One of the best performers on the market on Thursday has been the Argosy Minerals Limited (ASX: AGY) share price.
At one stage the lithium-focused mineral exploration company's shares were up as much as 27% to 26 cents.
They have since dropped back a touch but still sit over 24% higher at 25.5 cents at the time of writing.
Why are Argosy Minerals' shares rocketing higher today?
This morning Argosy Minerals provided an update on recent process works from the Stage 1 plant at its Rincon lithium project in Argentina.
According to the release, the company and its joint venture partner believe the key strategic component of the principal Stage 1 milestone has been achieved.
This means that a successful and scalable chemical process solution to produce battery quality lithium carbonate (LCE) product has been achieved. Furthermore, management believes that this exclusive chemical process technology is effectively proven to be utilised for future development stages at the project.
Argosy managing director, Jerko Zuvela, appears to be pleased with the development. He stated that: "We are delighted at this significant milestone – proof of concept achieved via a successful and scalable chemical process solution that ultimately sets up the Company for progress toward development of Stage 3 at the Rincon Lithium Project. We look forward to delivering our upcoming major upcoming milestones to our shareholders to show the long-term sustainability of our project."
What's next?
Management has advised that process works have produced around 1.2 tonnes of primary/raw lithium carbonate material that has been used for test-works and product refinement.
This has resulted in production of ~175kg of battery quality LCE product, which recorded lithium carbonate content value of up to 99.8%.
The company is now preparing representative customer samples totalling ~70kg, with an average specification of 99.7% lithium carbonate content value, to be provided to its preferred potential off-take party.
After which, pending customer acceptance of its product specification, the company will look to finalise the preliminary off-take agreement for Stage 1 product.
Should you invest?
While this is undoubtedly a positive development and could mean that Argosy is on the verge of generating meaningful revenues, I wouldn't be a buyer of its shares just yet.
Nor would I necessarily be a buyer of lithium miners that are already generating revenue such as Galaxy Resources Limited (ASX: GXY) and Orocobre Limited (ASX: ORE). Instead, I would suggest investors wait to see how lithium prices fare over the coming months.
After all, prices have been tipped to fall significantly due to an oversupply of the white metal. If this happens it could weigh heavily on all lithium miners' shares.
