The Sayona Mining Ltd (ASX: SYA) share price has started 2023 out on the right foot, to say the least.
The stock has soared 37.9% year to date to trade at 26 cents a share right now as the company gears up to restart production at its North American Lithium (NAL) operation.
For comparison, the S&P/ASX 200 Index (ASX: XJO) has lifted 4.4% since the start of this year.
But have ASX lithium fans not yet on-board Sayona shares missed the boat? Let's take a look at what the future might hold for the lithium up-and-comer.
Image source: Getty Images
What might 2023 hold for Sayona shares?
It's shaping up to be a big year for Sayona and, seemingly, its share price. However, there are a few factors I believe are worth considering when sussing out the stock as a potential buy. The first being its maiden revenue.
The company expects to restart its NAL operation's production in the current quarter. After that, partner Piedmont Lithium Inc (ASX: PLL) has agreed to buy up 113,000 tonnes of spodumene concentrate or half of the operation's production each year, whichever is greater.
For reference, the ASX 200 lithium favourite aims to produce 220 kilotons of spodumene 6% from its Abitibi lithium hub in Canada, which comprises the NAL operation and the Authier project.
Thanks in part to Piedmont's offtake agreement, Sayona will likely recognise its maiden revenue on the restart, set to occur amid soaring lithium prices – a potential harbinger of share price gains.
But there's a slight hitch.
The agreement between Sayona and Piedmont will see the latter paying a maximum of US$900 a tonne for the lithium product. That's well below current spot prices.
Indeed, Goldman Sachs is tipping the price of lithium spodumene 6% to trade at US$4,330 a tonne this year, as my Fool colleague James reports. Though, the broker expects the material's value to slip to US$800 a tonne in 2024.
Thus, Sayona's revenue might not initially stack up against that of some of its ASX 200 lithium peers.
Additionally, as I recently explored, it might be some time until Sayona is operating in the green.
Indeed, many of its lithium projects are still in the exploration phase, thereby dragging on its bottom line.
Is the ASX 200 lithium share a buy right now?
Unprofitable companies often face greater risks than their profitable counterparts.
On that note, I'd argue shares in ASX 200 lithium companies that are already producing and profiting, like Pilbara Minerals Ltd (ASX: PLS) and Allkem Ltd (ASX: AKE), could be better positioned to gain in 2023 than Sayona, as their earnings might be bolstered amid demand for the battery-making material.
On the other hand, unprofitable outfits can also house greater rewards.
As Sayona noted in its most recent quarterly report, it's expecting to launch production ahead of other North American projects. That could see it "on a fast track" to downstream value-adding lithium carbonate or hydroxide production – a key benefit over its nearby peers.
Not to mention, demand for lithium is expected to hold up over the coming years amid decarbonisation.
Therefore, I think Sayona shares might be worth considering as a longer-term buy, depending on an investors' risk tolerance.
