It's been a fairly sad start to the trading week for ASX shares so far this Monday. At the time of writing, the All Ordinaries Index (ASX: XAO) has sunk by a depressing 0.32%. But let's talk about an ASX lithium share that is making its investors very happy indeed today.
Lithium Australia Ltd (ASX: LIT) is a small-cap ASX lithium share that most investors probably wouldn't have heard of. Until today that is. Lithium Australia shares are making headlines as the company records a whopping 81.8% share price gain.
Yep, Lithium Australia shares closed at 3.3 cents each last Friday. But today, the company opened at 4 cents before climbing to 6 cents at the time of writing.
So what on earth is going on here that might have prompted this potentially millionaire-making gain?
Why has this ASX lithium stock rocketed 80% today?
Well, it seems an exciting announcement the company put out before market open this morning is responsible for these massive share price gains.
Lithium Australia has just revealed it has entered into a joint venture agreement with the ASX resources powerhouse and lithium producer Mineral Resources Limited (ASX: MIN).
Under this arrangement, Mineral Resources is set to fund "the development and operation of a pilot plant and an engineering study for a demonstration plant" at a cost of $4.5 million. Lithium Australia will then supply its 'LieNA' lithium extraction technology to the plant's production process.
When the plant development is completed, Lithium Australia and Mineral Resources will each own 50% of the joint venture, which will take ownership of the LieNA technology. After this, the venture "plans to license the LieNA technology to third parties at a target headline gross product royalty rate of 8%".
Here's some of what Lithium Australia CEO Simon Linge had to say on this news:
We are thrilled by the formation of a new partnership with Mineral Resources, one of Australia's largest and most prominent mining companies. MinRes is the perfect partner to complement our leading lithium extraction technology, given its extensive owned operations and strategic movement downstream into the battery materials sector.
Securing a development partner is also noted as a significant step within Lithium Australia's recently released roadmap and serves as a powerful validation of our patented technology. We are excited by the future opportunity to licence our proven high-value technology to all existing and new lithium mines across Australia and the rest of the world.
So it's clear that Lithium Australia investors are over the moon at his development, judging by the market's reaction over this ASX lithium share today.
Today's share price gains rescue Lithium Australia shares from the 40% loss they had been enduring in 2023 so far.
