Galan Lithium (ASX:GLN) share price tumbles after it posted its quarterly report

The Galan Lithium Ltd (ASX: GLN) share price is crashing after the ASX miner posted its latest quarterly update. Shares…

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Galan Lithium share price falling asx share price represented by a sad and flat battery

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The Galan Lithium Ltd (ASX: GLN) share price is crashing after the ASX miner posted its latest quarterly update.

Shares in the lithium hopeful dived 4.2% to $1.25 during lunch time trade, although its peers aren’t doing much better.

The Orocobre Limited (ASX: ORE) share price lost 0.1% to $9.55, while the Pilbara Minerals Ltd (ASX: PLS) share price shed 2% to $2.22 at the time of writing.

Galan Lithium share price in cooldown

It’s probably more good ol’ profit taking that’s driving the sell-off more than anything sinister as ASX lithium shares have surged over the past year.

For example, the Galan Lithium share price is sitting on an 850% increase in the past 12-months. Management will need more than a positive spin on the quarterly to drive the shares higher in the near-term.

At least Galan Lithium didn’t let the rally go to waste. It raised $50 million via an institutional placement which boosted its cash holdings to just over $42 million.

Cash to fund lithium projects

That should last it a while as it looks to prove up its Argentinian projects. The miner’s focus in the latest quarter was on the ongoing feasibility works and next round of drilling at its high-grade Hombre Muerto West (“HMW”) project.

It also reported that it is moving closer to awarding the engineering component of the feasibility studies to an engineering company. It’s currently in discussions with three international firms.

Meanwhile, Galan Lithium is also advancing its scoping studies at the Candelas project. Both projects are in the Hombre Muerto West salt flat in the South American Lithium Triangle.

Galan Lithium owns 100% of these projects and holds an 80% stake in the Greenbushes South Lithium project. The balance is held by its joint-venture partner Lithium Australia NL (ASX: LIT).

Hot commodity

Lithium has been the hot commodity over the past year. It’s the main input into batteries, which are used in electric vehicles (EVs).

Some experts believe supply will struggle to keep up with demand due to the growing popularity of EVs. The decarbonisation of the world will also add to demand for batteries to store power from sustainable energy sources.

Against this background, the junior explorer has outrun its bigger peers. That’s not surprising as it tends to be the more speculative ASX mining shares that do better when commodities are running hot.

Galan Lithium share price tops its bigger peers

The Pilbara Minerals share price powered up nearly 500% over the past year but that’s still 392% behind Galan Lithium’s share price run.

In case you are wondering, the Orocobre share price chalked up a gain of 255%, while the Lithium Australia share price added 180% over the period.

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Motley Fool contributor Brendon Lau owns shares of Orocobre Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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