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Hotly watched ASX stock Sayona Mining (ASX:SYA) has sold $12M worth of shares of Toronto-listed Troilus Gold Corp to advance two key lithium assets.
Through a block trade Sayona sold off 19.2M Troilus shares at C$0.63cps with those funds “redeployed” to develop Moblan and ramp up North American Lithium (NAL).
Shares were down -2.95% in lunchtime trades. That market reaction suggests shareholders aren’t too pleased with the decision, despite Sayona’s rationale for doing so.
“The decision to sell the Troilus shareholding underscores the Company’s commitment to focus on development of the emerging Tier 1 lithium project at Moblan,” the company wrote on Friday.
That decision has been made while lithium prices remain subdued, and only one day after Citigroup released an analyst’s note stating that the current uptick in lithium prices isn’t supported by fundamentals.
In other words: Citi reckons stay bearish on lithium.
With that said, the company posted a cash balance of $158M in its latest Half Year results published back in March.
However, earnings before costs were $9M; cash from operating activities was $8M, and the company clocked a -$32M loss despite seeing maiden revenues of $118M from NAL.
“The original investment in Troilus helped facilitate the acquisition of a significant exploration package adjacent to Moblan in the Eeyou Istchee James Bay Hub and having served that purpose it is prudent to recycle the capital for other uses,” Sayona chief James Brown wrote on Friday.
“We are taking important steps to conserve operations [and] conserve cash,” the company had earlier written in its March half yearly report.
Punters may be taking note that Sayona has now sold off a sizeable stake in a gold miner while gold prices are in all-time-high territory, recently clocking US$2,400/oz, while its flagship commodity lithium remains far below the 2022 highs that made it a must-have theme for investors.
Sayona was, at one time, one of the most popular stocks to short on the ASX. Prices were 23cps in May of last year, today they’re worth 3.3cps.
The company’s market cap has subsequently hit the $300M range.
Sayona has slid down to the ninth most popular stock to short at 7.19% as of Friday April 19.
SYA shares last traded at 3.3cps.
