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Ecograf (ASX:EGR) responds to ASX price query after shares rocket 51%

The Ecograf Ltd (ASX: EGR) share price soared higher today. Shares were up a phenomenal 51% by the closing bell after hitting intraday gains of more than 75%.

Today’s big surge puts the battery material supplier’s share price well into the green in 2020, up 56% since 2 January. For comparison the All Ordinaries Index (ASX: XAO) is down 11% year-to-date.

That’s a remarkable gain for Ecograf’s share price, considering it wasn’t spared the carnage that ensnared most ASX shares following the COVID-19 panic selling. From 31 January through to 2 April the share price tumbled 67%. Since that low shares are up 317%, owing much to today’s big bounce.

At the current price of 12 cents per share, Ecograf has a market cap of $43 million.

What does Ecograf do?

Ecograf aims to become a key player in supplying environmentally friendly natural flake and battery (spherical) graphite products to its customers. Those include the established (refractory, recarburiser, lubricant) and the emerging (lithium-ion battery) global markets.

EcoGraf plans to operate a diversified graphite portfolio, supplying high-quality Tanzanian natural flake graphite products. Working with TanzGraphite, Ecograf is targeting established markets in Asia and Europe. The company’s multi-hub development is commencing in Kwinana, Western Australia to supply environmentally responsible battery graphite for lithium-ion batteries.

How did Ecograf respond to the ASX query?

When a company’s share price rises at a blistering pace, the ASX tends to take notice. Today it requested an explanation from Ecograf in the form of a price query.

The company promptly responded, stating, “EGR is not aware of any information concerning it that has not been announced to the market which, if known by some in the market, could explain the recent trading in its securities.”

So is there any other reason that Ecograf’s share price may have shot higher today, alongside a large surge in the volume of shares traded?

According to Ecograf: “EGR notes an improved sentiment for battery mineral markets as increased production of electric vehicles and lithium-ion batteries are considered a key support for global COVID-19 economic recovery plans.”

The company also mentioned the Aussie government’s increased focus to secure supplies of critical resources, like battery graphite, outside of China. It also stated: “EGR notes today’s articles from the Age and the Sydney Morning Herald that reflect this sentiment and quote EGR’s Managing Director, Andrew Spinks.”

Ecograf had no other explanation and noted that improved sentiment was beyond its control.

Following today’s 51% leap, the Ecograf share price will be one to watch.

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Motley Fool contributor Bernd Struben 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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