2022 saw lithium prices soar to new all-time highs. On average, lithium chemicals (carbonate and hydroxide) were up >150%, while spodumene concentrate (i.e. the primary output from most hard-rock Li mines) prices rose >280% during the year. Despite a price pullback for lithium carbonate and hydroxide this year, spodumene concentrate prices have remained near record levels. To no surprise, these heightened prices have continued to incentivize new investment into the space. Investors have been quick to pile into lithium stories, at varying stages of development, from established producers to grassroots explorers, across the full spectrum of Li deposits: hard-rock, brines, and sedimentary/clays, but hard-rock players seem to be emerging at a more rapid rate. In terms of valuation, one of these sources has stood out above the others, with hard-rock lithium resource developers also fetching the highest trading multiples.
With this report, we list reasons why investors tend to favour hard-rock Li resources and provide a guide as to what to look out for when evaluating a hard-rock Li asset. We name our top three picks in the hard-rock lithium space, and provide our updated lithium price forecasts. We are also initiating coverage on Latin Resources Ltd. (ASX:LRS, BUY, A$0.30 target, Koby Kushner) and Foremost Lithium Resource & Technology Ltd. (CSE:FAT, BUY (S), Koby Kushner). Finally, we provide summaries of the following companies with hard-rock Li exposure: Sigma Lithium Corp. (TSXV:SGML, BUY, C$56.00 target, David A. Talbot), Critical Elements Lithium Corp. (TSXV:CRE, BUY, C$6.00 target, David A. Talbot), Bradda Head Lithium Ltd. (AIM:BHL, BUY, £0.40 target, Koby Kushner), Grid Metals Corp. (TSXV:GRDM, BUY, C$0.40 target, Taylor Combaluzier), ACME Lithium Inc. (CSE:ACME, Not Rated, Koby Kushner), Brunswick Exploration Inc. (TSXV:BRW, Not Rated, Koby Kushner), Li-FT Power Ltd. (CSE:LIFT, Not Rated, Koby Kushner), Patriot Battery Metals Inc. (TSXV:PMET, BUY, C$18.30 target, David A. Talbot), Winsome Resources Ltd. (ASX:WR1, Not Rated, Koby Kushner), ALX Resources Corp. (TSXV:AL, Not Rated, David A. Talbot), Green Shift Commodities Ltd. (TSXV:GCOM, Not Rated, David A. Talbot), Ophir Gold Corp. (TSXV:OPHR, Not Rated, Koby Kushner), and Snow Lake Resources Ltd. (NASDAQ:LITM, Not Rated, Koby Kushner). Within our Latin Resources and Sigma Lithium reports, we respectively discuss our recent site visits to the Salinas and Grota do Cirilo Li-pegmatite projects in Brazil.
