Leo Lithium [ASX:LLL] Shares down 5% Even as Goulamina Resources Rise

Leo Lithium [ASX:LLL], spinoff of gold miner and lithium developer Firefinch [ASX:FFX], released its quarterly report for the quarter ended 31 December 2022.

Though shares were rising 8% first thing Tuesday morning, they were soon toppling 5% by the afternoon.

Leo reported considerable resources upgrade increases for its Goulamina resource base, bumping up the resource count to 142.3 million tonnes (Mt).

The Danaya Domain resource also jumped 152%.

Over the past year, LLL’s share price has bottomed 8.5%, even with a 32% increase over the last month and more than 16% in the past week alone:

ASX:LLL leo lithium stock chart


Leo Lithium’s quarterly report

Having been around since 2021, Leo has been developing the word-class project, with early-stage development underway and first production targeted for Goulamina in early 2024.

Leo notes the lithium project will be the first of its kind in West Africa, as a pure-play hard rock project. It’s a 50/50 joint venture shared with world-leading lithium chemical producer Ganfeng.

Today, the company updated its shareholders with a ‘substantial resource upgrade’, an increase for the total Goulamina resource base of 33.8 Mt, which brings its total to 142.3 Mt.

The Danaya Domain also jumped, by 152%, with an increase of 33.8 Mt, creating a total of 56.1 Mt.

Simon Hay, Leo’s Managing Director, shared his thoughts:

The December quarter was a transformational one for Leo Lithium. Only a few weeks ago we received the results from a considerable resource upgrade which exceeded our expectations, confirming the large-scale, high-grade resource at Danaya, and creating new drilling targets for the team. The results also support the possible extension of the current 23-year mine life of the Goulamina Project.

We have hit the ground running with construction activities on schedule and budget, and with the latest mobilisation of the EPCM team.’

Leo’s outlook for its Goulamina Lithium Project

Leo says these findings could result in an extension of the project’s mine life, currently calculated at 23 years.

The miner expects to ramp up activities on site, with key equipment soon to arrive. And with drilling at the NE Domain ongoing, Leo believes it will be ready to offer a resource update for H1 2023.

The lithium miner also anticipates early revenue from export of DSO (Direct Shipped Ore) in H2 FY23, with delivery of its first spodumene concentrate targeted for Q2 2024.

In regards to the share price dipping, perhaps investors have been impatient for more expedient results after receiving news of a promising boost in resource, the timeline otherwise unchanged.

Nevertheless, Mr Hay was upbeat, concluding:

With the aim of becoming West Africa’s first lithium producer, we remain on track to complete Stage 1 of Goulamina in 2024. We are working toward the goal of first spodumene production by H1 2024, alongside the accelerated revenue opportunity from our Direct Shipped Ore in 2023.’

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Mahlia Stewart

For The Daily Reckoning

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