Li3 Energy has been robust in terms of chart pattern as the stock has soared on news of contracts bagged from the Chilean government. LIEG’s huge jump on Friday came hard on the heels of a new official announcement which served to shed light on the Chilean Laws regulating the exploitation of lithium. The company cited a government’s decision dated Feb. 7 to relaunch the Chilean Lithium Industry by ‘unlocking its restrictions. The stock was trading at dis-appointing levels but the news has triggered quite an upsurge over the recent weeks. Volumes have been significant over the past weeks as volumes have been four times the usual shares traded.
Commenting on the news the company stated that “It is reassuring to know that the Chilean government is being proactive in recognizing the need to address the existing laws by now allowing for new lithium projects to be developed and commercialized in Chile. With our flagship Maricunga Project, Li3 is currently developing one of the top lithium projects in the world and, upon commercialization, the company is confident that this asset will contribute to keeping Chile in the forefront of lithium production worldwide.”
This will significantly help the company over the longer run and lithium is one of the most sought after mineral in the world. One can expect the company to have good top line growth over the long run. However the current year was not a good one for the company with a loss of around $1.8 million the company hopes that the Chilean deal could help the company over the longer run.
We maintain a buy on the stock at current price levels due to a strong indicator in the charts.