What's happening with the Sayona Mining share price on Monday?

After opening sharply higher, Sayona Mining shares are taking a tumble. But why?

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The Sayona Mining Ltd (ASX: SYA) share price is starting the week on a bit of a roller coaster.

Shares in the S&P/ASX 300 Index (ASX: XKO) lithium stock closed on Friday trading for 4.4 cents. In early trade on Monday, shares were changing hands for 4.6 cents apiece, up 4.5%.

But the embattled miner wasn't able to hold onto those gains. At the time of writing, in later morning trade, shares are trading for 4.2 cents apiece, down 4.6%.

For some context, the ASX 300 is down 0.3% at this same time.

Here's what's happening.

ASX lithium stock drops despite promising discoveries

The Sayona Mining share price is failing to lift off today despite the company reporting on some promising exploration results at its North American Lithium (NAL) project, located in Quebec, Canada.

NAL is a joint venture project. Sayona Mining owns 75% of the project, and Piedmont Lithium Inc (ASX: PLL) holds the other 25%.

According to the release, results from 91 drill holes and wedges totalling 26,605 metres have identified high-grade lithium mineralisation to the northwest, northeast, southeast and below the Mineral Resource Estimate (MRE) pit shell.

Management said the newly discovered zones will become a focal point for assessing future mining options at NAL.

The Sayona Mining share price may not be responding positively today, however, as investors await more certainty.

While the miner said that initial assessments indicated the presence of high-grade lithium mineralisation outside the MRE pit shell, it cannot yet confirm that these will substantially increase NAL's resource portfolio or contribute to extending the lithium project's life of mine.

Investors should gain more certainty on the size of NAL's resource and its life of mine estimates as more results come in. Assay results are pending for 24 additional drill holes, totalling 4,592 metres, conducted during the 2023 exploratory drilling campaign.

Commenting on the results that have yet to boost the Sayona Mining share price, interim CEO James Brown said:

We are very excited by these new discoveries at North American Lithium which highlights the potential of this asset with high-grade mineralisation defined to the north-west, north-east, south-east and below the existing MRE.

The team at NAL will now be working to update the Mineral Resource incorporating these significant results. We look forward to continue testing the mineralisation at NAL with further drilling underway.

Sayona Mining share price snapshot

Despite rocketing 33% last week, the Sayona Mining share price remains deep in the red in 2024, down 40%.

Pressured in part by weak lithium prices and a tepid medium-term price outlook for the battery-critical metal, shares in the ASX 300 lithium miner are down 82% over 12 months.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. 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.

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