Why Anson Resources Ltd Jumped Higher Today

What happened to the Anson Resources Ltd share price?

At the time of writing, shares of Anson Resources Ltd [ASX:ASN] are up by 54.05%, to 5.7 cents, in today’s trading.

A recent announcement from the company is the likely cause of today’s massive surge in share value. You’ll have to forgive me for getting slightly technical for a few paragraphs. Once you have all the details, I’ll let you know what it all means in plain English…

The company announced that lithium brine concentration increased by 250% to 310ppm. The result came from the initial evaporation test work carried out on the bulk sample extracted from the Cane Creek 32-1 well in Utah, US.

Take a look at the results:

Anson table
Source: Anson Resources

What now for Anson Resources Ltd?

The bench top evaporation test work used two techniques ― evaporation in baths with heat lamps (the upper table) and vacuum evaporation (the lower table). The results exceeded those in the past, which is why the share price surged by roughly 50% at the time of writing.

Managing Director, Bruce Richardson, commented on the results:

The evaporation test work has provided the Company with a better understanding of the nature of the unique super saturated multi-mineral bearing brines at the Paradox Lithium Project assisting in the development of the design of production process which is currently underway.

The Company remains committed to fast tracking this project into production and will conduct natural evaporation test using ponds at the Cane Creek well in the immediate future to further understand these properties using the brine that was available at site from the Cane Creek well.’

This is positive news for suffering shareholders. The share price has fallen from a high of 35 cents in January. But, is 300ppm enough to produce commercial grade lithium? Normally, in my experience, you need around 500ppm to make it worthwhile for lithium brine.

But, despite its reputation among resource stock followers, grade isn’t always king.

The company is entering historical oil wells in the US, where lithium was widely known. The cost of production may be lower to produce commercial grade lithium. In other words, 300ppm may be enough for a profitable operation — especially considering the company can also sell the boron and magnesium.

So, is today’s massive share price hike justified? And are there more gains in Anson’s future?

All of this news does sound positive for the company’s shareholders, true. But more work is required. That will cost, and the company will need to raise capital. That may put pressure on the share price in the short term.

Jason Stevenson,
Resources Analyst, Markets & Money

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Jason Stevenson is Markets & Money’s resource analyst. He shares over a decade’s worth of investing and trading experience across resource stocks and commodity futures and options. He originally studied accounting and finance at Curtin University, where he was awarded a first-class honours degree. His professional background stems across high-net-worth, top tier accounting (corporate finance, tax and auditing), and sell-side equities research. Before joining the team at Markets and Money, Jason worked at boutique firms which advised fund managers and high-net-worth clients on where to invest. Whether it’s gold, crude oil, copper or an obscure metal like vanadium, you can rely on an in-depth analysis in Markets and Money. Jason also brings you extensive macro, political and geopolitical analysis from around the world. He leaves no stone unturned when it comes to telling the truth. Jason is also the lead analyst of Gold Stock Trader, a premium service for investors serious about precious metal stocks. Websites and financial e-letters Jason writes for:

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