It certainly hasn't been easy for Sayona Mining Ltd (ASX: SYA) shareholders over the last 12 months. During this time, as you can see on the chart below, the ASX lithium share has lost a whopping 70% of its value.
Surprisingly, this heavy decline has occurred despite the company transitioning from a developer into a miner in recent months.
In fact, just last week Sayona Mining revealed that it has received the first cash proceeds for its North American Lithium (NAL) operation in Canada following its inaugural shipment of spodumene concentrate.
NAL is jointly owned by Sayona Mining and Piedmont Lithium Inc (ASX: PLL) with 75:25 interests.
Sayona Mining's interim CEO, James Brown, commented:
We are delighted to secure the cash proceeds from NAL's first sales of spodumene concentrate, marking another major milestone for North America's leading source of hard rock lithium production.
We are focused on continuing to safely ramp-up production at NAL and consistently delivering high quality spodumene concentrate to port ahead of multiple shipments planned for the remainder of the year, delivering increasing cash proceeds to NAL for the benefit of the joint venture. It is also pleasing to see our partner at NAL in readiness to take their first shipment under our offtake agreement.
Yet despite this, Sayona Mining shares are changing hands for just 10 cents, which compares very unfavourably to its 52-week high of 36 cents.
Is this a buying opportunity?
The lithium bulls at Macquarie believe investors should be snapping up Sayona Mining shares while they're at 10 cents.
At the end of last month, the broker put an outperform rating and 20 cents price target on its shares. This suggests that they have the potential to double in value over the next 12 months.
The broker feels that recent developments have de-risked the NAL operation. It also estimates that its current share price implies a spodumene price of just US$1,600 per tonne. As a comparison, the spot spodumene price at the end of last week stood at US$2,760 per tonne.
However, it is worth noting that the lithium bears at Goldman Sachs are expecting spodumene prices to fall to US$1,700 a tonne in 2024 and then US$800 a tonne in 2025. So, you could argue that its shares are fair value or even overvalued if you believe Goldman's forecasts will come true.
