Why is ASX lithium share Latin Resources on ice today?

Latin Resources entered a trading halt this morning.

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A person wrapped in warm clothing with head, eyes and face covered by a hat, glasses and a scarf is coated in a layer of snow and ice. representing Strike Energy's trading halt today

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ASX lithium share Latin Resources Ltd (ASX: LRS) gained 5% in last week's trade, closing Friday at 11 cents per share.

But you won't see the Latin Resources share price moving today.

Here's why the ASX lithium stock is on ice.

Why was trading in the ASX lithium share halted?

Latin Resources entered a trading halt this morning at the company's request.

According to the ASX release, the company's management asked for the trading halt pending the release of a capital raising announcement.

Investors can expect the ASX lithium share to resume trading by Wednesday or once that capital raise announcement is made, whichever is sooner.

It was only last Wednesday that Latin Resources updated the market on promising drilling results at its 100% owned Salinas Lithium Project in Brazil.

The miner said the results provided additional confidence in a significant resource upgrade in June.

Commenting on those results, Latin Resources' geology manager Tony Greenaway said:

We continue to see great results coming out of the resource definition drilling at our Colina Deposit.

The consistency in both the pegmatite thickness and lithium grades is extremely encouraging, bolstering our confidence to be able to deliver what we believe will be a significant upgrade to the Colina mineral resource in June.

Is Latin Resources a good investment?

The Latin Resources share price, pictured below, is up 10% in 2023 but down a painful 45% over the past 12 months.

As for what's ahead, Bell Potter sees significant upside potential for the ASX lithium share.

The broker notes that Salina has an initial mineral resource estimate of 13.3Mt @ 1.2% Li2O. But citing prior positive drilling results at the project's Colina Deposit, Bell Potter believes that MRE could be significantly increased.

Bell Potter has a speculative buy rating on the ASX lithium share.

The broker has a price target of 22 cents per share, representing a 100% upside to Latin Resources' current halted share price.

Motley Fool contributor Bernd Struben 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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