Lake Resources share price hits new 52-week low. Has it bottomed?

The Lake Resources share price has hit a new 52-week low of 41 cents today.

| More on:
A businesswoman ponders why her boat is sinking in the ocean.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The Lake Resources share price has hit a new 52-week low of 41 cents today
  • News of Chile's nationalisation of its lithium industry has investors in Argentinean-based miners like Lake Resources nervous
  • Lake Resources recently announced that its flagship Kachi Project in Argentina is ready for commercial-scale development

The Lake Resources N.L. (ASX: LKE) share price has hit a new 52-week low of 41 cents today.

The ASX lithium share is down 4.7% today and down 80% over the past 12 months. By comparison, the S&P/ASX All Ordinaries Index (ASX: XAO) is down 0.37% today and down 0.95% over the year.

The latest news dragging on the Lake Resources share price

ASX lithium shares with operations in South America were all hit by news out of Chile last Friday.

The Chilean Government has decided to nationalise its lithium industry. The government plans to set up a state-owned lithium company that will take a controlling stake in local producers. Yikes.

Lake Resources shares have fallen 10% since this news broke. Argosy Minerals Limited (ASX: AGY) shares and Allkem Ltd (ASX: AKE) shares also took a hit given they all have mines in neighbouring Argentina.

ASX investors are now concerned that Argentina might want to replicate Chile's decision in the future.

Have Lake Resources shares hit bottom?

Investors are sure hoping so.

The Lake Resources share price has tumbled from an all-time high of $2.65 in April last year to 41 cents today. That's a gut-wrenching 85% loss.

A number of things have happened during this period to bring the share price down.

There was the seemingly acrimonious resignation of CEO Steve Promnitz, then projections that lithium prices would fall, and a devastating attack by United States short seller J Capital.

All of this drama led to Lake Resources becoming one of the most shorted shares on the ASX. The short interest today is 8.06%, according to the latest ASIC figures.

However, recent news from Lake Resources indicates perhaps the worst is over.

The company appears to have debunked one of J Capital's assertions by showing that its ion exchange DLE technology works.

On 3 April, Lake Resources announced independent verification of above 99.8% grades and purity for lithium carbonate produced at its flagship Kachi Project in Argentina using its DLE technology.

Two weeks later, the company announced first production of 2,500kg of lithium carbonate equivalents (LCE) "with minimal environmental impact".

The company said it took 1,000 times less land and 10 times less water to produce its LCE than traditional methods.

This is important because Lake Resources seeks to establish itself as a cleaner producer of lithium than other companies, which it hopes will make it more appealing to ESG-focused customers and investors.

Lake Resources CEO David Dickson said DLE was "a new process that has now been proven …".

Lake Resources says Kachi is now 'on track' for commercial-scale development.

What do the experts think?

As we covered last month, Bell Potter thinks the Lake Resources share price could grow five-fold in the next year.

At the time, the broker had a speculative buy rating on Lake Resources with a share price target of $2.52.

Motley Fool contributor Bronwyn Allen has positions in Allkem. 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.

More on 52-Week Lows

A man with his back to the camera holds his hands to his head as he looks to a jagged red line trending sharply downward representing the ASX tech share sell-off today
52-Week Lows

3 ASX shares sinking to 52-week lows today

These ASX shares are having a bit of a nightmare this year.

Read more »

Young man sitting at a table in front of a row of pokie machines staring intently at a laptop. looking at the Crown Resorts share price
52-Week Lows

Star Entertainment share price crashes 26% upon return to trade

This is a new 52-week low.

Read more »

Rede arrow on a stock market chart going down.
Materials Shares

Core Lithium and 2 other ASX 200 lithium shares plunging to 52-week lows

Lithium stocks like Core are exploring new lows today.

Read more »

A man looks nervous as he inflates a balloon, scared it might pop.
Materials Shares

Arafura share price resets 52-week low after quarterly update

The rare earths explorer also announced the results of its share purchase plan today.

Read more »

A woman stands at her desk looking a her phone with a panoramic view of the harbour bridge in the windows behind her with work colleagues in the background.
Industrials Shares

APM shares rebound on Friday following 40% thrashing on weaker profit news

The international employment services company was punished for its 1H FY24 update.

Read more »

Piggy bank sinking in water symbolising a record low share price.
52-Week Lows

3 ASX 200 stocks starting the new year at near 52-week lows

Are these stocks buying opportunities?

Read more »

A businesswoman ponders why her boat is sinking in the ocean.
52-Week Lows

Lake Resources share price falls 7% to new 52-week low amid second strike AGM vote

Chair Stu Crow described "a year of significant progress" amid an 80% decline in the share price in 2023.

Read more »

A man sits uncomfortably at his laptop computer in an outdoor location at a table with trees in the background as he clutches the back of his neck with a wincing look on his face.
Materials Shares

Why did the Core Lithium share price just hit a 2-year low?

Top broker Goldman Sachs says falling lithium commodity prices may hit Core Lithium particularly hard.

Read more »