The Lake Resources N.L. (ASX: LKE) share price had a very strange day today.
On Friday, this ASX lithium stock closed at 17 cents a share. This morning, Lake Resources shares started climbing and reached as high as 17.5 cents a share just before lunchtime (up more than 6% at the time). By the end of trading, the lithium producer ended up closing at 17 cents, up a decent 3.03%.
Now a 6% jump isn't too uncommon with ASX lithium shares, as investors that are familiar with this corner of the stock market could be all too aware of.
However, what is strange about this move today is its isolation. See, most ASX lithium shares actually had a pretty shoddy Monday. Take Pilbara Minerals Ltd (ASX: PLS) shares. Pilbara is now nursing a loss of 4.6% after market close.
Core Lithium Ltd (ASX: CXO) shares were down 2.86% to 34 cents, while Liontown Resources Ltd (ASX: LTR) shares were flat at $2.99 each.
Yet Lake Resources shares surged more than 6% at one point today. A response to an ASX enquiry could well be responsible.
Image source: Getty Images
Lake Resources share price bats away ASX query
In a letter released to investors this morning, Lake Resources responded to an apparent letter from the stock market operator, which requested the company clarify some public statements it had made last month in relation to testing at its Argentinian Kachi project.
As we covered at the time, Lake Resources described the testing work at Kachi as "successful", with four million litres of brine processed and 200,000 litres of eluate produced for testing.
The original ASX letter to Lake Resources hasn't been publicly released by Lake Resources. But it appears the ASX had a problem with Lake Resources labelling this announcement as 'price sensitive'. Lake responded to an ASX query that asked the following:
- Please define what LKE considered to be 'successful' completion of the test program, and explain the basis for LKE's view that the test was 'successful'.
- If the answer to question 2 is "yes" [which Lake affirmed] please explain the basis for that view, commenting specifically on how LKE considered the contents of the Announcement to be sufficiently definite to require disclosure under Listing Rule 3.1 in the absence of any JORC compliant test results.
Lake Resources responded by stating the following on why it believes the announcement was indeed appropriately designated as price sensitive:
The Company considers successful completion of the testing program as market sensitive as it
de-risks the Kachi Project, including by independently verifying LKE's flowsheet.A reasonable investor in LKE, which is a pre-revenue, early-development resource company, would expect that information confirming the Company's designed lithium chemical manufacturing process has the ability to produce battery grade lithium carbonate at scale (which directly impacts the Kachi Project's commercialisation) to be market sensitive and should be released.
So perhaps Lake Resources' response today delighted investors enough to send its share price up so significantly. Whatever the cause, no doubt investors are feeling quite chuffed after this stellar start to the trading week.
