One of the biggest movers on the market on Monday has been the Argosy Minerals Limited (ASX: AGY) share price.
At one stage the lithium company’s shares were up as much as 50% to 27 cents before giving back some of these gains.
At the time of writing Argosy Minerals’ shares are up 33% to 24 cents.
Why are its shares rocketing higher today?
This morning the company announced that it has successfully produced battery grade lithium carbonate (LCE) product from its stage 1 plant at the Rincon lithium project in Argentina.
This news will be a welcome relief to shareholders after Argosy Minerals’ shares were smashed in June after an initial sample tested in the company’s laboratory came out as industrial grade LCE and not the sought-after battery grade LCE.
According to today’s release, the latest product, tested in-house, recorded a lithium carbonate content value of 99.6%.
Management has advised that the LCE product will now be prepared for customer samples for their own quality confirmation and testing. These include a number of international cathode and battery-makers.
Before adding that this initial product, pending customer verification of product specification, will form the basis for Argosy Minerals progressing towards finalising a preliminary off-take agreement for the Stage 1 production.
Should you invest?
I think this is great news for the company and its shareholders and I can’t say I’m surprised to see its shares rocket higher today.
The update in June was a disaster for many reasons, but pleasingly the company has managed to move on from that and things look positive now.
This could make Argosy worth a closer look, though, as with industry peers Galaxy Resources Limited (ASX: GXY) and Orocobre Limited (ASX: ORE), whether it is a successful investment or not will ultimately come down to future lithium prices.
Although prices remain strong at present, opinion is divided on where they go next. This makes an investment in the industry a high risk one.
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Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.