Guess which ASX lithium stock is rocketing 15% on big news

Why are investors buying this lithium share on Wednesday?

| More on:
A man wearing glasses and a white t-shirt pumps his fists in the air looking excited and happy about the rising OBX share price

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 Argosy Minerals Limited (ASX: AGY) share price is having a very strong session on Wednesday morning.

In early trade, the ASX lithium stock is up an impressive 15% to 15 cents.

Why is this ASX lithium stock rocketing?

Investors have been fighting to get hold of the company's shares this morning after it made a big announcement relating to the Rincon Lithium Project in Argentina.

According to the release, Argosy Minerals has received official signed approval from the Government of Salta Province and the Secretary of Mining and Energy to grant the development of its 10,000tpa lithium carbonate expansion operation at the project.

This follows the approval of the company's Environmental Impact Assessment (EIA) and means the company is now able to increase its production to 12,000tpa of lithium carbonate product.

Management believes the EIA approval significantly de-risks project development at Rincon and will now prioritise a strategic partner process. This includes securing capital expenditure funding and off-take arrangements with a tier one counterparty in the electric vehicle supply chain for the 10,000tpa expansion.

'A significant milestone'

The ASX lithium stock's managing director, Jerko Zuvela, was very pleased with the news and described it as a significant milestone for the company. He said:

We are grateful to the Salta Province regulatory authorities, especially the Secretary of Mining and Energy and her team. The Company has conducted extensive works on this EIA process to prove the long-term sustainability of our project.

This is a significant milestone and I thank our team for such an achievement and we look forward to completing our upcoming milestones. The Company can confidently advance its strategic partner process, with the EIA approval providing significant de-risking for a potential strategic group to become involved in realising the development of the next 10,000tpa stage of our Rincon Project. This significant milestone further confirms Argosy's ambitions and near-term growth phase to fully develop the Rincon Lithium Project.

Despite today's strong gain, this ASX lithium stock remains among the worst performers on the All Ordinaries index over the last 12 months.

During this time, its shares have lost a very disappointing 62% of their value. As a comparison, over the same period, the All Ordinaries index has delivered a return of 6.2% before dividends. Including them, the return would be closer to 10%.

Shareholders will no doubt be hoping that today marks a turning point in the company's fortunes.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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

Image of young successful engineer, with blueprints, notepad and digital tablet, observing the project implementation on construction site and in mine.
Materials Shares

How much could $5,000 invested in BHP shares be worth in a year?

Here's what one leading broker believes could happen with this miner's shares next year.

Read more »

A woman jumps for joy with a rocket drawn on the wall behind her.
Materials Shares

Bell Potter says this ASX lithium stock could rocket 90%+ in 2025

Let's see why the broker is bullish on this lithium developer.

Read more »

A female employee in a hard hat and overalls with high visibility stripes sits at the wheel of a large mining vehicle with mining equipment in the background.
Materials Shares

Forget Fortescue shares and buy this ASX iron ore stock

Bell Potter thinks this iron ore miner could deliver big returns over the next 12 months.

Read more »

Miner looking at a tablet.
Materials Shares

Are ASX lithium shares prime real estate for value hunters?

Can these stocks recharge returns for investors?

Read more »

Image of young successful engineer, with blueprints, notepad and digital tablet, observing the project implementation on construction site and in mine.
Materials Shares

Are Rio Tinto shares a buy for its lithium plans?

Let's see what one leading broker is saying about the mining giant.

Read more »

Man with rocket wings which have flames coming out of them.
Materials Shares

Guess which ASX 300 lithium stock is rocketing 20% on huge Volkswagen news

Not all shares are being dragged lower by the market today.

Read more »

Dollar sign in yellow with a red falling arrow in front of a graph, symbolising a falling share price.
Materials Shares

Ouch: The Pilbara Minerals share price just hit a multi-year low

It's been a tough day for lithium investors.

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Materials Shares

Big ASX news: CEO buys 2.5 million Sayona Mining shares

This CEO has finally made a big share purchase.

Read more »