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The Castillo Copper Ltd (ASX: CCZ) share price has surged 47% at the time of writing after the company released exploration results from its Big One deposit in Queensland. 

About Castillo Copper 

Castillo Copper is an Australian-based explorer focused on copper across Australia and Zambia. The company is embarking on a strategic transformation to morph into a mid-tier copper producer. Castillo currently has four properties: 

• Mt Oxide project in the Mt Isa copper-belt district, north-west Queensland, which delivers significant exploration upside through having several high-grade targets 
• Four high-quality prospective assets across Zambia’s copper-belt, which is the second largest copper producer in Africa 
• A large tenure footprint proximal to Broken Hill’s world-class deposit that is prospective for zinc, silver, lead, copper and gold 
• Cangai Copper Mine in northern New South Wales, which is one of Australia’s highest grading historic copper mines.

 The Big One deposit 

One of Castillo’s priorities has been developing its Mt Oxide Project, especially progressing drilling campaigns at the Big One deposit. 

Today, the company announced “game changing assays”, which significantly extend the known mineralisation at the high-grade Big One deposit. This discovery pushed the Castillo share price up by 47% to 6.5 cents at the time of writing. 

Castillo Copper’s Managing Director Simon Paull commented:

We are delighted to receive assays of this calibre, especially with global copper supplies tight. There is now compelling evidence Big One Deposit is a shallow, high-grade copper-cobalt system that can potentially scale further. The Board is now ramping up forward development work and the modelling of a maiden JORC compliant resource.

There is an expected pause in drilling activities due to the commencement of the wet seasons across northern Australia. However, the company announced a geophysics campaign is being formulated to identify new bedrock conductors and potential test-drill targets. 

In addition, the board has instructed the Castillo geology team to commence modelling a JORC compliant resource based on available historic and fresh data. If the outcome of the geological modelling is positive, then the board expects to commence applying for a fresh mining lease.

The Castillo share price is up by 170% on this time last year. On current prices, Castillo has a market capitalisation of $65.92 million.

More reading

• 3 ASX dividend shares with yields above 4%
• Why did the Total Brain (ASX:TTB) share price jump 20% higher today?
• ASX 200 down 0.4%: Afterpay tumbles, bank shares lower, gold miners crash
• The latest ASX “buy” recommendations from top brokers
• 7 ASX shares to buy for 2021

Motley Fool contributor Lina Lim 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 Bruce Jackson.

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There are some ASX dividend shares out there with yields of more than 4%.

The official Reserve Bank of Australia (RBA) interest rate is now just 0.25%, which impacts the savings rates on bank accounts.

Here are some examples of businesses that have dividend yields of more than 4%:

Rural Funds Group (ASX: RFF)

Rural Funds is an agricultural real estate investment trust (REIT) which owns a portfolio of different farm properties including cattle, almonds, macadamias, vineyards and cropping (cotton and sugar). It has a total of 61 properties with a weighted average lease expiry (WALE) of 10.9 years.

The ASX dividend share aims to grow its distribution by 4% per annum for investors. The REIT plans to turn to some cattle and sugar cane properties to macadamias, a higher and better use. Planting 5,000 hectares of macadamias will take approximately five years. Discussions for the lessees for the orchards is ongoing. The business said that it has the capacity to fund the initial macadamia developments while importantly continuing to fund unitholder distributions.

Rural Funds has provided guidance that the distribution will be higher by 4% to 11.28 cents per unit in FY21.

At the current Rural Funds share price of $2.57, this equates to a distribution yield of 4.4%. However, the adjusted net asset value (NAV) per Rural Funds unit is $1.94. The pro forma gearing is 28.3%.

Brickworks Limited (ASX: BKW)

Brickworks is a diversified ASX dividend share with multiple exposures to the real estate industry.

It’s well known for its building products divisions. It manufactures and sells a variety of items like bricks, paving, masonry, precast and roofing. Brickworks is the market leader of bricks across Australia.

The company also has a sizeable presence in the US. It acquired three brickmakers in the United States, including Glen Gery, making it the market leader in the north east of the US.

The Australian division is seeing a recovery of earnings as the economy rebounds, however the US division is still suffering.

Brickworks hasn’t cut its dividend for over 40 years. That dividend is supported by two sources of cashflow.

The first is its holding of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares, an investment conglomerate that has grown its dividend every year since 2000 thanks to its diversified and defensive portfolio. Its largest investments include TPG Telecom Ltd (ASX”: TPG), Brickworks, New Hope Corporation Limited (ASX: NHC) and Australian Pharmaceutical Industries Ltd (ASX: API).

The other Brickworks division is its property trust. There’s a joint venture with Goodman Group (ASX: GMG). The joint venture owns industrial properties which are leased to quality tenants. It will soon have Amazon and Coles Group Ltd (ASX: COL) as tenants with two large distribution warehouses being built. This will increase the property trust rental profit distributions by at least 25%.

At the current Brickworks share price it has a grossed-up dividend yield of 4.4%.

Wesfarmers Ltd (ASX: WES)

Wesfarmers is a diversified business that has a number of retail businesses including Bunnings, Officeworks, Catch, Kmart and Target.

The ASX dividend share continues to report growth despite the COVID-19 disruptions. In the first four months of FY21 to October 2020, Bunnings total sales went 25.2%, Kmart sales went up 3.7%, Target sales declined 2.2%, Catch sales grew 114.4% and Officeworks sales went up by 23.4%. Overall, online sales were up 98% excluding the Melbourne online sales.

Its industrial businesses continue to recover from the effects of COVID-19 as well.

At the current Wesfarmers share price, it has a trailing grossed-up dividend yield of 4.7%.

More reading

• 2 quality ASX dividend shares to buy next week
• These ASX dividend shares have 10% and 4% yields
• 3 top ASX dividend shares to buy
• 2 blue chip ASX dividend shares to buy
• ASX 200 drops 1.1%

Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, RURALFUNDS STAPLED, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Total Brain Ltd (ASX: TTB) share price shot up 20% this morning, after the company told the market its annual recurring revenue (ARR) has increased 67% since December 2019.

At the time of writing, the Total Brain share price has retreated slightly, trading up 13.5% at 33.5 cents.

What’s moving the Total Brain share price today?

In addition to the ARR increase, Total Brain says the number of potential new clients in its sales funnel has also increased since December 2019, up 58%.

The company attributes this to its launch of the Mental Health Index: U.S. Worker Edition, which generated 10 new clients in the last 5 months.

By comparison, 5 companies were in the pipeline a year ago, which resulted in 2 paying clients for a total of $510,000 in ARR.

However, Total Brain reported that COVID-19 had caused significant setbacks with those sales already in the pipeline, including one with IBM (NYSE: IBM).

The contract with IBM – which was for the deployment of its Mental Fitness 360 and GRIT platforms – is now in the final stages of the contract process, after being delayed since December 2020. The initial contract rollout is for approximately 25,000 users, representing $570,00 in ARR.

The company also says that it has spent significant resources throughout 2020 on improving its products, which is a prerequisite for scaling user numbers and ARR.

Priorities in 2021

Total Brain also updated the market on its 2021 priorities. The company said in the coming months it will focus on aligning its sales team against client pipelines that can lead to immediate revenue conversion.

Total Brain also plans to double down on the momentum made through its Mental Health Index. This will include digital marketing, as well as events such as speaking opportunities and 1-1 prospect meetings.

How has the Total Brain share price performed

Total Brain describes itself as a “mental health and brain performance self-monitoring and self-care platform”. It was founded in 2002 in San Francisco, California by neuroscientist Dr Evian Gordon. 

The Total Brain share price has lost around 48% of its value over the past 12 months. This is despite the company reporting a 20% increase in revenue on the prior quarter in its last update in October.

Total Brain commands market valuation of $32 million.

More reading

• ASX 200 down 0.4%: Afterpay tumbles, bank shares lower, gold miners crash
• The latest ASX “buy” recommendations from top brokers
• 7 ASX shares to buy for 2021
• Why Costa, Monash IVF, Newcrest, & Xero shares are dropping lower
• Why the Lucapa Diamond (ASX:LOM) share price is sparkling

Motley Fool contributor Eddy Sunarto 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 Bruce Jackson.

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At lunch on Monday the S&P/ASX 200 Index (ASX: XJO) is on course to start the week on a disappointing note. The benchmark index is currently down 0.4% to 6,732.2 points.

Here’s what has been happening on the market today:

Tech shares tumble.

Tech shares such as Afterpay Ltd (ASX: APT) and Xero Limited (ASX: XRO) have failed to follow their US counterparts higher on Monday and are acting as a drag on the ASX 200. The S&P/ASX All Technology Index (ASX: XTX) is down a disappointing 1.5% at the time of writing. This compares to a 1% gain by the tech-focused Nasdaq index on Friday night.

Bank shares lower.

The big four banks are out of form on Monday. At lunch, three of the big four banks are in the red and are weighing on the performance of the benchmark index. The only bank in positive territory is Westpac Banking Corp (ASX: WBC). Though, the Westpac share price is only up by a single cent to $20.29.

Gold miners crash.

It has been a disappointing day for gold miners such as Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST). At lunch, all of the major gold miners are trading notably lower after the gold price sank 4.1% lower to US$1,835.40 an ounce on Friday night. Traders were selling safe haven assets after US political risks faded. The S&P/ASX All Ordinaries Gold index is down 4.8% at the time of writing.

Best and worst ASX 200 performers.

The best performer on the ASX 200 on Monday has been the Woodside Petroleum Limited (ASX: WPL) share price with a 4.5% gain. Investors have been buying the company’s shares after oil prices rose strongly on Friday. The worst performer has been the Westgold Resources Ltd (ASX: WGX) share price with an 8% decline. This follows the aforementioned decline in the gold price on Friday.

More reading

• The latest ASX “buy” recommendations from top brokers
• Why Costa, Monash IVF, Newcrest, & Xero shares are dropping lower
• Why the SelfWealth (ASX:SWF) share price is on the rise this morning
• Why the Afterpay (ASX:APT) share price has rocketed 250% in 12 months
• Why the Costa Group share price (ASX:CGC) is crashing this morning

James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Our share market may be on a backfoot today, but this didn’t stop leading brokers from throwing up their latest ASX buy ideas for the year.

The S&P/ASX 200 Index (Index:^AXJO) steadily lost ground through the morning and slumped 0.5% at the time of writing.

SYD share price target gets a lift

If you are looking to buy the dip, Morgans is recommending you put the Sydney Airport Holdings Pty Ltd (ASX: SYD) share price on your shopping list.

The broker upgraded its price target on the SYD share price to $6.95 from $6.56 a share ahead of the airport operators profit results on 24 February.

“SYD’s intrinsic value is not driven by month-to-month pax volatility, but where earnings stabilise upon recovery from COVID-19 (and theirlong-term growth thereafter) as well as the interest rate environment,” said Morgans.

However, the broker only expects Sydney Airport to restart paying a dividend in 2022 and doesn’t think earnings will significantly exceed FY19 levels until FY24.

But for those willing to overlook the nearer-term volatility, Morgans is recommending the stock as “add”.

Pivotal point prompts BGA share price upgrade

Meanwhile, one of the latest ASX stocks to get upgraded by Bell Potter is the Bega Cheese Ltd (ASX: BGA) share price.

The broker upped its rating on the dairy producer to “buy” from “hold” after it noted two significant industry changes in the past two months that favour the BGA share price.

The first is Bega’s recent $764 million acquisition of Lion Dairy and Drinks with Bega forecasting synergies of around $41 million.

The second is the accounting problems at rival Freedom Foods. Bell Potter thinks these two events could prove to be a “pivotal point” in the competitive landscape and isn’t fully appreciated by the market.

Bell Potter’s 12-month price target on the BGA share price is $6.20 a share.

On a stronger platform

One of Citigroup’s buys for the year is the Hub24 Ltd (ASX: HUB) share price as the investment platform is benefiting from a number of tailwinds.

One tailwind is the exodus of advisers away from vertically integrated platforms and towards smaller operators like Hub24.

Turmoil that’s rocking key rivals, including the AMP Limited (ASX: AMP) share price, is also benefitting the ASX small cap stock.

Citi also highlighted the end of grandfathered commissions as the third driver for the HUB24 share price.

While the broker is worried about the execution risks following Hub24’s three recent acquisitions, it believes these assets (if bedded down right) can give it an edge over rivals.

Citi is recommending the HUB24 share price as a “buy” with a 12-month price target of $25.85 a share.

More reading

• ASX 200 down 0.4%: Afterpay tumbles, bank shares lower, gold miners crash
• Why the SelfWealth (ASX:SWF) share price is on the rise this morning
• Why the Costa Group share price (ASX:CGC) is crashing this morning
• 5 things to watch on the ASX 200 on Monday
• The ASX 200 stock facing a day of reckoning at the February reporting season

Brendon Lau owns shares of AMP Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Hub24 Ltd. The Motley Fool Australia has recommended Hub24 Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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A top portfolio manager has revealed 7 ASX shares that he would go for this year as the world starts the post-COVID era.

Shaw and Partners portfolio manager James Gerrish is concerned the massive gains seen in 2020 have made investors complacent.

“The market’s up 40%. [Individual] stocks are up 50%, 100% in some cases. So that’s a concern that I have — that people think it’s all too easy,” he said in a Livewire video.

“It’s hard in the market to consistently deliver results. So delivering consistently is a really important key for investors out there. That probably will be the area I think you should be careful of going into 2021.”

Gerrish will be targeting companies that have scored from a structural change during the pandemic, as they will be more resistant to market volatility.

“The macro backdrop is starting to feed into higher inflationary expectations. From a portfolio positioning point of view, you need to be conscious of that,” he said.

“There’s areas in the market that really benefit as longer-term interest rates rise, inflationary expectations rise, and the like.”

Resistant to ‘market noise’

ASX stocks that meet that criteria, and that Gerrish tips for the coming year, are:

• Costa Group Holdings Ltd (ASX: CGC)
• South32 Ltd (ASX: S32)
• BHP Group Ltd (ASX: BHP)
• Monadelphous Group Limited (ASX: MND)
• NRW Holdings Limited (ASX: NWH)
• Lendlease Group (ASX: LLC)
• Downer EDI Limited (ASX: DOW)

Gerrish said he ideally would like a company to not be impacted by “external factors happening in the market” or “market noise”. 

“I want management to be running their companies the best they can, given the conditions they’re operating in. 2020 has seen a lot of uncertainty around that, and those companies that have really dug in and… have come through COVID in pretty good shape I think.”

Fruit and vegetable producer Costa Group is an example of a business that’s managed the pandemic period competently.

“The business has now got some really strong tailwinds,” said Gerrish.

“For a lot of years, it had some really strong headwinds.”

He likes the miners South 32 and BHP, but mining services is an industry that intrigues him for 2021.

“I think these are more volatile areas in the market. If you look back — have they handled COVID? Have they been defensive, etc? Probably not,” said Gerrish.

“But if I think about the companies that I want to be in going forward, and that’s what as investors we’ve got to do, we’ve got to make decisions today on our outlook for tomorrow.”

Monadelphous and NRW Holdings are his 2 favourite mining services stocks for this year.

“The infrastructure space, that’s going to be a growth area going into next year as well. So we’ve got LendLease in the portfolio, and we’re looking at Downer EDI to add to the portfolio.”

More reading

• Why Costa, Monash IVF, Newcrest, & Xero shares are dropping lower
• Why the Costa Group share price (ASX:CGC) is crashing this morning
• 2 quality ASX dividend shares with 6%+ yields
• 3 top ASX share picks for 2021
• Why the Costa (ASX:CGC) share price has surged 70% in a year

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) has failed to follow the lead of US markets and is sinking lower on Monday. In late morning trade the benchmark index is down 0.5% to 6,725.6 points.

Four shares that are falling more than most today are listed below. Here’s why they are dropping lower:

Costa Group Holdings Ltd (ASX: CGC)

The Costa share price has dropped 4% to $4.11. This decline appears to have been driven by a broker note out of Citi this morning. According to the note, the broker has downgraded the horticulture company’s shares to a neutral rating with a $4.30 price target. Citi made the move largely on valuation grounds after a strong gain over the last few months.

Monash IVF Group Ltd (ASX: MVF)

The Monash IVF share price is down over 2.5% to 73.5 cents. This leading fertility company’s shares have been sold off in recent weeks after it was hit with a class action. These proceedings are in relation to the company’s non-invasive preimplantation genetic screening technology. As things stand, no details have been provided in respect to the amount of damages sought.

Newcrest Mining Ltd (ASX: NCM)

The Newcrest share price has tumbled almost 4.5% lower to $26.10. Investors have been selling Newcrest and other gold miner shares after the price of the precious metal sank lower on Friday. The gold price fell a sizeable 4.1% to US$1,835.40 an ounce. Analysts believe this weakness is attributable to traders giving up on their safe haven trade now that political risks are subsiding in the United States. The S&P/ASX All Ordinaries Gold index is down 4.8% at the time of writing.

Xero Limited (ASX: XRO)

The Xero share price is down 3% to $138.30. Investors have been selling Xero and other tech shares on Monday despite US tech shares surging to new highs on Friday night. At the time of writing, the S&P/ASX All Technology Index (ASX: XTX) is down by around 1.5%. This compares to a 2% gain by the tech-focused Nasdaq index on Friday night.

More reading

• Why the Costa Group share price (ASX:CGC) is crashing this morning
• Why Newcrest (ASX:NCM) and Northern Star (ASX:NST) shares could crash lower today
• 5 things to watch on the ASX 200 on Monday
• Why the Costa (ASX:CGC) share price has surged 70% in a year
• 5 things to watch on the ASX 200 on Friday

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Lucapa Diamond Co Ltd (ASX: LOM) share price has had a shiny week, up nearly 3% today and more than 25% in the past 5 days of trading.

Last week the company discovered the first diamond of over 100 carats at its Lulo alluvial mine in Angola.

Today, Lucapa announced its first 2021 sale of rough diamonds. Lucapa and its partner, the Government of the Kingdom of Lesotho, sold 4.676 carats of rough diamonds for a total of US$5.6 million.

At the time of writing, the Lucapa share price is up 2.78% for the day, trading hands at 7.4 cents per share.

How did the Lucapa share price fare in 2020?

The Lucapa share price had a disappointing 12-month period, diving over 42%. It took a serious tumble from March 2020 to April 2020 falling from .15 cents at the start of March to closing at 0.4 cents by the end of April. That’s a roughly 73% crash.

Copping its share of the worldwide business impacts brought on by coronavirus, Lucapa announced on 1 April that a National State of Emergency was declared in the Republic of Angola. The share price dip that ensued didn’t lift back up until July and has continued to hike a bumpy trail since then.

Acknowledging this blow to the business, Lucapa Managing Director Stephen Wetherall commented today:

Following a tough 2020, where both of our mines were impacted by the pandemic, our valued teams have shown their resilience and operations have bounced back strongly. The good recoveries at both mines and growing demand leading to strengthening diamond prices has seen a strong start to 2021.

A roaring one-month come back

Although the past year was a tough time for the Lucapa share price, Lucapa shares have now jumped over 23% in the past month.

After announcing the unearthing of the 113-carat white diamond recovered at Lulo last week, the share price popped around 12% in 24-hours and has continued to creep up since.  

What’s ahead for Lucapa Diamond in 2021?

Lucapa has secured funding to commission an approximately 45% expansion in the processing capacity of the company’s Mothae kimberlite mine. The expansion is scheduled for completion in the first quarter of 2021.

In the November 2020 announcement, Lucapa stated that it expects the expansion to “materially increase production, revenues and due to economies of scale, improve unit operation costs and deliver improvements to earnings.”

The Lucapa share price is currently up 2.78% in morning trade.

More reading

• Why PointsBet, Santos, Sayona, & Splitit shares are charging higher today
• Are ASX lithium shares staging a comeback in 2021?
• Leading broker names the ASX retail shares to buy in 2021
• Why the SelfWealth (ASX:SWF) share price has popped 3.8% higher this morning
• Why the Afterpay (ASX:APT) share price has rocketed 250% in 12 months

Motley Fool contributor Gretchen Kennedy 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 Bruce Jackson.

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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a decline. At the time of writing, the benchmark index is down 0.3% to 6,737.7 points.

Four shares that have not let that hold them back are listed below. Here’s why they are charging higher:

PointsBet Holdings Ltd (ASX: PBH)

The PointsBet share price is up 3% to $12.37. This may have been driven by a note out of Bell Potter recently which named the sports betting company as a share to buy in 2021. According to the note, Bell Potter has placed a speculative buy and $15.10 price target on its shares. It notes that the company has a significant opportunity in the United States market, where it currently has partnerships in 12 US states with a combined population of 94 million.

Santos Ltd (ASX: STO)

The Santos share price is up 4% to $7.25. Investors have been buying the energy producer’s shares after oil prices jumped to their highest levels since February of last year. On Friday Brent crude oil climbed 1.8% to US$55.35 a barrel and West Texas Intermediate crude futures settled 2.8% higher at US$52.24 per barrel. Both benchmarks recorded weekly gains of more than 6%.

Sayona Mining Ltd (ASX: SYA)

The Sayona Mining share price has rocketed 61% to 2.25 cents. Investors have been fighting to buy the Canada-based lithium miner’s shares after it signed an agreement with Piedmont Lithium Ltd (ASX: PLL). That agreement sees Piedmont Lithium buy a stake in the company and sign up for at least 50% of Sayona Québec’s future spodumene concentrate production.

Splitit Ltd (ASX: SPT)

The Splitit share price has jumped 9% to $1.41 after announcing an agreement with tech giant Google in Japan. In the coming weeks, customers purchasing Google’s new 5G phone, the Pixel 5, or Nest devices from the Google Store, will be able to split their payments into equal monthly instalments through Splitit.

More reading

• Why the Sayona (ASX:SYA) share price is rocketing 100% higher today
• Here’s why the Splitit (ASX:SPT) share price is surging 7% higher today
• 5 things to watch on the ASX 200 on Monday
• Leading broker names the emerging ASX shares to buy in 2021
• ASX 200 rose 1.6%

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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ASX lithium shares have truly tested the resolve of long-term shareholders after more than two years of negative returns.

The industry has been in survival mode since lithium prices spiralled lower after spot prices peaked in 2018. This was driven by an influx of producers and supply, on dwindling demand. 

In recent months, the Galaxy Resources Limited (ASX: GXY), Orocobre Limited (ASX: ORE) and Pilbara Minerals Ltd (ASX: PLS) share prices have staged epic recoveries, delivering triple digit returns from their lows late last year. 

But taking a look at the bigger picture, the Orocobre and Galaxy share prices are still down a respective 30% and 27% from their 2018 highs. Pilbara is the only player to be eyeing a record all-time high after surging more than 250% since October. 

Lithium prices hit a 14-month high

Fastmarkets cites that China’s battery-grade lithium carbonate prices have hit a 14-month high due to continued tight supply and producers hiking up prices further. 

The turning point for lithium prices is significant following more than two years of tumbling prices. Since 2018, lithium carbonate and hydroxide prices slumped by more than 50%, slashing the once highly profitable ASX lithium shares. 

In the case of Galaxy, the company has previously traded at a price-to-earnings (P/E) ratio of just 10. But in the company’s half-year ended 30 June 2020 results, it delivered a net loss of US$22 million. 

Back in FY18, the company was selling lithium concentrate for an average of US$927 per dry metric tonne (dmt). These prices fell to an average of US$502/dmt in FY19. And US$398/dmt in the most recent 30 June 2020 results. 

Pilbara is the latest ASX lithium share to update the market about improving prices. Its December quarter shipments update cited improved spodumene concentrate demand conditions, with lithium carbonate pricing up 35% to date from its lows in August 2020. 

ASX lithium shares positioned for the future 

ASX lithium shares have wasted no time in gearing up for higher lithium prices in the medium-long term. 

Galaxy holds three lithium assets. Two of which are aimed to start construction and commissioning in 2022. Galaxy moderated production settings on its flagship resource, Mt Cattlin, to 50-55% of capacity to adapt to market conditions. However, the miner is examining the potential to ramp up Mt Cattlin production to full capacity, subject to inventory levels and prices.

Similarly, Pilbara also has the ability to rapidly increase production in response to rising prices. 

More reading

• 3 ASX mining shares hitting 52-week highs today
• Here’s why the Orocobre (ASX:ORE) share price is on the move today
• The Galaxy Resources (ASX:GXY) share price has rocketed 20% in 2021
• Why Atomos, BOD Australia, Galaxy, & Zebit shares are racing higher
• Why these ASX shares just stormed to 52-week highs or better

Motley Fool contributor Lina Lim 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 Bruce Jackson.

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