Up 138% in a year and 1800% in five years. Why did the Lake Resources share price soar in FY22?

The Lake Resources N.L. (ASX: LKE) share price has been struggling since the start of April. Despite this, the lithium explorer’s shares have soared in FY22.

Since market open on 1 July 2021, the Lake Resources share price surged from 33 cents to 78.5 cents on 30 June 2022. This represents a 138% gain.

Let’s take a look at how the financial year played out for Lake Resources.

Brilliant start to the financial year

The Lake Resources share price hit a high of $2.45 on 4 April. This was a mammoth 642% explosion on the share price at the start of the financial year.

Lake’s flagship project is Kachi in the Catamarca Province in Argentina. The company has ambitions to become a leading global producer of high-purity lithium.

On 7 July 2021, Lake announced drilling was underway at the Kachi project. The company stated the aim was to double production from the site. In late July, Lake offered eligible shareholders bonus options.

Strong quarterly results on 2 August also provided a boost to the Lake Resources share price. During the quarter, Lake garnered interest from six major banks willing to fund the Kachi project.

In late December, Lake advised drilling supported a doubling of lithium carbonate production to 50,000 tonnes per annum:

Argentina continues to be one of the few locations where lithium production can increase to assist the
significant supply gap to increasing demand.

On 14 February, Lake revealed it would fast-track three lithium projects in Argentina. These are the Olaroz, Cauchari and Paso projects. Lake set a target of 100,000 tonnes of high purity lithium by 2030 from these projects.

Tough few months to end FY22

Lake shares plummeted nearly 68% between market close on 4 April and 30 June. Between close of trading on 16 June and 23 June alone, the company’s share price shed 58%. On 20 June, news emerged that North America managing director Steve Promnitz would step down after setting up “Lake’s dominant position in Argentina”. Stu Crow was appointed executive chair for six months to manage the transition to a new CEO, board, and set up a North American presence. Lake said:

We are now establishing a North American presence to serve our off-take customers, continue to
work with our US-based technology partner, and engage capital markets.

Also potentially impacting Lake shares was a note from Goldman Sachs predicting lithium carbonate and spodumene concentrate prices to decline from 2023. Goldman predicted a long-term average of US$11,500 per tonne for lithium carbonate and US$800 per tonne for spodumene concentrate.

In more positive news, Lake Resources was added to the ASX 200 at the start of June. The company also appointed Citi and JP Morgan to coordinate debt financing for the Kachi project. On 11 April, Lake signed a non-binding agreement with the Ford Motor Company to negotiate lithium offtake for the project.

Lake has a goal of producing 100,000 tonnes per annum of lithium by 2030.

Lake Resources share price recap

At the current share price of 79 cents, the Lake Resources share price has soared 129% in a year. Although it has lost nearly 22% year to date. In the past month, Lake shares have leapt 45%, while they are down almost 2% in a week.

In the past five years, Lake shares have returned a mammoth 1,800% boost to shareholders.

The post Up 138% in a year and 1800% in five years. Why did the Lake Resources share price soar in FY22? appeared first on The Motley Fool Australia.

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More reading

• The Lake Resources share price plummeted 49% in June. Here’s why
• These were the worst performing ASX 200 shares in June
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why have ASX lithium shares had such a lousy month in June?
• Here are the 3 most heavily traded ASX 200 shares on Wednesday

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs. 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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