The Hawkstone Mining Ltd [ASX:HWK] share price is up over 20% this morning after producing ‘battery grade’ 99.8% lithium carbonate.
The lithium and gold explorer reported the production of Li2CO3 at 99.8% purity, which meets the lithium carbonate specifications of major international battery manufacturers.
Hawkstone’s release explained that the result ‘exceeds the Benchmark Mineral Intelligences battery grade Li2CO3 at >99.5%.’
Hawkstone’s ASX announcement saw the HWK share price jump as much as 40% in early trade.
As Money Morning readers would be aware, lithium stocks are enjoying positive momentum recently, as the world shifts toward electric vehicles and sustainable energy.
Correspondingly, Hawkstone shares are up 350% YTD and up 1,300% over the last 12 months.
Hawkstone battery grade lithium announcement
Hawkstone today announced that it completed its metallurgical testing program with Hazen Research on the lithium-mineralised sedimentary material from Hawkstone’s Big Sandy Lithium project.
Is Lithium Ready for a New Bull Run in 2021? Free report reveals three stocks that could make serious gains.
This follows the preliminary results we covered here on 3 March.
Hawkstone reported that the Big Sandy Lithium project has a maiden Indicated and Inferred JORC resource of 320,800 tonnes of lithium carbonate equivalent.
According to the release, the testing program yielded lithium recoveries at 90.7% while removing impurities with ‘minimum lithium losses’, producing the headline battery grade 99.8% Li2CO3.
Further, a Benchmark Mineral Intelligence assessment on 15 March 2021 quoted US$12,625 as the price per tonne for Li2CO3 >99.5%.
The lithium explorer expects drilling permit approval within 30 days.
Hawkstone has a drilling rig ready for immediate site mobilisation.
The results prompted Hawkstone’s managing director Paul Lloyd to comment:
‘Today’s announcement … is a highly significant event that has enabled the decision to proceed to bench scale testing and pilot plant design.
‘We have a potentially large lithium resource and are able to produce high quality product in a market with a rapidly increasing demand and price.’
Hawkstone share price outlook
Last Friday, Bloomberg reported that ‘Wall Street hasn’t been this bullish about lithium in years.’
As I’ve noted yesterday, automakers in the US and Europe are shifting their goals towards electric vehicles.
And according to data compiled by Bloomberg, lithium miners in the Americas have raised almost US$3.4 billion in equity offerings this year.
That figure is seven times the total amount raised between 2018 and 2020.
The demand is there right now and lithium stocks are benefiting.
But with a rush to meet demand, competition can get crowded and saturated.
Lithium stocks therefore need to find competitive advantages and moats.
As Reuters reported this week, lithium-ion batteries are dangerous to transport over long distances, which is why automakers prefer to have them built near assembly plants.
This would potentially work in Hawkstone’s favour as it has a lithium project in Arizona, which it described as ‘America’s battery corridor.’
According to Hawkstone, its Big Sandy Lithium project is ‘ideally located’ in Arizona, ‘ranked #1 by the 2020 Fraser Institute Survey.’
The company noted that the US Departments of Energy and Defence are soliciting federal support to secure domestic supply chain security of critical battery metals.
In Hawkstone’s view, this allows the company to capitalise on any shifts in federal policy to cleaner energy, especially lithium-backed energy.
That said, nothing is guaranteed for Hawkstone and the big demand change in the lithium sector will only invite more competition.
With so much quickly changing and with dozens of lithium stocks grabbing one’s attention, investors may find it difficult to find the signal amid the noise.
If you’re looking for solid information, then I think you’ll find this free report on ASX lithium stocks worthwhile.
For Money Morning