Sayona Mining Ltd (ASX: SYA) shares are up 2.5% in early trading on Tuesday to 20.5 cents.

Today’s gains may be cold comfort to long-term investors who have watched the ASX lithium share fall 25% over the past year.

But one fundie reckons now is the time to either buy your first stake in this North American lithium and graphite developer, or do a little dollar-cost averaging if your Sayona Mining shares have lost value.

Why is this expert backing Sayona Mining shares for growth?

As reported by The Bull, Tom Bleakley of BW Equities says Sayona Mining shares are a buy.

Bleakley reasons that the company is growing its resource base in Australia and Canada “through an aggressive exploration campaign”.

Sayona reported its first lithium production at its North American Lithium (NAL) project in March. It was only 70 tonnes of spodumene concentrate though, so not a commercial amount.

The miner expects to generate its first saleable concentrate in July.

Bleakley says:

SYA recently announced commercial spodumene concentrate production had resumed at the jointly owned North American Lithium project in Quebec.

SYA is targeting annual production of 226,000 metric tonnes a year, with first commercial shipments expected in the third quarter of fiscal year 2023.

Three other analysts covering Sayona Mining shares on CMC Markets also rate the ASX mineral explorer a buy.

What’s been weighing on the share price?

Well, like all ASX lithium shares, Sayona has retreated alongside lithium commodity prices over the past year.

According to Trading Economics, the lithium carbonate price has fallen 60% since hitting a record high in November 2022. This is mainly because China shut down electric vehicle (EV) subsidies in January.

However, lithium prices appear to be rebounding following news out of Chile.

The world’s second-biggest lithium-producing country intends to nationalise its industry and take a controlling stake in all new producers.

Trading Economics analysis says this “is expected to hamper long-term output growth …”.

Since then, the lithium carbonate price has recorded its first sizeable increase since November. It rebounded to above US$26,000 per tonne and is now sitting at about US$26,400 per tonne.

During April, Sayona Mining shares lost 4.8% of their value while the ASX All Ords rose by 1.7%.

Sayona Mining actually had a lot of positive news for the market last month, but after each new announcement, the shares seemed to slip back down.

Sayona announced a “substantial rise” in the estimated pre-tax net present value (NPV) of its 75%-owned NAL project and Authier Lithium Project.

A definitive feasibility study (DFS) revealed an NPV of $2.2 billion. This represented a big increase in the project NPV compared with NAL’s pre-feasibility study (PFS) released to the market in May 2022.

The PFS gave NAL alone a $1 billion NPV.

The company also announced a major resource expansion for its Moblan Lithium Project to 51.4 million tonnes at 1.31% Li2O. This made the project “one of North America’s single largest lithium resources”.

Sayona Mining shares rose again after the company released its March quarter activities and cash flow report.

The post Down 25% in a year, why this fundie thinks you should buy Sayona Mining shares now appeared first on The Motley Fool Australia.

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More reading

• ‘Buying opportunity’: 2 ASX 200 mining shares ripe to snap up now
• Here are the 10 most shorted ASX shares
• The CEO has sold 4.5 million Sayona Mining shares in the past week. Is this a red flag?
• Why did the Sayona Mining share price sink 5% in April?
• Here are the 3 most heavily traded ASX 200 shares on Monday

Motley Fool contributor Bronwyn Allen 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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