FTSE AIM catalysts: 5 lithium shares ready to rocket higher Part 1

Premier African Minerals (LON:PREM), First Class Metals (LON:FCM), Kodal Minerals (LON:KOD), constitute the first three of five of the best FTSE AIM lithium plays ready to rocket higher on near-term catalysts.

I have been covering the exploratory lithium sector for many years now — and not just the London-listed small caps, but also many of the most promising outfits in North America and the growth stories of Pilbara Minerals and Core Lithium on the ASX.

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And what’s becoming clearer is that 2023 is the time of the FTSE AIM small caps. I have covered the following five companies in great detail over the years, and all five are ready for that next catalyst to send the share price to new heights.

1. First Class Metals (LON: FCM)

FCM received the UK Investor Magazine IPO of 2022 award and has released several bullish recent RNSs which has renewed interest in the company. Long-time Premier African Minerals backer, James Goozee, has also invested £300,000 at 16p per share, showing confidence in the company’s long-term prospects.

One of FCM’s latest updates includes the signing of an agreement with Nuinsco Resources Limited regarding the Zigzag lithium project in Ontario. This signing completed the process outlined in the ‘Exclusivity Agreement’ announced on 12 December 2022 for the ‘lithium property earn In.’

Zigzag boasts historic grades at surface up to 1.68% lithium over 7.9m and 0.168% tantalum over 2.54m. Additionally, the claim group covers the historic Tebishogeshik occurrence, as well as other mineralized occurrences. Sampling by Nuinsco returned strongly anomalous lithium, tantalum, and rubidium, peaking at 3.55% Li20 with significant tantalum and rubidium results at 836 ppm Ta₂O5 and 4,003 ppm Rubidium Rb₂2O.

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Moreover, the pegmatite hosting the deposit is reported to be 800m in length and 20m thick at the surface, and it is located just 10.5km from Green Technology Metals’ Seymour Project alongside several other producing hard rock lithium properties. The project is also close to nearby current key infrastructure, which will significantly reduce any capex costs.

Furthermore, FCM is pleased to announce that it has received payment in full of the 2022/3 Ontario Junior Exploration Grant ‘OJEP’ for work carried out on the flagship North Hemlo property.

2. Premier African Minerals (LON: PREM)

PREM’s Zulu Lithium Project has achieved a truly remarkable feat within just one year, transforming from a site of undeveloped bush and scrubland to a fully functional pilot plant.

Zulu is considered one of the largest undeveloped lithium reserves globally, and there are several exciting developments in the pipeline, including confirmation of production, first sales, receipt of income, assay results, resource upgrades, and a definitive feasibility study. Furthermore, there are plans to optimize the pilot plant, increase the plant’s output, implement solar energy power plans, and obtain approval for a mining license application for the wider EPO.

Despite minor delays, production is expected to commence shortly, and Premier African Minerals CEO, George Roach, is optimistic about first shipments imminently. However, investors should be aware that the commissioning of a plant often comes with minor issues, and that there is a risk associated with the prepayment interest currently being charged by partner Canmax.

Nevertheless, it is beyond unlikely that Canmax will walk away from Zulu, and long-time investors are excited about the possibility of a buyout or a larger strategic investment from the partner, who already holds a 13% stake in PREM and 50% of offtake rights.

Additionally, the project retains grandfathered rights for selling unprocessed ore, and could benefit from the hundreds of millions of dollars the Chinese are investing in lithium mines and infrastructure in Zimbabwe, which would significantly reduce their capex costs.

3. Kodal Minerals (LON: KOD)

Kodal Minerals has a bright future ahead with its world-class Bougouni Lithium Project in Mali. The project has been the subject of multiple resource upgrades and is comparable to Premier African Minerals’ (PREM) Zulu Lithium Project in Zimbabwe in terms of its size and potential.

KOD has already secured a conditional funding package worth $117.75 million with Hainan Mining and its subsidiary Xinmao Investment Co. The deal will see Hainan invest $100 million into a new joint venture subsidiary Kodal Minerals UK, which will be majority-owned by Hainan, with Kodal managing the mining work.

The funding package covers the $65 million required to bring the proposed Dense Media Separation (DMS) plant into production, leaving $35 million for working capital, further drilling, and increased exploration. Once the DMS plant is online, it will be able to ramp up to 130,000tpa of spodumene concentrate at pace. KOD has a conservative lithium price estimate of $2,080/tonne, which would yield $270 million in revenue every year, with KOD entitled to half of these profits under the JV, or $135 million every year.

KOD’s market cap is currently only £130 million, indicating significant upside potential. With China’s Hainan Mining providing the necessary funding and investment, there is a good chance that KOD will become a lithium money-spinner, assuming the lithium price holds up and there are no major problems between now and production.

The recent announcement that Hainan has received all necessary approvals from the Chinese Government authorities to allow it to complete its funding and investment is a major milestone for KOD. KOD is now focused on completing the reorganization of its subsidiary companies to have all its Mali lithium assets held within Kodal Mining UK (KMUK), including the Bougouni project.

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