60% upside! Macquarie says buy Argosy shares now

The junior lithium miner has very exciting plans for this year, if you want to invest in its fortunes.

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While there are plenty of established lithium producers on the ASX, real windfalls can sometimes come from smaller miners.

That's because the smaller players can currently be in an exploratory stage, when they're searching for a viable mineral deposit. The share price can be very cheap at this phase because the business is not actually selling any lithium.

Then if they start producing at one of its sites, the stock price can rocket.

Of course, the risk is that the exploration might come to nought.

However, the analysts at Macquarie Group Ltd (ASX: MQG), for one, reckons careful selection of the best junior miners can increase your chances of success.

Happy woman miner with her thumb up signalling Wyloo's commitment to back IGO's takeover of Western Areas nickel

Image source: Getty Images

Production expected in 'coming months'

The Macquarie team is, at the moment, rather fond of lithium explorer Argosy Minerals Limited (ASX: AGY).

The Motley Fool reported a couple of weeks ago that the analysts put an outperform rating on the lithium miner with an 80 cent share price target.

That's a mouthwatering 60% upside potential from the Tuesday price of 50 cents.

"Macquarie has been pleased with the progress the company is making with its Rincon lithium project in Argentina," said The Motley Fool's James Mickleboro.

"It highlights that the steady run-rate production is expected to be achieved in the coming months."

As well as the prospect of production starting this year at the Argentinian site, the company has an exploratory project ongoing in Nevada in the US.

Great long-term prospects for lithium 

Over March and April, the Argosy share price endured a 40% fall. But according to The Motley Fool's Bronwyn Allen, there was no tangible adversity announced from the business that would cause such a plunge.

Thus the current window might present an excellent buying opportunity.

Although lithium prices have cooled off considerably over the past six months, multiple experts tip that the mineral will enjoy hot demand for years to come.

According to Shaw and Partners portfolio manager James Gerrish, lithium batteries have been around for decades, but one particular modern-day phenomenon is driving the current boom.

"It's the growth in electric vehicles that is driving the demand for this lightweight, high-energy-density input," he said on Market Matters last week.

"While we cannot see lithium prices re-scaling the 2022 highs for many years, there is still plenty of opportunity."

Motley Fool contributor Tony Yoo has positions in Macquarie Group. 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 positions in and has recommended Macquarie Group. 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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