Argosy share price: a trading halt and the lithium market in focus

As the Argosy share price is put in a voluntary trading halt, we examine recent developments from the company as well as broader news in the lithium market.

Argosy Minerals (ASX: AGY) has today had its stock placed in a voluntary trading halt, pending an announcement regarding ‘the regulatory approvals process for the construction of an initial ~2,000tpa lithium carbonate processing plant’ at the company’s Richcon Lithium Project, based in Argentina.

The trading halt is expected to last up to two days.

Argosy share price: a difficult year

The last year was likely a difficult one for Argosy Minerals (ASX: AGY) investors, with the stock declining ~44% in that period.

Currently sitting at the $0.080 per share mark, Argosy trades significantly off its five-year share price high of $0.469 per share – achieved in January 2018.

Volatile share price action aside, today’s announcement builds on a promising media release from early December, where the company first flagged that regulatory approval for the Richcon processing plant was closing in on being finalised.

A milestone for the company, Argosy commented last month that 'it is currently scheduling a preliminary trial cargo comprising ~5 tonnes of high quality lithium carbonate produced from its industrial scale pilot plant operations for shipment during Q1, 2020.’

The sales agreement for that shipment was executed in March 2019.

Looking at the specifics of Rinhcon’s current lithium output, it was noted that ‘processing operations are achieving consistent high quality carbonate product, with results reaching up to 99.8% Li2CO3 content with very low impurity levels.’

Argosy's Managing Director, Jerko Zuvela commented that ‘we are excited at the pending maiden shipment of high quality lithium carbonate produced from our Rincon Lithium Project and confirming our status as the first LCE producer from Salta Province in Argentina.'

The lithium price and market at a glance

There have been a number of positive developments in the lithium market recently, particularly in regards to price transparency. For example, the London Metals Exchange (LME) recently partnered with Fastmarkets to promote additional price transparency in the market.

The LME now offers weekly pricing on both lithium carbonate and lithium hydroxide. According to the LME, battery grade lithium carbonate currently trades at US$8.75 per kilogram; while battery grade lithium hydroxide monohydrate currently trades at US$10.75 per kilogram – as of January 2.

Such activity, suggests the Metals Exchange, will pave the way for potential LME Lithium Futures Contracts.

Other indicators, like the Solactive Global Lithium Index – which ‘tracks the performance of the largest and most liquid listed companies active in exploration and/or mining of Lithium’, may also be a good indicator for investors looking to gauge sentiment around the lithium market.

Looking at recent low-to-high price levels, the Lithium Index has trended up since August 2019, rising from a low of ~USD$90 to ~USD$110 today.

Overall, the Solactive Global Lithium index reached a peak of USD$156 in 2018, roughly coinciding with Argosy’s (ASX: AGY) own CY18 share price peak.

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