'Nothing has changed': Why the Lake Resources share price is rocketing 19% today

The company has clarified an update released to the market on Monday.

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Key points
  • The Lake Resources share price is taking off on Friday, leaping nearly 19% to trade at 53 cents 
  • The gains come amid the release of a market update further clarifying the company's recently announced North American transition 
  • The surge also follows a dire few days on the market. The Lake Resources share price fell nearly 54% between the end of last week and Thursday's close 

The Lake Resources N.L. (ASX: LKE) share price is surging upwards on Friday amid the release of a market update.

The company has reassured the market that ambitions for its Argentinian projects remain the same following its pivot towards the North American market.

At the time of writing, the Lake Resources share price is 83 cents, 18.57% higher than its previous close.

Unfortunately, today's gain hasn't been enough to see the stock recovering this week's tumble. It's still trading 41% lower than it was at last Friday's close.

For context, the broader market is also in the green today. The S&P/ASX 200 Index (ASX: XJO) is currently up 0.25% while the All Ordinaries Index (ASX: XAO) has gained 0.48%.

Let's take a closer look at today's release from the ASX 200 lithium explorer.

A drawing of a rocket follows a chart up, indicating share price lift

Image source: Getty Images

Lake Resources share price surges on Friday

The Lake Resources share price has suffered this week amid news of its planned transition towards North American and Asian lithium supply chains, its addition to the ASX 200, and a broader lithium sell-off.

The company announced North America managing director Steve Promnitz was stepping down after establishing Lake Resource's dominant position in Argentina on Monday.

It also announced that its chair Stu Crow has been appointed executive chair for six months to oversee the establishment of the company's North American presence. Crow will direct the appointment of a new CEO, board members, and the creation of US offices.

The company addressed potential concerns regarding the change in a non-price sensitive release today, saying:

Nothing has changed in respect of [Lake Resource's] desire to progress development of the Kachi and other projects in Argentina to meet rising demand in the US and other western markets.

It also noted that Promnitz' decision to step down was "of his own volition" and stated he didn't provide a reason for his departure. Key negotiations and happenings will continue despite Promnitz' departure.

Finally, the company told the market:

There is an urgency in the US to secure battery metal supply chains … Crow is currently in the US with a view to progressing the outlined strategy.

What's going on with ASX lithium shares this week?

Prior to today, the Lake Resources share price had tumbled nearly 54% this week amid a broader lithium sell-off.

It was joined in the red by shares in its fellow ASX lithium favourites.

Those in Core Lithium Ltd (ASX: CXO), Liontown Resources Limited (ASX: LTR), and Sayona Mining Ltd (ASX: SYA) fell 27%, 14%, and 14% respectively between the end of last week and Thursday's close. They're all also in the green today.

As my Foolish colleague James reported, this week's sell-off might have had something to with the news that Germany may refuse to ban fossil fuel-powered cars by 2035.

Lake Resources share price snapshot

Today's gains included, the Lake Resources share price is nearly 24% lower than it was at the start of 2022. Though, it has gained 151% since this time last year.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. 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 Scott Phillips.

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