'Nothing has changed': Why the Lake Resources share price is rocketing 19% today

The company has clarified an update released to the market on Monday.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points
  • The Lake Resources share price is taking off on Friday, leaping nearly 19% to trade at 53 cents 
  • The gains come amid the release of a market update further clarifying the company's recently announced North American transition 
  • The surge also follows a dire few days on the market. The Lake Resources share price fell nearly 54% between the end of last week and Thursday's close 

The Lake Resources N.L. (ASX: LKE) share price is surging upwards on Friday amid the release of a market update.

The company has reassured the market that ambitions for its Argentinian projects remain the same following its pivot towards the North American market.

At the time of writing, the Lake Resources share price is 83 cents, 18.57% higher than its previous close.

Unfortunately, today's gain hasn't been enough to see the stock recovering this week's tumble. It's still trading 41% lower than it was at last Friday's close.

For context, the broader market is also in the green today. The S&P/ASX 200 Index (ASX: XJO) is currently up 0.25% while the All Ordinaries Index (ASX: XAO) has gained 0.48%.

Let's take a closer look at today's release from the ASX 200 lithium explorer.

A drawing of a rocket follows a chart up, indicating share price lift

Image source: Getty Images

Lake Resources share price surges on Friday

The Lake Resources share price has suffered this week amid news of its planned transition towards North American and Asian lithium supply chains, its addition to the ASX 200, and a broader lithium sell-off.

The company announced North America managing director Steve Promnitz was stepping down after establishing Lake Resource's dominant position in Argentina on Monday.

It also announced that its chair Stu Crow has been appointed executive chair for six months to oversee the establishment of the company's North American presence. Crow will direct the appointment of a new CEO, board members, and the creation of US offices.

The company addressed potential concerns regarding the change in a non-price sensitive release today, saying:

Nothing has changed in respect of [Lake Resource's] desire to progress development of the Kachi and other projects in Argentina to meet rising demand in the US and other western markets.

It also noted that Promnitz' decision to step down was "of his own volition" and stated he didn't provide a reason for his departure. Key negotiations and happenings will continue despite Promnitz' departure.

Finally, the company told the market:

There is an urgency in the US to secure battery metal supply chains … Crow is currently in the US with a view to progressing the outlined strategy.

What's going on with ASX lithium shares this week?

Prior to today, the Lake Resources share price had tumbled nearly 54% this week amid a broader lithium sell-off.

It was joined in the red by shares in its fellow ASX lithium favourites.

Those in Core Lithium Ltd (ASX: CXO), Liontown Resources Limited (ASX: LTR), and Sayona Mining Ltd (ASX: SYA) fell 27%, 14%, and 14% respectively between the end of last week and Thursday's close. They're all also in the green today.

As my Foolish colleague James reported, this week's sell-off might have had something to with the news that Germany may refuse to ban fossil fuel-powered cars by 2035.

Lake Resources share price snapshot

Today's gains included, the Lake Resources share price is nearly 24% lower than it was at the start of 2022. Though, it has gained 151% since this time last year.

Motley Fool contributor Brooke Cooper 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.

More on Materials Shares

Man with rocket wings which have flames coming out of them.
Materials Shares

Guess which ASX All Ords share is rocketing 20% on lithium battery news

Not all shares have been caught up in the market selloff.

Read more »

Female miner smiling in front of a mining vehicle as the Pilbara Minerals share price rises
Materials Shares

Down 24% in a month, is the Pilbara Minerals share price now a bargain buy?

Could this be a lithium lover's delight or are Pilbara shares fraught with danger?

Read more »

Female ASX travel shares investor with surprised expression drinks a cup of tea while reading the newspaper at her desk
Materials Shares

Guess which ASX lithium share turned one sceptic into a bona fide believer

Green lithium extraction has changed the position of this lithium boom critic.

Read more »

Two male ASX 200 analysts stand in an office looking at various computer screens showing share prices
Broker Notes

Arafura stock sell-off continues, broker tips 35% upside

Recent weakness could be a buying opportunity for investors according to one broker.

Read more »

A man sits in deep thought with a pen held to his lips as he ponders his computer screen with a laptop open next to him on his desk in a home office environment.
Materials Shares

Piedmont Lithium shares: 150% upside or big short opportunity?

Investors will need to wade through the muck to determine if Piedmont Lithium shares are a good buy right now.…

Read more »

Happy man holding Australian dollar notes, representing dividends.
Dividend Investing

How to generate $20k of passive income from BHP shares

BHP could provide investors with a big pay check in 2023.

Read more »

shocked man with hands over his face with a declining graph in background representing falling CleanSpace share price
Materials Shares

Lynas share price resets 52-week low twice in one week

March has been a shocker for this ASX rare earths share.

Read more »

Female worker sitting desk with head in hand and looking fed up
Materials Shares

Piedmont Lithium share price sinks following short attack response

Piedmont Lithium has responded to a short seller attack on Friday.

Read more »