The Lake Resources N.L. (ASX: LKE) share price was on fire last month.
During the month of May, the lithium developer's shares stormed a massive 27% higher.
Why did the Lake Resources share price rocket higher in May?
Interestingly, investors were fighting to buy the company's shares last month despite there being no news out of it.
However, it is worth noting that there was some big news in the lithium space in May, which gave the whole industry a boost.
That news was Allkem Ltd (ASX: AKE) announcing plans to merge with lithium giant Livent Corp (NYSE: LTHM). This sparked hopes that further mergers and acquisitions (M&A) activity could happen.
In addition, a note out of Goldman Sachs at the very end of April may have got investors excited heading into May. While the note is not about Lake Resources, it was focused on the technology that the company uses.
Goldman sees the technology as game-changing and likened it to the introduction of shale in the oil industry. It commented:
The implementation of Direct Lithium Extraction (DLE) technologies has the potential to significantly increase the supply of lithium from brine projects (much like shale did for oil), nearly doubling lithium production on higher recoveries and improving project returns, though with the added bonus of offering ESG/sustainability benefits, while also widening rather than steepening the lithium cost curve.
Though, with short interest still building, Lake Resources may need to demonstrate that its technology is working at scale to satisfy some in the market.
Its last update in April revealed that its lithium development project had successfully produced 2,500kg of lithium carbonate with minimal environmental impact. Management said:
Today's announcement marks a new era in scalable lithium production. Lithium is a cornerstone of the energy transition – but limitations in production technology have led to increased costs, scarcity, and extreme price volatility. Today, we've proven that it is possible to produce high-purity lithium faster and without evaporation ponds – all while protecting surrounding communities and ecosystems. We are grateful for the strong partnership between our companies in developing this project, and we look forward to our continued success as we chart a new path in lithium production.
Here's hoping June will be just as strong for shareholders.
