Lithium has been a hot theme among ASX investors for at least a couple of years now, and there are few signs of waning demand.
The simple fact is that the element is a major ingredient for high-powered batteries, like the ones used in electric cars. And such batteries are crucial for the world to transition to a zero-emissions era.
However, with so many investors piling onto mature lithium producers, they are already pretty expensive.
For a better risk-reward balance, one may need to look at miners that haven't yet reached their full extraction potential.
Fortunately, this week some professionals named two such ASX shares as buys:
Check out these 'big lithium deposits'
BW Equities equities salesperson Tom Bleakley is a fan of Canadian company Patriot Battery Metals Inc CDI (ASX: PMT), which has its shares trading in Australia.
"The explorer is focusing on acquiring and developing mineral properties containing battery, base and precious metals.," Bleakley told The Bull.
The Patriot share price has risen a handsome 35% over the past 12 months.
Bleakley noted that the company already has "big lithium deposits" in North America.
"Lithium is a critical mineral to produce batteries for electric vehicles. A key advantage [for Patriot] is its close proximity to North American battery manufacturers."
It seems Bleakley's peers overwhelmingly agree with his recommendation.
According to CMC Markets, all six analysts that cover Patriot are calling it a strong buy at the moment.
Open pit mining just started in WA
Meanwhile, Sequoia Wealth Management senior investment manager Peter Day's buy recommendation is Liontown Resources Ltd (ASX: LTR).
"Liontown is an emerging tier-1 battery minerals producer," he said.
"Open pit mining has started at the Kathleen Valley Lithium Project in Western Australia."
While the Liontown share price is flat from where it was 12 months ago, it has rocketed an eye-popping 3,400% over the last five years.
This makes it a 35-bagger for those who followed the journey from the start.
According to Day, its current prospects are also exciting.
"The company plans to supply about 500,000 tonnes of 6% lithium oxide concentrate a year. First production is expected in 2024," he said.
"We believe sustaining the development timeline is a key catalyst for Liontown."
Five of the eight analysts covering Liontown shares on CMC Markets are currently rating it as a strong buy. The remaining three consider it a hold.
