“You’ve got a doubling of (demand in) the industry in the next five years and you have prices that are going down,” Franklyn said. “I think we’re getting near the bottom of the market and the question is do you start to chip away at some of these good quality lithium stocks.”
There are four serious players in the lithium mining space – Pilbara Minerals (ASXLS), IGO (ASX:IGO), which owns ~25% of Greenbushes, Mineral Resources (ASX:MIN) and Liontown Resources (ASX:LTR).
MinRes and Liontown are “very good businesses” but still have debt concerns to address.
“At this point in the cycle, do you want to take on the additional risk? And our view is, I don’t think you need to,” Franklyn said.
With IGO saddled by two troublesome lithium refining plants and a nickel business that’s winding down, that makes the cashed up Pilbara the standout option for Argonaut.
“The benefit of Pilbara is it’s got net cash of about $700m and it’s very well positioned,” Franklyn said. “I’d probably put Pilbara slightly ahead of IGO.”
LTR Price at posting:
65.5¢ Sentiment: Buy Disclosure: Not Held
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LS), IGO (ASX:IGO), which owns ~25% of Greenbushes, Mineral Resources (ASX:MIN) and Liontown Resources (ASX:LTR).
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