Why is the Latin Resources share price leaping 30% today?

In a mixed day of trade across the ASX, the Latin Resources Ltd (ASX: LRS) share price is soaring on Monday.

For context, the market’s biggest mover is the S&P/ASX 300 Metals and Mining Index (ASX: XMM), up 2.16% today.

And while Latin Resources shares don’t fall under that index due to the company’s modest market capitalisation, they’re storming ahead.

In fact, at the time of writing, shares in the lithium explorer are 30.67% higher to 9.8 cents.

Let’s take a look at what’s powering the company’s shares during late afternoon trade.

What’s driving Latin Resources shares forward?

While the company hasn’t released any announcements to the market since its quarterly activities report on 28 July, investor sentiment is growing.

Latin Resources highlighted a number of positive updates that occurred in the June 2022 quarter. This included its assay results from drilling at the Salinas Lithium Project as well as securing the highly prospective Bananal Valley district in eastern Brazil.

The company held $34.25 million in cash and investments as at 30 June 2022 – enough to set up its immediate future through to the definitive feasibility study (DFS).

Latin Resources raised $35 million in new equity through a share placement anchored by Canadian cornerstone investor Electrification and Decarbonization AIE LP Fund.

It seems investors are becoming increasingly confident the company is making progress to develop its assets amid a rising battery metals market.

It is evident lithium continues to be highly sought-after as a critical mineral for electric vehicles and battery storage.

As reported by Trading Economics, the price of lithium carbonate has accelerated over the past year by an astonishing 420%.

Shares in ASX lithium peers Sayona Mining Ltd (ASX: SYA) and Lake Resources N.L. (ASX: LKE) are up 12.86% and 11.83% respectively at the time of writing.

Latin Resources share price snapshot

Over the last 12 months, the Latin Resources share price has returned gains of 137% to investors.

Based on today’s price, Latin Resources is valued at roughly $184.8 million.

The post Why is the Latin Resources share price leaping 30% today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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