That's because lithium stocks tend to see big moves not just from changes in the spot price of lithium, but also from regularly shifting forecasts for the pricing outlook.

And those forecasts have varied widely over the past year.

As for the spot market, lithium prices are down some 80% from the November 2022 highs. And over the shorter term, there's unlikely to be a rapid rebound.

Despite some producers, like Core Lithium Ltd (ASX: CXO), suspending mining operations amid the depressed prices, global supply growth looks like it will continue to exceed demand growth over the coming months. Especially with EV sales growth rates in the United States and China slowing markedly.

Which brings us to two ASX lithium shares that Blackwattle Investment Partners analysts Robert Hawkesford and Daniel Broeren "are well placed to ride out near-term volatility in the lithium price".

Two ASX lithium shares to weather the storm

As Blackwattle notes:

Lithium stocks had a challenging start to January as former Small Ords member, Liontown Resources Ltd (ASX: LTR), reported that its major funding partner had pulled a $760 million debt package over concerns of project sustainability.

That added more unwanted volatility to the sector.

Rescinding the debt package, Hawkesford and Broeren said, "resulted in the sell-down of shares for all lithium developers still in need of capital".

But the analysts cite a crucial difference between Liontown and small-cap ASX lithium shares Patriot Lithium Ltd (ASX: PAT) and Latin Resources Ltd (ASX: LRS).

According to Blackwattle:

An important distinction, however, is that while Liontown has a large resource asset, it is a complex and high-cost project at around US$750/ton. This compares to Latin Resources, for example, with a proposed cost base closer to US$540/ton.

In our view projects with superior economics like Latin Resources and Patriot Metals are well placed to ride out near-term volatility in the lithium price.

For the three months ending 31 December, Latin Resources reported a 41% increase to the Colina Deposit Mineral Resource Estimate (MRE) at its Salinas Lithium Project, located in Brazil. The MRE now totals 63.5 million tonnes at 1.3% Li2O.

Patriot reported its quarterly results on 30 January.

Over the three months, the microcap ASX lithium share completed its Phase 3 exploration program at its Gorman Project, located in Canada.

The miner noted that Gorman is along trend and 68 kilometres from Frontier Lithium's (CVE: FL) PAK-Spark Lithium Project. This counts among the largest, highest-grade lithium deposits in North America with a resource of 58.5 million tonnes.

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While the All Ordinaries Index (ASX: XAO) is up a healthy 0.4% in morning trade on Tuesday, this lithium share surged 15% following a promising claims update. After some likely profit-taking, shares are up 6% at the time of writing.

Any guesses?

If you said Patriot Lithium Ltd (ASX: PAT), go to the head of the virtual class.

Here's what the ASX lithium stock reported this morning.

Patriot Lithium share price leaps on new prospective claims

The Patriot Lithium share price is soaring after the explorer announced it has acquired the right to 536 square kilometres of "highly prospective claims".

The land in question is situated in the so-called 'Electric Avenue' lithium district, in the Canadian province of Ontario.

This will see the ASX lithium stock become the largest claim holder in the district, with a semi-contiguous regional claim package spanning more than 890 square kilometres (upon execution of the options).

Patriot said it has previously confirmed high-grade lithium mineralisation at its Gorman Project, located within that district.

The new claims come via two separate transactions. One conducted with Midex Resources Ltd, the other with Gold Canyon Resources Inc and Guyana Frontier Mining Corp.

Commenting on the transactions sending the ASX lithium stock surging today, CEO Nicholas Vickery said, "These strategic transactions involving the Berens and Borland Projects are transformational for Patriot in the region…"

Vickery added:

Patriot has now acquired or secured rights over 70 kilometres of strike length along one of the most exciting lithium regions in the world. The world-class PAK-Spark lithium development project to south-east is a clear validation of the potential that exists in the region, with one of the largest and highest-grade lithium deposits in North America.

As for the confirmed lithium mineralisation at its Gorman prospect, Vickery said those results came from "within a 5.2km semi-continuous trend of outcropping pegmatites, showing real potential for scale and grade".

Potentially stirring investor interest in the ASX lithium stock, Vickery said Patriot believes "the outcropping pegmatites that have been identified to date may only be the tip of the iceberg".

The company aims to kick off detailed exploration of its newly acquired properties as soon as practicable.

How has this ASX lithium stock been tracking?

Patriot Lithium shares are a relative newcomer to the ASX, having commenced trading on 9 December. The ASX lithium stock had a strong run into mid-February but has since retreated, leaving shares down 31% in 2023.

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At the time of writing, the broad S&P/ASX 200 Index (ASX: XJO) is enjoying a green start to the week — rising 0.99% to 7,179.7 points. The sector feeling the most love so far today is materials, catching a 0.66% boost with the Fortescue Metals Group Limited (ASX: FMG) share price being the odd one out.

However, four ASX lithium shares are making some of the biggest waves today. Let's explore the exact details behind the moves.

IGO makes a $136 million offer for growth

An ASX lithium giant, IGO Limited (ASX: IGO), has made it clear this morning it is looking for additional lithium resources.

As previously reported, the $10.8 billion Australian miner — in conjunction with its joint venture partner Tianqi Lithium — has offered 50 cents per share to acquire Essential Metals Ltd (ASX: ESS).

Following the announcement, shares in Essential Metals have sprung to life, jumping nearly 38% to 47.5 cents apiece. Meanwhile, IGO shares are being pushed 1.9% to the upside today, now trading hands at $14.28.

The $136 million deal would value the Pioneer Dome Project owner at a 45% premium to its Friday closing price.

Mineral Resources doubles down on gas

A release by Mineral Resources Ltd (ASX: MIN) on Friday afternoon confirmed it had taken a 16.35% stake in Warrego Energy Ltd (ASX: WGO). The Mineral Resources share price is catching a 3.1% rally today, lifting to $86.14.

Notably, MinRes's financial interest in Warrego comes amid a bidding battle for the gas exploration company. Gina Rinehart's Hancock Group has been duking it out with Strike Energy to try and secure a winning bid on Warrego.

While Mineral Resources is mostly known for its mining services, iron ore, and lithium businesses, it also dabbles in energy. In fact, the investment in Warrego follows a $403 million off-market takeover bid of Norwest Energy NL (ASX: NWE) made in December.

ASX lithium share buying up projects

Barely a month into its listed life and Patriot Lithium Ltd (ASX: PAT) is already looking to spread its wings. Shares in the lithium explorer are up 5.3% today after announcing the acquisition of three prospective land packages in Ontario.

According to the release, the land totals 909sq km in the greenstone belts of the Archean Superior Craton of Ontario. These include the Gorman Project, the Forester Project, and the Birkett Project.

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In morning trade, the lithium explorer's shares rose a whopping 120% from their IPO price to 44 cents.

If you're getting a sense of déjà vu, you're probably not alone.

Earlier this week, another similarly named lithium share, Patriot Battery Metals Inc. (ASX PMT), doubled in value after completing its own IPO.

What is Patriot Lithium?

Patriot Lithium is a United States based lithium explorer with a focus on the Black Hills region of South Dakota and the Pegmatite Belt region of Arizona.

Management notes that these two regions were selected as a high priority to achieve the company's goals of acquiring, exploring, developing, and mining high grade hard rock lithium projects in North America following a systematic and technically driven prospectivity review of lithium projects in the United States.

The company raised $10 million from its IPO through the issue of 50 million shares at an issue price of $0.20 per share. Combined with other shares on issue, this gave it an indicative market capitalisation of $16.9 million. Though, following today's gain, this has now increased to approximately $40 million.

Patriot Lithium's non-executive chairman, Philip Thick, appears positive on the company's future thanks to its experienced management team and increasing demand for lithium in North America. He said:

The US supplies only 1% of global lithium and imports have doubled since 2014. In terms of US Lithium demand, Ford and Volkswagen have formed a global alliance with a focus on North America, to build EV's and EV Technologies.

With both these market dynamics, and government and industry strategies in mind, the Company set out to secure high grade hard rock (spodumene) projects based on a technically driven prospectivity review of lithium projects across the US and is now set to commence an aggressive exploration and development program across its projects in the Black Hills and Pegmatite Belt regions, seeking high grade hard rock (spodumene) mineralisation.

The Board has significant expertise and experience in the lithium industry and will aim to ensure that funds raised through the Public Offer will be utilised in a cost-effective manner to advance the Company's business.

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