Tag: Motley Fool

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a small gain. At the time of writing, the benchmark index is up 0.3% to 6,808.5 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping:

Flight Centre Travel Group Ltd (ASX: FLT)

The Flight Centre share price is down almost 4% to $16.97. This morning the team at Credit Suisse responded to the travel agent’s latest update by putting an underperform rating and $14.00 price target on its shares. Elsewhere, Morgans has warned that Flight Centre’s earnings may not recover to pre-COVID levels until FY 2025.

Iress Ltd (ASX: IRE)

The Iress share price is down 9% to $10.71. Investors have been selling this financial technology company’s shares after it announced that its CEO is leaving. Iress’ CEO, Andrew Walsh, is retiring at the start of October after 21 years with the company and 13 years as its leader. Walsh will remain with Iress as a consultant until the end of January 2023. He will be replaced by Marcus Price.

Nitro Software Ltd (ASX: NTO)

The Nitro share price has crashed 26% to $1.20. This follows the release of the document productivity software company’s quarterly update. Although Nitro delivered strong growth during the first half, it has cut its guidance for the full year. This is because management has decided to balance its pursuit of annual recurring revenue growth while accelerating its cash flow breakeven goals.

Perseus Mining Limited (ASX: PRU)

The Perseus Mining share price is down 3.5% to $1.63. This morning this gold miner released its fourth quarter update. Although Perseus delivered production and costs in line with its guidance in FY 2022, investors appear disappointed with the company’s FY 2023 half-year guidance. Management is expecting its all-in sustaining cost (ASIC) to increase 5% to 15% during the first half.

The post Why Flight Centre, Iress, Nitro, and Perseus shares are dropping today appeared first on The Motley Fool Australia.

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More reading

• ASX 200 midday update: Iress sinks on CEO exit, Flight Centre shares descend
• Iress share price drops 9% on news of CEO departure
• Why is the Nitro share price crashing 29% on Tuesday?
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor James Mickleboro 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 recommended Flight Centre Travel Group Limited and Nitro Software Limited. 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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The BetaShares Global Cybersecurity ETF (ASX: HACK) is not among the most popular exchange traded funds (ETFs) on the ASX. But it has certainly drawn some eyeballs in recent years, thanks in part to some impressive performance metrics.

This ETF, which, as its name implies, covers a basket of cybersecurity companies from around the world, has been impressive, no way around it. As of 30 June, the HACK ETF has averaged an annual average return of 16.38% over the past five years. That’s despite it taking a 19.08% haircut over the first six months of 2022.

HACK has been able to achieve these kinds of turns by holding companies that have proven to be winners over the past few years. These include US cybersecurity companies like CrowdStrike Holdings Inc, Zscaler Inc, Okta Inc, and Palo Alto Networks Inc. But HACK also holds companies hailing from countries as diverse as Israel, France, India, and South Korea.

So we know that the HACK ETF has been able to give investors some impressive capital gains over recent years. But what of dividend income? Does the BetaSahres Global Cybersecurity ETF pay dividend distributions?

Does the BetaShares Global Cybersecurity ETF pay dividend income?

Yes, it does. Like many ASX ETFs, the HACK ETF tends to pay out a dividend distribution every 12 months. Thus, investors have only received one distribution over the past year. That was the 68.075 cents per unit payment that investors received on 18 July.

This distribution was a lot weightier than the 29.481 cents per unit payment investors enjoyed back in July 2021.

On the current HACK unit price of $8.33 (at the time of writing), this latest payment gives this ETF a rather hefty trailing dividend distribution yield of 8.17%.

So all in all, investors have enjoyed both capital gains and dividend income from the HACK ETF in recent years. No doubt investors will hope these kinds of returns keep flowing in the years ahead. But we shall have to wait and see what happens.

The BetaShares Global Cybersecurity ETF charges a management fee of 0.67% per annum.

The post Does the HACK ETF pay dividends? appeared first on The Motley Fool Australia.

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More reading

• 3 high quality ETFs for ASX investors to buy today
• Here’s why I think this cybersecurity ETF is a top buy in July
• 2 beaten down ETFs for ASX investors to buy
• 2 top ETFs for ASX growth investors to buy in July
• 3 excellent ETFs for ASX investors to buy in July

Motley Fool contributor Sebastian Bowen 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 BETA CYBER ETF UNITS and CrowdStrike Holdings, Inc. The Motley Fool Australia has positions in and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia has recommended CrowdStrike Holdings, Inc. 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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Top broker Macquarie says the consensus for 10% earnings per share (EPS) growth for S&P/ASX 300 Index (ASX: XKO) shares “looks optimistic”.

Not only that, but a 10% fall seems more likely based on the past three recessions in the United States.

According to reporting in The Australian today, Macquarie’s Australian equity strategist, Matthew Brooks says the 2H FY22 results in the upcoming earnings season may surpass expectations.

He says this is based on US results beating expectations so far, as well as Australian companies reporting good overall conditions.

But he reckons there is risk in the next financial year due to macroeconomic issues like rising interest rates. Therefore, he questions whether the ASX 300 earnings consensus estimate is possible.

FY22 is fine but the risks lie in FY23

Brooks foresees the US Federal Reserve and Reserve Bank of Australia continuing to raise interest rates to slow demand and bring inflation under control.

Meanwhile, disruptions caused by COVID-19 continue to bring down productivity around the world.

Brooks said he expects to see free cash flow pressured by rising costs, higher interest expenses, and higher working capital.

ASX 300 companies might get conservative with guidance

In such circumstances, Brooks reckons companies are more likely to be conservative with their guidance.

With the earnings season almost upon us, Brooks says some companies “may limit their forward looking comments until we get into AGM season.”

Brooks said: “While negative EPS revisions picked up in June – to minus 27% – and July (to minus 25%), this is still half the EPS downgrades seen near a trough.”

A “sustainable low” in the market “requires a trough in the cycle or a shift to easing by central banks”.

The post Why Macquarie warns consensus earnings growth for ASX 300 shares in FY23 is ‘optimistic’ appeared first on The Motley Fool Australia.

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More reading

• 2 ASX 300 shares rocking new 52-week highs on Monday
• Is Adairs considered an ASX 300 dividend share?
• I think these 2 ETFs are long-term buys
• Expert names ASX share that could fly 67% higher
• How did the Vanguard Australian Shares Index ETF perform in June?

Motley Fool contributor Bronwyn Allen has positions in Macquarie Group Limited. 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 recommended Macquarie Group Limited. 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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The Arafura Resources Ltd (ASX: ARU) share price is pushing higher in afternoon trade on Tuesday.

At the time of writing, the rare earths share is swapping hands at 36 cents apiece on no news, a 4.35% jump on the day.

This brings Arafura’s gains to around 25% in the new financial year, capping off a solid performance in July.

What’s up with the Arafura share price?

It’s been a quiet month for the company. That was until it released its quarterly activities report yesterday.

In the report, Arafura outlined that NdPr [neodymium and praseodymium] pricing continued to realise strong performance at US$139/kg to close the quarter.

It also highlighted a memorandum of understanding (MoU) with Hyundai Motor Company.

The terms would be for an offtake agreement of 1,000-1,500 tonnes per annum of NdPr Oxide over a seven-year term. It would commence in 2025 if it goes ahead.

The Arafura share price is also rated as a buy from analysts at Bell Potter. The broker is attracted to the company’s Nolans rare earth project.

It also noted the MoU with Hyundai Motor Company in its notes, suggesting the company could potentially provide up to 8% of global supply into the permanent magnet market.

In addition, the S&P/ASX 300 Metals and Mining Index (ASX: XMM) has risen in July despite weakening substantially at the back end of June.

Both Arafura’s and the index’s returns for the year to date are seen below. It’s also worth noting that in the last 12 months, the Arafura share price has gained more than 173%.

The post Why has the Arafura share price jumped 25% so far in July? appeared first on The Motley Fool Australia.

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More reading

• Broker names 2 ASX mining shares to buy in FY23
• Mineral Monday: What you need to know about rare earths and which ASX shares are cashing in on them

Motley Fool contributor Zach Bristow 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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a gain. At the time of writing, the benchmark index is up 0.3% to 6,808.5 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are rising:

Myer Holdings Ltd (ASX: MYR)

The Myer share price is up 21% to 40 cents. Investors have been buying this department store operator’s shares following the release of a strong trading update. Myer has been performing very positively during the second half. So much so, it expects to report a net profit of between $55 million and $60 million in FY 2022. This will be up 86% to 103% on FY 2021’s result.

South32 Ltd (ASX: S32)

The South32 share price is up 4% to $3.71. Investors have been buying this mining giant’s shares after brokers responded positively its latest quarterly update. One of those brokers was Goldman Sachs, which has reiterated its conviction buy rating with a $4.90 price target. Elsewhere, the team at Citi has retained its buy rating with a $4.90 price target and Macquarie has held firm with its outperform rating with a $5.90 price target.

Vulcan Energy Resources Ltd (ASX: VUL)

The Vulcan share price is up 5% to $7.45. This morning the lithium developer released an announcement relating to its Zero Carbon Lithium Project. Vulcan revealed that it has received approval to carry out a 3D seismic survey from eight local councils across its license area in the German state of Rhineland-Palatinate. In addition, Vulcan has been granted a new exploration license that increases its license area in the Upper Rhine Valley Brine Field by a sizeable 277km2.

Zip Co Ltd (ASX: ZIP)

The Zip share price is up 19% to $1.02. This is despite there being no news out of the buy now pay later (BNPL) provider on Tuesday. Though, it is worth noting that a number of BNPL shares are charging notably higher this afternoon.

The post Why Myer, South32, Vulcan, and Zip shares are racing higher appeared first on The Motley Fool Australia.

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More reading

• Why are ASX buy now, pay later shares rocketing higher today?
• Zip share price soars 24% to break $1 mark for first time in 2 months
• Myer share price rockets 23% as 2022 profit expected to double
• ASX 200 midday update: Iress sinks on CEO exit, Flight Centre shares descend
• Why is the Vulcan share price charging higher today?

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The S&P/ASX 300 Index (ASX: XKO) has slipped in line with the more often quoted S&P/ASX 200 Index (ASX: XJO) so far this year.

Both indexes have slumped close to 11% since the start of 2022, and they’ve dragged some of the market’s favourite shares down with them.

But such a selloff has presented a buying opportunity for Perennial Partners.

Let’s take a look at the ASX 300 shares the fundie has snapped up following notable tumbles.

5 embattled ASX 300 shares in this fundie’s cart

The Perennial Value Australian Shares Trust bought into these big-name ASX shares last month following significant price tumbles:

BHP Group Ltd (ASX: BHP)

Shares in the mining giant are down 10% year to date amid volatile commodity prices and the divestment of the company’s petroleum business. They’ve also fallen 28% from their April peak.

But BHP’s future looks to be brighter. The fund believes demand for commodities will stay strong in the second half amid Chinese stimulus measures.

Macquarie Group Ltd (ASX: MQG)

The share price of this financials’ favourite has slipped 18% in 2022 and is currently trading 19% lower than its January peak.

The stock has been battered amid rising inflation, interest rate hikes, and a $400 million capital raise.

James Hardie Industries plc (ASX: JHX)        

Stock in the building products producer has tumbled 39% from its peak in early January.

James Hardie has likely also been hampered by rising inflation, which could spell bad news for the housing market. However, Perennial isn’t the only fund seemingly bullish on James Hardie.

MA Financial Group Ltd (ASX: MAF)

The ASX 300 financial services group’s share price has fallen 38% in 2022 and is currently 42% lower than its January peak.

Perennial noted it sees notable upside (possibly between 50% and 100%) in many of its small-cap holdings, including MA Financial, over the medium term.

QBE Insurance Group Ltd (ASX: QBE)

Finally, the insurer’s stock has slipped 10% from its February peak.

The fund believes QBE is a defensive stock, tipping its earnings to perform well despite rising interest rates and a slower growth environment.

And another thing …

Perrenial also swapped some of its holdings in the Lottery Corporation Ltd (ASX: TLC) for Tabcorp Holdings Limited (ASX: TAH) as it sees more upside in the parent company.

The fund has performed relatively in line with the ASX 300 over the three months ended June. Looking to the longer term, however, it’s significantly outperformed the market. It has slipped just 3% compared to the index’s near-7% tumble over the prior 12 months.

The post 5 ASX 300 shares this fundie has been buying at bargain prices appeared first on The Motley Fool Australia.

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More reading

• Expert prediction: 3 ASX 200 shares that can ‘do well’ in volatile times
• Here’s why I think the BHP share price is a buy right now
• How might China’s $6b Mineral Resources Group impact the iron ore price?
• What’s the outlook for the Macquarie share price in FY23?
• ‘We remain cautious’: Could the BHP share price be heading south?

Motley Fool contributor Brooke Cooper 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 recommended Macquarie Group Limited. 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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The Qantas Airways Ltd (ASX: QAN) share price is in the red on Tuesday.

Qantas shares are down 1.85% at the time of writing, currently trading at $4.505 apiece. In contrast, the S&P/ASX 200 Index (ASX: XJO) is 0.19% higher.

Let’s take a look at what is going on at Qantas.

What’s going on at Qantas?

Qantas shares are falling today, but they are not alone in the travel space. The Webjet Ltd (ASX: WEB) share price is down 2.16% today, while Flight Centre Travel Group Ltd (ASX: FLT) shares are 4.43% lower.

In today’s news, it has emerged a baggage handling company used by Qantas and other airlines has warned of “quite a few incidents” that have resulted in “aircraft damage” and “serious damage” to ground support equipment, news.com.au reported. Ground workers for Dnata are reportedly considering strike action and have been warned to “politely but firmly dismiss” any “pressure from airline reps” to cut corners.

However, a Qantas spokesperson told the publication the airline will work with Dnata to reduce any strike disruption.

Meanwhile, Monash University professor Greg Bamber has described Qantas’ current woes as “a debacle”, according to an ABC report. He added:

Some would say we’re getting close to the tipping point.

On the one hand Qantas advertises itself as being a full-service airline that gives premier service to its loyal and long-term frequent flyers. On the other, Qantas is giving priority to a different set of stakeholders – trying to maximise profits and prioritise the interests of shareholders and executives at the expense of its staff and its customers.

Bamber said “airlines are struggling around the world” and the “aviation industry is in chaos”, highlighting rising fuel prices due to the Ukraine war. He said:

This is more of a perfect storm [than previous difficulties that have faced Qantas] because we’ve got things happening at the same time.

Qantas share price snapshot

The Qantas share price has slipped nearly 2% in the past year, while it has lost 10% year to date.

For perspective, the ASX 200 has fallen more than 8% in the last 12 months.

Qantas has a market capitalisation of about $8.5 billion based on the current share price.

The post ‘At tipping point’: Qantas share price slides as chaos continues appeared first on The Motley Fool Australia.

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More reading

• Why are ASX 200 travel shares having such a stellar session?
• Why are Flight Centre, Webjet, and other ASX travel shares sinking today?
• UBS tips Qantas share price to surge 40%
• Qantas share price dips amid record delays
• Will the Qantas share price fly higher in FY23?

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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and Webjet Ltd. 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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The Rio Tinto Limited (ASX: RIO) share price is pushing higher on the eve of its half-year results release.

At the time of writing, the mining giant’s shares are up over 2% to $99.20.

Judging by its strong showing, investors appear optimistic that Rio Tinto is going to impress with its half-year update tomorrow.

What is the market expecting from Rio Tinto’s half-year results?

While the market is expecting a strong result from Rio Tinto, it won’t be as strong as this time last year.

According to a note out of Goldman Sachs, both its analysts and the market are expecting the miner to report a reduction in earnings year on year. Here’s a summary of what the market is expecting

• Revenue
  • Goldman Sachs: US$29,655 million
  • Consensus: US$30,785 million
• Underlying EBITDA
  • GS: US$15,671 million
  • Consensus: US$16,813 million
• Dividends per share
  • GS: US$3.18 per share
  • Consensus: US$3.30 per share
• Special dividends per share
  • GS: US$0.50 per share
  • Consensus: US$0.67 per share

What will the drivers of the result be?

Goldman Sachs is forecasting underlying EBITDA of US$15,671 million, which would be down 25.5% over the prior corresponding period.

This is expected to be driven largely by softer earnings from the key iron ore segment. The broker has pencilled in iron ore EBITDA of US$10,176 million and underlying iron ore earnings of US$6,273 million. This will be a 37% and 39% decline, respectively, over the prior corresponding period.

Offsetting some of this will be the miner’s aluminium business. Goldman is expecting a 51% increase in aluminium EBITDA to US$2,912 million and an 85% increase in underlying earnings to US$1,706 million for the period.

Is the Rio Tinto share price good value?

While buying before a results release can be very risky, Goldman Sachs certainly sees plenty of value in Rio Tinto’s shares at the current level.

Despite forecasting earnings below consensus estimates, the broker has a buy rating and $124.10 price target on the miner’s shares. This implies a potential return of 25% for investors over the next 12 months before dividends.

The post Rio Tinto share price climbs ahead of tomorrow’s earnings update. Here’s what to watch appeared first on The Motley Fool Australia.

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More reading

• Guess how much Rio Tinto shares have paid in dividends over the last 5 years
• Why Leo Lithium, Rio Tinto, Santos, and Woodside shares are dropping today
• Rio Tinto share price stumbles following near-$1b ATO settlement
• Top brokers name 3 ASX shares to buy today
• ‘We have clearly seen the peak’: Sector veteran gives earnings season warning for ASX mining shares

Motley Fool contributor James Mickleboro 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The S&P 500 has delivered impressive annual average returns over the past decade and investors should consider using this year’s sharp stock market decline as an opportunity to add some great companies to their portfolios at attractive valuations. Nvidia (NASDAQ: NVDA) and Applied Materials (NASDAQ: AMAT) are two such companies that are worth buying now.

Both tech stocks have generated healthy returns for investors over the past several years. A $100,000 investment in Applied Materials at the beginning of 2014 was worth roughly $1 million at the end of 2021, assuming the dividends were reinvested. Nvidia, on the other hand, generated much bigger returns, turning $100,000 into roughly $7.8 million over the same period.

The growth drivers that these companies are sitting on could help them deliver such eye-popping returns over the next eight years as well. Let’s see why Nvidia and Applied Materials have the potential to make more investors into millionaires by 2030.

1. Nvidia

Nvidia stock is up 20% so far this month, but shares of the graphics card specialist are still down 40% for the year. Investors who have been waiting to buy this tech stock may want to act while Nvidia’s valuation is still at a relatively attractive level.

The chipmaker is trading at 47 times trailing earnings and 33 times forward earnings estimates. Those multiples represent a discount to its five-year average price-to-earnings ratio of 58. The stock is tempting because the company is sitting on bigger catalysts as compared to 2014.

The company reported $4.1 billion in revenue in fiscal 2014, which ended on Jan. 26, 2014, when it was mainly known for selling graphics cards for powering personal computers (PCs). Nvidia had started making moves in the data center market at that time, and that has paid off handsomely over the years.

In the year ended Jan. 30, 2022, the company reported revenue of $26.9 billion, with the data center business producing $10.6 billion of the total

The good part is that the data center business isn’t done growing yet. Sales of data center accelerators such as CPUs (central processing units), GPUs (graphics processing units), and DPUs (data processing units) are expected to grow at 40% a year through 2030, generating nearly $156 billion in annual revenue at the end of the forecast period.

Nvidia is well placed to take advantage of this massive opportunity thanks to its solid market share in data center GPUs. More importantly, the company is all set to expand its addressable market in data centers when it enters the server processor market with its Grace CPUs next year, which have already been selected by several customers for deployment from the first half of 2023.

The data center market alone could turn out to be a massive tailwind for Nvidia through 2030 and give its top and bottom lines a big boost. Analysts are expecting the company’s earnings to grow at an annual pace of 23% for the next five years, but it won’t be surprising to see it clock faster growth for a longer time, thanks to opportunities in the data center and other emerging areas. The stock could rocket over the next eight years.

2. Applied Materials

Semiconductor stocks have taken a beating in 2022, with the PHLX Semiconductor Sector index down 27% so far this year. However, the demand for chips remains healthy thanks to the growing usage of chips in several applications ranging from smartphones to data centers to gaming consoles to cars and even factories.

Market research firm IDC forecasts a 13.7% increase in semiconductor sales this year to $661 billion. That’s significantly higher than the industry’s 2013 revenue of $305 billion. The semiconductor industry is expected to generate $1 trillion in annual revenue by 2030, according to McKinsey. Other third-party estimates peg the size of the semiconductor market at $1.2 trillion by 2030.

As such, the demand for the semiconductor manufacturing equipment that Applied Materials sells should remain strong in the long run. The company is already benefiting from a spike in capital spending by chipmakers, as evident from the 16% year-over-year increase in its revenue in the first six months of fiscal 2022, which started in November.

Analysts are upbeat about the company’s prospects and expect its earnings to increase at a compound annual rate of nearly 14% for the next five years. Even better, Applied Materials sports a dividend yield of 1.1%. While that may not look like much, it is worth noting that the company has increased its dividend for the past five years and has a payout ratio of just 12%. This suggests that Applied Materials could keep increasing its dividend. And the healthy prospects of the market it operates in make it look like the stock is capable of replicating its past gains.

Throw in the company’s valuation, and it is easy to see why buying Applied Materials stock looks like a no-brainer right now. The stock trades at just 13.7 times trailing earnings — a nice discount to the S&P 500’s multiple of 20. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 2 Nasdaq growth stocks that could turn $100,000 into $1 Million by 2030 appeared first on The Motley Fool Australia.

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Harsh Chauhan 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 Nvidia. The Motley Fool Australia has recommended Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Dart Mining NL (ASX: DTM) shares are surging heading this afternoon.

The ASX lithium share closed yesterday at 6.2 cents each and hit an intraday high of 8.4 cents late morning, a 35% gain. At the time of writing, the Dart Mining share price has settled at 7.3 cents apiece, a still healthy rise of 17.74%.

Here’s what’s stoking investor interest in the microcap lithium stock today.

Why is this tiny ASX lithium share surging today?

The Dart Mining share price is rocketing after the company reported it’s entered into an earn-in agreement for its Dorchap Lithium Project with Sociedad Química y Minera de Chile (NYSE: SQM). The agreement was reached with its wholly owned subsidiary SQM Australia Pty Ltd.

SQM is a global lithium miner and producer, and holds a 50/50 joint venture with Wesfarmers Mt Holland Lithium Project, located in Western Australia.

According to the agreement with the tiny ASX lithium share, SQM has the right, but not the obligation, to sole fund exploration expenditure totalling $12 million over the next six years.

During the first earn-in period, SQM could earn an initial 30% interest in the Dorchap Lithium Project, located in Victoria, by sole funding exploration expenditure of $3 million over the next three years.

During the second and third earn-in periods, which run for a combined additional three years, SQM could earn another 40% interest in the lithium project by funding another $9 million in exploration activities.

SQM can opt to enter into a joint venture agreement with the ASX lithium share at any point after it’s earned its initial 30% interest in Dorchap on terms yet to be agreed

Dart Mining will be the initial manager of the project during the earn-in phase.

Commenting on the agreement, Dart Mining chairman James Chirnside said:

The collaboration with SQM brings world class technical and operational expertise to a very worthy exploration target. Dart Mining was the first exploration company to discover Lithium on the East Coast of Australia in 2016.

Through Dart’s persistence and early exploration efforts, the project is finally getting the recognition it deserves. We have a clear pathway for project exploration through to the next stage, and our partnership with SQM will ensure that we are able to both attain that objective and enhance our knowledge and understanding of the project within an accelerated timeframe.

Dart Mining share price snapshot

Dart Mining’s big intraday leap today erases much of the losses sustained by the ASX lithium share in 2022.

The Dart share price is now down around 6% year to date compared to a loss of 11% posted by the All Ordinaries Index (ASX: XAO).

The post Guess which tiny ASX lithium share is rocketing 35% on Tuesday appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben 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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