Why is the Sayona Mining share price booming 10% on Tuesday?

Sayona extends gains today.

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Key points
  • Sayona shares continue their gains today
  • Lithium continues its upside as well with further gains to its record high
  • The Sayona Mining share price is up 96% this year to date 

The Sayona Mining Ltd (ASX: SYA) share price is pushing higher today on no news. At the time of writing, the share is trading 11% in the green at 25.5 cents.

Also pushing higher today and continuing its lengthy rally is the price of lithium, with lithium carbonate now priced at A$120,047.45 per tonne – a record high.

It hasn't been smooth sailing for Sayona on the chart these past 6 months, however. As seen in the chart below, shares are reclaiming ground after dipping from highs of 35.5 cents on 13 September.

TradingView Chart
Female miner smiling in front of a mining vehicle as the Pilbara Minerals share price rises

Image source: Getty Images

What's up with the Sayona Mining share price?

Chief to the upside in recent weeks for Sayona has been the extended gains in lithium pricing that have seen the battery metal shoot to another record high.

Driving the upside is the continued demand for batteries used in electric vehicles such as cars, scooters and buses.

Exploration and offtake activity has exploded in the space over the past 2–3 years and this has seen numerous new entrants into the space.

Updates in the space are therefore rewarded very generously if positive, which has been the case for Sayona lately.

On October 4 it announced it has launched a pre-feasibility study to produce lithium carbonate at its North American Lithium (NAL) project.

This was immediately followed by an update advising another pre-feasibility study at the Moblan Lithium Project, in Canada.

Finally, on 18 October, the company advised it had found a contractor to deliver its NAL spodumene concentrate from its facility to the port.

As such, investors positioning themselves within the lithium trade will have found the company's latest two updates appealing, evidenced in the price action afterwards.

Shares are now up 18% this week, and today's trading volume is already 82% of the 4-week average at 69.2 million shares.

Meanwhile, Sayona is up 96% this year to date.

Motley Fool contributor Zach Bristow 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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