Beside nickel – which is up more than 20 per cent over 2019 – battery metals like lithium, cobalt and graphite have struggled for traction this year.
Globally, producers have seen billions of dollars collectively wiped from their market caps.
Countless explorers have put battery metals projects on ice and moved on to more palatable commodities, like gold.
Year to date, Benchmark Mineral Intelligence’s lithium, graphite and cobalt price indexes are down 12.4 per cent, 19 per cent and ~38 per cent, respectively.
Vanadium has also well and truly fallen from those lofty +$US35/lb highs from late 2018, last fetching around $US6.8/lb on the Chinese spot market.
But despite the short-term negative outlook for most battery metals going into 2020 (emphasis on short term) there’s still a number of quality small cap players who are successfully swimming against the tide.
Here are some highlights for 2019.
Liontown Resources (ASX:LTR) +239%
Liontown wants to spearhead the next generation of Australian hard rock lithium producers, timing development to benefit from the next tsunami of lithium demand.
Liontown has pencilled in first production for 2024, about the time lithium demand is expected to climb strongly out of its current malaise.
There’s still a lot of work to do, but the numbers from an early December pre-feasibility study (PFS) looked solid.
Liontown says that it expects to improve on these economics even further as part of an upcoming definitive feasibility study (DFS).
Archer Materials (ASX:AXE) +111%
The Archer chart was looking pretty healthy even before the ‘quantum computing/health tech/lithium-ion battery’ play found space in its jam-packed portfolio for a new halloysite-kaolin clay project in September.
Halloysite-kaolin is an aluminous clay used to create high purity alumina (HPA) — among many other things — which is in demand because it helps stop lithium-ion batteries from catching fire.
But that’s probably not Archer’s main game right now.
Over the next 12 months the company aims to accelerate the quantum computing stuff toward commercialisation; patent and develop its graphene biosensors; and progress its Campoona graphite project in South Australia towards development.
Walkabout Resources (ASX:WKT) +102%
Like Liontown, Walkabout has battled weak market sentiment as it progresses the high-grade, high-margin Lindi Jumbo graphite project in Tanzania towards production.
Walkabout has been busy over the past 12 months, signing two binding offtake term sheets and an additional sales, purchase and marketing agreement covering all annual production.
It has also kicked off procurement and manufacture of long lead equipment and started the on-site earth works.
In 2020, the plan is to lock down financing for project development — estimated at a very manageable $US27.6m.
Black Rock Mining (ASX:BKT) +49%
Another Tanzanian graphite play on a very similar path to production – although start up capex for phase 1 is higher at $US116m.
By January this year, Black Rock had secured offtake deals with three customers, representing 85 per cent of proposed steady state annual production of 240,000 tonnes.
Like Walkabout, it’s all about raising development capital in 2020.
Black Rock says a “financing round” will commence in the coming months.
“A number of options are being evaluated including project level equity, conventional African-domiciled debt financing, convertible/hybrid structures and offtake-related financing proposals,” the company says in its September quarterly.