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Date : 28/09/2022

The Reason Why Global Lithium Resources Ltd (ASX: GL1) Shares are Exploding!

Global Lithium Resources Ltd (ASX: GL1) is a rising lithium exploration firm. It is laser-focused on the Marble Bar Lithium Project in Western Australia’s Pilbara area.

The reason why Global Lithium Resources Ltd (ASX: DL1) shares have received the backing of Suzhou TA&A Ultra Clean Technology Co and Mineral Resources Limited (ASX: MIN) as the two largest shareholders due to the company’s status as Western Australia’s fastest-growing lithium explorer with various properties in Tier 1 jurisdictions.

Mineral Resources, which has an unmatched experience of rapidly putting operations into production, processing of hard rock lithium ores, and downstream processing, has significant asset location synergies with Global Lithium.

Global Lithium Resources (ASX: GL1) are exploding tremendously from its 20c IPO price in May 2021 to its current value of almost $2.70 per share. This week, the expansion has continued with no signs of stopping in sight. Can investors really afford to get so excited?

GL1: FY22 Key Financials

GL1 is trading at $2.41, with a 500% increase in the value during the past year. The current market cap of the company is approximately AUD 382.46 Million.

ASX-GL1

  1. A total lack of revenue was reported by Global Lithium Resources.
  2. The fiscal year had a combined net loss of $4,252,207 compared to $1,224,978 in 2021.
  3. Total non-cash expenditures amount to $2,109,962 and comprise share-based payment, depreciation and amortization, and interest on lease liabilities.
  4. In FY22, the company’s basic loss per share was ($0.026), up from FY21’s loss of ($0.01).
  5. In addition to no dividends being distributed throughout the period, no payouts are being proposed for the current fiscal year.
  6. As of FY22, it had AUD 32M in cash and equivalents.

GL1: Why ASX Lithium Stocks are surging?

In the past year or two, ASX lithium shares have risen to the top of the market. With the global expansion of the electric vehicle (EV) production business, the price of lithium has skyrocketed.

In fact, this month’s price of lithium carbonate—$71,370.50 a tonne—is the highest ever recorded.

There has been a rise of 80% so far this year, as “surging demand combines with lesser supply,” as reported by Trading Economics.

This explains why lithium stocks on the Australian Securities Exchange are attracting so much interest.

GL1: Global Lithium Resources has put in the work before IPO

In addition to the Manna lithium project, located in Western Australia, Global Lithium Resources owns the neighbouring Marble Bar Lithium project, named after the town of the same name. In 2021, investors were interested in nearly every lithium explorer, but one particular one stood out for one reason.

This is because, before the IPO, the company had previously conducted extensive exploration and declared a first-ever JORC Inferred Mineral Resource at both sites totalling 18.4Mt lithium at a grade of slightly over 1%.

GL1: Global Lithium Resources has achieved several milestones in the previous year

To duplicate Pilbara Minerals’ achievement, the corporation knew it had something but was keen to find where the resources terminated.

Global Lithium Resources Ltd Analysis, ASX GL1 Shares has signed a 10-year offtake arrangement with Suzhou TA&A Ultra Clean Technology for at least 30% of its available output of spodumene concentrate, in addition to finding more in the previous 15 months. And it was happy to have Mineral Resources (ASX: MIN) join as a significant stakeholder by purchasing a 5% interest for $30 million.

The GL1 stock price surged 20% this week, despite the fact stock markets generally had a bad week. As a first reason, Mineral Resources has boosted its shareholding to 8%. And second, metallurgical tests showed promising results, with up to 5.76% lithium spodumene concentrates and up to 85% lithium recovery. This was the second time the results were good in as many months.

GL1: Should you Invest in Global Lithium Resources Shares?

Investors in GL1 shares would be optimistic about the future of the firm. Additional gains are to be expected once it enters production.

The position is not entirely secure for Global Lithium Resources stockholders, though. Kalium Lithium (ASX: KLL) is one recent example of a firm that has experienced this destiny due to late-stage operational difficulties and the subsequent punishment from shareholders.

Moreover, some investors may seek to cash out their gains, especially if market volatility persists.

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