The lithium price is looking like it is stabilising, should it maintain this price over the next week or so is a great sign for the lithium industry. Many economist have been forecasting further drops in lithium prices in november and december. Stability in the lithium price greatly reduces the risk in the industry as it shows a shift in demand which is likely to continue into a price upswing early next year. Considering Altura Mining is already producing it will greatly improve profitability.
Should the CR be fully subscribed to its likely to give the company the funds to survive the current slump in the industry. Another lithium company I am invested in MLL recently did their CR which I participated in. The BOD had full participation, should AJM BOD have full or high participation it is a great sign of company health. BOD aren't about to risk their own money on a losing horse. When looking at MLL capital raise people who participated have since gained value as the SP has risen above the raise price, AJM is highly likely to do the same. At times it was technically more beneficial to buy on market, at least in the short term however money to the company provides a lot more value since, especially if the company could fail without it.
Here is an assessment of AJM share price conducted by 4 analysts from SimplyWallSt. Their fair value assessments can be skewed at times however it is still a rough indication that the current SP is far below its real value. The timing of the CR and the nature of the CR gives long time holders the chance to average down in time for highly likely uptick in lithium prices in the new year.
AJM Price at posting:
5.8¢ Sentiment: Buy Disclosure: Held
