The Argosy Minerals Limited (ASX: AGY) share price is in negative territory today. This comes despite the company announcing a positive update on the construction works at the Rincon Lithium Project.
Argosy holds a 77.5% interest in the Rincon project, located in Salta Province, Argentina. The mine is situated within the 'lithium triangle' – the world's dominant lithium production source.
During late afternoon trade, the lithium miner's shares are down 3.03% to 9.6 cents apiece.
How is Argosy progressing?
Investors are selling Argosy shares regardless of the company providing a snapshot of its progress on the Rincon Lithium Project.
According to its release, Argosy stated that around 24% of the total works have now been completed to bring the Rincon Lithium Project online. The development of the modular 2,000tpa (tonnes per annum) of lithium carbonate production plant remains on schedule and on budget.
The company is targeting to achieve the first commercial production of lithium carbonate product from mid-2022.
Major construction works such as building the process plant, equipment and associated installations, and expansion of the brine system have all progressed. As such, Argosy provided a snapshot of the current progress:
- 74% of earthworks/land movements completed;
- 31% of site works completed (site camp/accommodation, laboratory, office, and other works);
- 65% of the brine system completed (pumping station and plant settling ponds);
- 25% of the process plant completed (plant equipment acquisition and plant warehouse);
- 13% of utilities and associated services (vapour system, communication system and ancillary services); and
- 2% plant commissioning works completed (raw materials acquisition and team development).
Argosy revealed that it is continuing discussions with a number of strategic groups on product off-take agreements and investment options. The company hopes to expand the 2,000tpa of lithium carbonate to a 10,000tpa project development.
Furthermore, Argosy believes that with lithium prices rising and tightening market supply and demand conditions, potential off-take arrangements will become more attractive.
What did management say?
Argosy managing director, Jerko Zuvela commented:
The Company's Puna operations team have continued their strong progress with construction and development works, toward commencing 2,000tpa lithium carbonate production operations at our Rincon Lithium Project.
We are excited as we continue our works to transform Argosy into a battery quality lithium carbonate producer and cashflow generator, and to further progress the 10,000tpa project development expansion. We look forward to a significant near-term growth phase from increasing development activity at the Rincon Lithium Project
About the Argosy share price
Since the beginning of the year, Argosy shares have performed modestly, recording gains of around 20%. The company's share price reached a 52-week high of 21.5 cents in January.
Based on valuation grounds, Argosy presides a market capitalisation of roughly $120 million, with approximately 1.25 billion shares outstanding.
