The best performer on the All Ordinaries (Index: ^AXAO) (ASX: XAO) on Wednesday has been the Altura Mining Ltd (ASX: AJM) share price.
In late morning trade the lithium miner’s shares are up 7.5% to 14.5 cents.
Why is the Altura Mining share price surging higher?
Investors have been fighting to get hold of the lithium miner’s shares this morning after it formally declare commercial production at its 100% owned Altura Lithium Mine located in the Pilbara region of Western Australia.
According to the release, Altura’s operational team has delivered significant and measurable increases in both lithium concentrate output and overall lithium metal recovery from both the coarse and fines plants in recent weeks.
Stage 1 has a nameplate capacity of 220,000 tonnes per annum of SC6.0 spodumene concentrate, or 645 tonnes per day inclusive of planned maintenance shutdowns, and an overall lithium metal recovery of 80%.
In recent weeks the company has achieved an average of 541 tonnes per day, which represents 84% of its nameplate capacity. Things have improved further in March, with month to date production averaging 612 tonnes per day. This equates to 95% of its nameplate capacity.
Another positive is that recoveries are heading in the right direction. Management advised that month to date the average recovery is 67% of lithium metal or 83% of nameplate, representing a material increase from the previous month’s recovery of 57%.
Altura’s managing director, Mr James Brown, appeared to be delighted with the news, describing it as “one of the most significant milestones in the Company’s history.”
He added: “Our focus now is to ensure the mining, processing plant and logistics chain are operating as efficiently as possible and our customers are getting the best quality product we can produce.”
Should you invest?
Whilst this is undoubtedly a positive development, I wouldn’t rush in and buy its shares on the news.
And until lithium prices reach an inflection point, I suspect that they may remain under pressure and potentially sink even lower.
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Motley Fool contributor James Mickleboro 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.