Sayona Mining falls victim to lithium downturn amid short-selling pressure

• Sayona Mining (ASX:SYA) shares have sunk nearly 10 per cent today as low lithium prices hit the company
• The company has been one of the most heavily shorted stocks on the ASX for months alongside Pilbara Minerals (ASX:PLS)
• SYA is now launching a review to cut costs
• Shares last traded at 4 cents

Sayona Mining (ASX:SYA) is currently the fourth most shorted stock on the market, and those placing such bets are probably having a pretty good day.

The lithium price crater has claimed another victim – this time, Sayona joins Core Lithium (ASX:CXO) and others in being unable to make things work with lithium down 80 per cent YoY.

Now thrust into uncertainty is what Sayona describes as North America’s only operational hard rock lithium mine.

Sayona is downsizing its Canadian operations and now launching a review to determine just how many costs can be cut.

Canadian CEO Guy Belleau, heading Sayona’s North American ops, has “departed his role. “Sayona’s current COO will step into that now void role.

Sayona is still under the management of an interim CEO, James Brown, who today shared his view that Sayona “is well positioned to remain a strategic source of lithium for the North American market”.

A rationale we’re getting used to

Sayona wants to “optimise” its spending behaviour and conducting the review will be its JV partner.

In its own words: “The review is focusing on opportunities to reduce NAL’s cost base, manage cash flow and preserve the Québec operation’s financial sustainability in a challenging market environment.”

Fair enough.

In turn, Sayona shares were down nine per cent to 4 cents per share heading into the last two hours of trade.

This time last year, they were worth 30 cents. Some uranium landholding wouldn’t hurt at a time like this.

Short placers proven right

The news will come as something of a vindication to those who like what shorters do – and another blow to true lithium believers.

Currently, the stock has 6 ‘Buy’ ratings from a range of brokers – whether or not this number will dramatically change in the coming days remains to be seen.

Sayona has been one of the most heavily shorted stocks alongside Pilbara Minerals stretching back months.

While it’s not likely every single bet had to do with commodity pressure – many hedge funds and the like look at price to earnings ratios and other metrics of high finance – but the lithium price is definitely a big part of it.

SYA shares last traded at 4 cents.