top of page

Is the Lithium Bull Rally Over?

The start of 2023 has given rise to many questions around the long-term viability of uplifted lithium prices. Further to this, any potential further capital growth in many major lithium miners. So the question is where do we go from here?

Over the course of the last couple of months, the lithium carbonate equivalent price (LCE) has fallen from 600,000 CNY to approximately 470,000 where it has seemed to find a support level. However, interest in lithium stocks has not waned in the slightest and below are two lithium stocks that remains on everybody’s conversations.

One stock that we have been following for some time is Canadian hopeful Patriot Battery Metals (ASX:PMT) that has performed spectacularly since its IPO with a price of $0.60 and is now trading at $1.82. Former Pilbara Minerals CEO Ken Brindsen, is now working hard at the helm announced promising drilling results from the wholly owned Corvette Property in the James Bay Region of Quebec. Their first eight drill holes have intersected various widths of spodumene pegmatite, which has extended the strike length of the CV5 Pegmatite body by an additional 400m along strike eastwardly.

On the dividend side is of course the largest hard rock spodumene producer that will soon be announcing a dividend later this month.

The company’s capital management framework was announced after the company reported over $2.2 billion in free cash from massive inflows from lithium. The company stated:

“A target dividend payout ratio of 20-30% of free cash flow has been adopted by the Company. This target payout ratio is designed to provide a sustainable dividend return to shareholders, but also reflects the early stages of Pilbara Minerals’ growth cycle, with the remaining cash flow able to be allocated to organic and inorganic growth opportunities.”

Leading broker Macquarie Group are by far the company’s biggest supporter on the dividend front with the miner to be in a position to provide a 30 cents per share dividend in FY 2023. Based on the current share price this will achieve over a 6% yield. On top of this the company also has slapped an OUTPERFORM rating on the stock with a $7.50 price target.

bottom of page