium shares over the past month shows a pattern.
The share prices of producers such as Allkem Ltd (ASX: AKE), Pilbara Minerals Ltd (ASX: PLS), and Core Lithium Ltd (ASX: CXO) all went up.
The share prices of explorers such as Sayona Mining and Lake Resources N.L. (ASX: LKE) went down.
Having said that, Sayona did report its first lithium production at NAL in March. It was only 70 tonnes of spodumene concentrate though — not a commercial quantity.
Its first saleable concentrate is expected to be shipped in July.
Sayona Mining share price snapshot
The Sayona share price has fallen by 37.5% over the past year.
Sayona Mining remains one of the most shorted shares on the ASX.
All this recent good news prompted my colleague Seabastian to ask, Are short sellers wrong about Sayona Mining shares?
Time will tell.
