Join our daily newsletter At The Bell to receive exclusive market insights
- Mali-based and ASX-listed explorer First Lithium (ASX:FL1) reports fresh pegmatite intersections
- However, shares were down almost 6.5 per cent in the first hour of trade on Monday
- Low volumes are defining trades today
- First Lithium listed in September 2023 and sits well above its listing price
- 1Y returns for First Lithium investors are up 144 per cent
First Lithium (ASX:FL1) has announced drill results pointing to fresh pegmatite intersections – but shares were being sold off in the first hour of trade today.
FL1 shares fell nearly 6.5 per cent to 44 cents per share as of 10:45 am AEDT.
Low trading volumes are defining the stock’s performance at market open, with the overall ASX trading sideways today.
The stock boasts a four-week daily share turnover average volume of 1.183 million; in the first hour of trade less than 300,000 shares had turned over.
What is being reported?
The company has wound up a campaign extracting 1703.5 metres worth of diamond drill core with assays now in hand.
The company intersected more than 200 metres worth of pegmatites across six different drill holes on-site.
A further six holes, the first sunk on the eastern pegmatite target, intersected a total of 116.2 metres – “including well-mineralised pegmatite widths of 13.03, 19.83, 23.30, 14.33, 17.08, and 14.99 metres”.
All in all, strike length now reflects 1200 metres.
Perhaps not sparking enthusiasm in the hearts of shareholders are the significant depths at which more promising pegmatites were hit.
One drill hole “intersected the mineralised main pegmatite at depths of 150 metres to 220 metres,” the company reported.
Management comment
Management outlined a growing confidence in the play.
“Drilling has reached approximately 60 per cent of the previously announced program and with more mineralised intersections in the western pegmatite and now the first intersections of the initial drilling in the eastern pegmatite totalling 116.6 metres,” First Lithium Managing Director Venkat Padala said.
“With the main pegmatite strike further extended and with intersections of well-mineralised main pegmatite at depth, the Blakala prospect continues to provide encouraging signs.”
Lithium facing macro headwinds
Absent from Mr Padala’s comments was any mention of the current dynamics of the global lithium market.
First Lithium, which is exploring for the market’s favourite battery metal in the West African nation of Mali – a jurisdiction not without its risks – may have a rough year.
Lithium stocks are among the most shorted on the market right now with funds crowding the trade, per the AFR.
Core Lithium (ASX:CXO) recently announced it would suspend mining the battery metal in the NT, in short, because the price of the metal is too cheap.
Uranium investors who have long been looking at mothballed mines may be having flashbacks.
Lithium prices are down more than 80 per cent as of 11.00 am AEDT this morning, according to TradingEconomics.
This comes at the same time Benchmark Minerals Intelligence released research in late 2023 presuming the lithium price cycle to recover eventually – in 2028.
FL1 shares last traded at 44 cents.
