Here’s why the Lithium Energy (ASX:LEL) share price is tumbling 6% today

Covid-19 travel restrictions have slowed down approval on this project.

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The Lithium Energy Ltd (ASX: LEL) share price is plunging today after a company update on its operations in Argentina.

Shares in the exploration company are trading hands at 70 cents on Monday afternoon, down 6%.

Let’s take a look at what may be impacting the Lithium Energy share price today.

What did the company announce?

In today’s release, Lithium Energy advised that COVID-19 travel restrictions were delaying public consultation at its Solaroz Lithium Project in Argentina.

The company advised the market back in September that approval for the project would be imminent.

Despite obtaining regulatory approval on the technical aspects of the exploration, the company wants to ensure the public consultation is complete before drilling for lithium.

The mining director has initiated follow-up public meetings with the two relevant community groups. This is now possible after COVID-19 restrictions were recently relaxed in the Argentinian province of Jujuy.

In consultation meetings in late July, the company said there were no significant community or landowner objections to the exploration.

Lithium Energy mines for battery minerals at both the Argentina mine and the Burke Graphite Project in Queensland.

Management comment

In a statement authorised by the executive chairman and director, the company said:

Whilst this has caused a delay to the planned exploration activities, Lithium Energy is fully supportive of the request made by the mining director.

Lithium Energy anticipates that such engagement will foster more positive long term community engagement and collaboration moving forward.

Lithium Energy said it would hold these community meetings in the new year and was not expecting any objection to the exploration.

The company is currently engaging with local geophysics and drilling contractors amid the pending approval and hopes to start exploring by early February 2022.

Share price snapshot

The Lithium Energy share price has surged a mammoth 250% in the past 12 months.

Despite this, the company’s shares have dropped by 21% in the past month and 4% in the past week.

The lithium miner has a market capitalisation of nearly $32 million based on the current share price.

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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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