The Argosy Minerals Limited (ASX: AGY) share price is falling today. This comes as the lithium miner provided an operational update on the Rincon Lithium Project.
The company holds a 77.5% interest in the Rincon Project, located in Salta Province, Argentina. The mine is situated within the so-called ‘lithium triangle’ – the world’s dominant lithium production source.
At the time of writing, Argosy shares are fetching 43.5 cents apiece, down 4.4%.
It’s worth noting that negative sentiment across the All Ordinaires (ASX: XAO) has affected the company’s shares. The Index is currently 1.81% lower
How is the Rincon Lithium Project progressing?
In its announcement, Argosy advised that 71% of the total construction works have been completed to bring the Rincon Project online.
The development of the modular 2,000 tonnes per annum of lithium carbonate production is currently on schedule and budget.
The company is aiming to achieve the first commercial production of lithium carbonate product from the next quarter.
Argosy noted that major works consist of the design phase, site construction, and plant commission works. As such, Argosy provided a snapshot of the current progress:
- The design phase works (including engineering layout) is 100% complete;
- The construction phase works is 74% complete;
- Plant commissioning works (comprising raw materials acquisition and workforce/team development) is 13% complete.
Major construction works such as building the process plant, equipment and associated installations, and expansion of the brine system have all advanced. Here’s a further view of where each of the stages are at:
- 99% of earthworks/land movements completed;
- 94% of site works completed (site camp/accommodation, laboratory and office, and other works);
- 100% of the brine system completed (pumping station and plant settling ponds);
- 72% of the process plant completed (plant equipment acquisition and plant warehouse); and
- 64% of utilities and associated services (vapour system, communication system and ancillary services).
Argosy hopes to expand the 2,000tpa of lithium carbonate to a 12,000tpa project development.
It believes that with lithium prices rising along with tightening market supply and demand conditions, potential off-take arrangements will become more attractive. This could have a profound impact on the Argosy share price in the near-term future.
Argosy managing director Jerko Zuvela touched on the company’s latest developments, saying:
The company’s Puna operations team continues with construction and development works progress at our Rincon Lithium Project, as we move closer to commencing the 2,000tpa lithium carbonate production operations.
The lithium market remains very positive and lithium carbonate prices may allow very lucrative product sales revenues. This is providing strong and additional interest from major groups in our project and especially our product, noting our Rincon Lithium Project will become the next commercial scale operation. Argosy’s transformation into a cashflow generator is nearing, whilst also progressing toward the next stage 12,000tpa scale operations.
About the Argosy share price
In the last 12 months, the Argosy share price has gained around 367%, with year to date up 36%.
On valuation grounds, Argosy has a market capitalisation of roughly $589 million, with 1.35 billion shares on issue.
The post Argosy share price backtracks despite ‘progress’ at Rincon appeared first on The Motley Fool Australia.
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