Sayona share price lights up on ‘rapid progress’ toward production

Sayona takes another step in the right direction.

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Key points

  • The Sayona share price is tracking higher on above-average volume on Thursday 
  • Increased interest follows news of the company accelerating the restart of its North American Lithium operation 
  • First production is target for the first quarter of 2023 

Interest is picking up again in the Sayona Mining Ltd (ASX: SYA) share price on Thursday after the company’s latest announcement.

While the enthusiasm appears to be fading throughout today, the above-average volume traded of 46 million shares displays the heightened intrigue among investors. At the time of writing, shares in the ASX lithium share are fetching 20.5 cents apiece, up 5.13%.

Accounting for today’s gain, the Sayona share price is approximately 58% above its 13 cents a share rut in mid-July.

Could profits be around the corner?

As the late and great Benjamin Graham said, “In the short run, the market is a voting machine but in the long run, it is a weighing machine.” When it comes to weighing up a company’s value, nothing is as important as earnings.

For Sayona, operational earnings are not yet a reality due to the exploratory and development stage it is currently in. This fact was pointed out in an article penned by my colleague Zach Bristow last week. However, the possibility of profits has taken another step in the right direction today.

According to the release, the restart of the North American Lithium (NAL) operation in Québec, Canada is picking up pace. Approximately 30% of plant and equipment upgrades are said to be completed. This is expected to accelerate with the number of construction workers on site set to double to 100 by September.

As a result, management believes the first spodumene concentrate will be produced in the first quarter of 2023. This is in line with prior timelines, as the company looks to take advantage of the government’s 100% local battery supply chain ambitions.

Furthermore, it appears the update has captured the hopes of investors today. Currently, the Sayona share price is moving up and to the right.

What else is moving the Sayona share price?

The gravity of today’s announcement was emphasised by Sayona managing director Brett Lynch, stating:

It is extremely pleasing to see the rapid progress at NAL as we ramp up towards the recommencement of lithium production.

With virtually all of the NAL operation powered by hydroelectricity, this is truly one of the world’s most sustainable lithium operations, an important ESG differentiator in an industry that aims to facilitate global decarbonisation.

Positively, the lithium price has stabilised at around US$70,500 per tonne according to Trading Economics. The next important aspect investors will be searching for is whether Sayona can produce lithium at an attractive all-in cost.

The Sayona share price is up 58% so far this year. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down 6% in 2022.

Motley Fool contributor Mitchell Lawler 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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