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Is Global Geoscience a rising ASX lithium star?

ASX lithium companies such as Galaxy Resources Limited (ASX: GXY) and Orocobre Limited (ASX: ORE) have proven strong investments for shareholders who got in at the right time.

For those who missed out, Global Geoscience (ASX: GSC) could turn out to be a profitable option, according to some analysts.

Taylor Collinson last month put a 50 cent price target on Global Geoscience shares and so far that target is looking good.

Global Geoscience shares gained 7.5% on Thursday with the company’s share price closing at 28.5 cents.

As such, there is still a healthy profit to be made if Global Geoscience does manage to lift to 50 cents.

The optimism surrounding Global Geoscience is tied to the company’s recent announcement concerning its Rhyolite Ridge Project in the United States.

Global Geoscience announced that its recent studies of the Rhyolite Ridge Project show potential for higher cash flow in the early years of mining than was previously anticipated which is expected as a result of targeting “mineralisation with higher lithium grades”.

The company also plans to mine boron, a versatile mineral used for a range of purposes from making glass more heat resistant to producing advanced materials such as ‘super-magnates’, at the Rhyolite Ridge site.

Global Geoscience has stated that the boron market in the United States is worth about $3.2 billion per year and is dominated by the duopoly of Turkey’s Eti Maden and Rio Tinto Limited (ASX: RIO) which together control the bulk of reserves located in Turkey and California.

Global Geoscience plans to seize a chunk of that market and it seems that at today’s market valuation of almost $390 million some have faith in the company’s prospects of shifting a lot of boron.

It’s not unlikely that Global Geoscience’s share price will hit 50 cents, having traded above that price just a few months ago.

But until Global Geoscience starts moving bulk boron or lithium I would say it’s a share best left on the watch list.

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Motley Fool contributor Steve Holland has no position in any of the stocks mentioned. 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.

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