Lake Resources’ (ASX: LKE) first day as an S&P/ASX 200 company turned out to be bad omen, with the lithium developer’s share price down -13.69% to the close today. Despite the company’s fairly chipper announcement, the stock appears to have been caught up in the tough love being dished out to most players in the listed lithium space and across the broader metals market.
While lithium rivals Core Lithium (ASX: CXO) and Sayona Mining (ASX: SYA) were also on the receiving end of negative market sentiment, down -6.9% and -7.14% respectively, the S&P/ASX 300 Metals and Mining Industry (ASX: XMM) also slipped -5.85% today.
While Lake still remains inside the top 200 (now ranked 192) with reduced market cap of $1.8bn, any further losses could see it back outside this coveted cohort next time the index rebalances.
On a tear over the last year, the lithium developer’s share price is up 344% on a 12 month looksee. However, recent share price performance, down -46% since early April 2022 is further evidence that the lithium party is lower.
Ironically, if Lake’s announcement today - that Stu Crow will serve as the company's executive chairman for six month to assist in its transition to serve North American and Asian supply chains - had been released two months ago, the share price may have gone up by as much as it fell today.
As part of this transition to North America managing director Steve Promnitz plans to leave after establishing Lake’s dominant position in Argentina.
This footnote has clearly troubled some investors given the role Promnitz has played getting the operation to where it is now.
Lake also reminded the market of its aspirational target is to reach capacity of 100,000 tpa by 2030. This underpin Lake’s ambition to become a leading global producer of sustainable high purity lithium.
To the uninitiated, Lake is now developing four lithium brine projects in Argentina and has more than 150 people working across all four lithium brine projects.
The company has one of the largest lithium lease holdings in Argentina amounting to more than 2,200skm with most leases owned 100%. Lilac Solutions has the right to earn up to 25% of the Kachi project upon achieving certain milestones.
Lake Resources share price over 12 months.
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