Can an ASX lithium share that's already gained 320% over the past 12 months offer investors more profits in the year ahead?
While there are no guarantees in life, and certainly none in equity markets, Harrison Massey, stockbroker at Argonaut, believes that lithium explorer Global Lithium Resources Ltd (ASX: GL1) could do just that.
The ASX lithium share has a market cap of $500 million. And as Massey notes (courtesy of The Bull), Global Lithium "has an impressive register with Mineral Resources Limited (ASX: MIN) owning 9.9% of the company".
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Why this ASX lithium share is rated as a buy
"GL1 recently raised $120 million to acquire the remaining 20% of the Manna Lithium project from Breaker Resources NL (ASX: BRB)," Massey said.
That capital raising was announced on 26 October, after the ASX lithium share emerged from a trading halt.
Investors sold off the stock on the day, as Global Lithium announced it was raising the funds at $2.25 per share. That was 13.8% below the share price before the miner entered its trading halt.
But Global Lithium's chair Warrick Hazeldine was upbeat about the prospects with the new funding secured. According to Hazeldine:
The outstanding on-the-ground exploration work completed by the Global Lithium team over the past six months has delivered impressive results at Manna, affording us the opportunity to now present an offer to Breaker which we believe is a win-win for both companies.
The acquisition of the underlying tenements provides Global Lithium with a clearer development pathway as we look to conclude these development focused studies in late 2023.
Argonaut's Massey is also bullish on the potential for the ASX lithium share's Manna project.
"GL1 has an existing resource of 20.4 million tonnes of lithium oxide across its two assets," he said. "We're anticipating a substantial mineral resource upgrade at the Manna Lithium project in December 2022."
Global Lithium share price snapshot
Global Lithium is a relative newcomer to the ASX, having listed on 6 May 2021. Since then, the ASX lithium share has rocketed an eye-popping 610%.
For some context, the All Ordinaries Index (ASX: XAO) is up 2% over that same period.
