The FTSE 100 was heading for a Santa’s Rally as higher oil prices helped lift London’s leading index on Monday.

Brent oil prices were 3% higher at the time of writing on Monday after major oil and shipping companies said they were rerouting their vessels away from the Red Sea after Houthi rebels conducted a series of drone attacks over the weekend.

BP and Shell were 2% and 1.5% higher after BP said they would avoid the area, and oil prices touched the highest levels in over a week.

The commodity-heavy FTSE 100 didn’t share the enthusiasm evident in US stocks after the Federal Reserve signalled they would hike rates in 2024. However, a rally in oil provided London with its own version of festive cheer as miners joined in BP and Shell’s rally.

The FTSE 100 is over 2% higher in December so far and is well placed to provide investors with an early present in the form of a Santa’s rally.

Vodafone was the FTSE 100’s top riser following reports that the telecom giant is seeking to dispose of its Italian business through a merger or disposal. Some areas of Vodafone’s European business have dragged on performance, and getting rid of their Italian unit will be welcomed by shareholders.

Vodafone shares were 3.5% higher at the time of writing.

Rolls Royce ticked higher on Monday after reports they were eyeing the deployment of mini-nuclear reactors in Ukraine, demonstrating they are not just a jet engine maker.

“There was a reminder that Rolls-Royce – one of the best performing stocks anywhere this year – has more strings to its bow than making engines for airplanes, amid newspaper reports it is in talks to provide small modular reactor technology to Ukraine as the country looks to build out its nuclear power capacity,” said AJ Bell investment director Russ Mould.

“The modest move in the share price suggests shareholders are not expecting any near-term impact on profit or cash flow, however.”

Premier African Minerals and Kodal Minerals are two of London’s foremost ‘lithium stocks’ operating African lithium mines. They are well-placed to enjoy any growth in lithium demand to feed the burgeoning electric vehicle battery industry.

There are still fantasists who think they’ll be driving a diesel car in 15 years. However, it’s clear that by the end of the next decade, almost all vehicles will be electric, powered by some form of battery or hydrogen fuel cell. Whether the majority of batteries are lithium-ion or sodium-ion, or indeed hydrogen power cells, is anyone’s guess.

Should hydrogen or sodium-ion powered vehicles gain material traction in the coming years, lithium prices could plummet, making the economics of Premier African Minerals and Kodal Minerals’ mine unattractive.

One may speculate that the drop in lithium prices this year reflects not only a slowing demand for EVs but also concerns about the future of lithium-ion batteries.

That said, lithium is at the forefront of most EV manufacturers’ plans for the coming years, and demand for the white metal is set to grow in the near term.

This underpins the investment case for both Premier African Minerals and Kodal Minerals.

In the interest of diversification, it is probably a good idea for investors prepared to take a higher level of risk in junior miners to buy both. There are also excellent lithium mining ETFs available.

However, in this article, we make a concise assessment of both Premier African Minerals and Kodal Minerals as investment propositions in 2024.

Premier African Minerals shares

Premier African Minerals shares have resumed a holding pattern as investors await crucial news on production.

As we have explained previously, there is tremendous value in the ground at Zulu. Their Chinese partners Canmax, know this or they wouldn’t be involved.

Premier African Minerals’ Zulu lithium project contains 20.1Mt @ 1.06% Li2O & 51.05ppm Ta2O5 at a 0.5% Li2O cut-off.

The problem sits with how much of this value is realised by Premier African Minerals shareholders.

The company freely issues new shares to settle invoices and provide working capital. All of this is diluting shareholders.

In addition, we have not gained any real insight into whether their partners will call in their penalty payments.

Premier said their partner remains ‘supportive’ as far as they haven’t called for penalty payments. Canmax probably hasn’t yet called the payments in because they know Premier African Minerals doesn’t have the cash.

We will see how supportive Canmax are if the Zulu lithium mine is up and running by the end of February.

Premier African Minerals recently announced major upgrades and changes to the processing plant at Zulu, which will delay the ramping up of production well into 2024.

Despite the clouds gathering over Premier African Minerals in recent months, there is a silver lining.

The company confirmed Zulu is producing lithium offtake of the required grade. By simulating the processing capabilities of a properly functioning facility, Premier said they had produced offtake at a Li20 grade of 7.4%.

It is unlikely the average grade of the plant’s lithium offtake is as high as this when spodumene is processed at scale, but it does show the project is able to produce the grade required by their offtake agreement.

The potential upside in Premier African Minerals is probably greater than Kodal at this point. However, it will require a brave investor to take a meaningful position here, given the problems the company have experienced to date. Much of which is of their own doing.

Kodal Minerals

Kodal Minerals share trades more than 50% lower than 52-week highs, despite completing their financing package with Chinese partners for mine construction at the Bougouni Project.

Like Premier African Minerals, Kodal Minerals has a world-class lithium resource.

After an extensive drill campaign through 2023, Kodal Minerals’ upgraded the Bougouni Project’s resource to 31.9 Mt at 1.06% Li2O, with 337.2kt contained Li2O. Kodal says it has further targets to drill, which may increase the resource further.

Just as Premier African Minerals ran into problems with their offtake partners this year, Kodal was hampered by delays and uncertainties in its relationship with its funding partners. However, unlike Premier African Minerals, these have now been rectified, and the company is focused on the construction of its mine.

Kodal Minerals are in the very early stage of mine construction, having said road construction would start earlier this year. Kodal has set an ambitious target of achieving production at Bougouni within 12 months of mid-November this year.

One would expect investors to turn their attention to Kodal Minerals shares as this production target approaches. However, the short-term promises little of interest and Kodal shares may drift into the summer.

Kodal Minerals has huge gold resources that may prop up the share price if the lithium project hits bumps in the road in 2024.

Table-top gaming company Games Workshop announced an agreement with Amazon to produce films, TV series, and associated merchandise.

Games Workshop shares have stormed higher over the past ten years as the popularity of their games grew, and they looked beyond the painting of figurines to digital gaming formats and entertainment, utilising their characters and branding.

The Amazon deal is something of a holy grail and is a testament to Games Workshop’s broad appeal, which is likely to be boosted when the productions are released.

Games Workshop rose 1.9% in early trade on Monday.

“Games Workshop, the producers of fantasy roleplaying games and miniature models have announced that their earlier co-operation agreement to explore licencing deals with Amazon Studios has progressed,” said Steve Clayton, head of equity funds at Hargreaves Lansdown.

“Amazon have been granted exclusive rights to develop films and TV series set within Games Workshop’s Warhammer 40,000 universe with an option for further development of Games Workshop’s intellectual property in the movie and TV space.

“Perhaps the day will come before too long when parents can simply send their kids off to the cinema to watch this stuff rather than have to spend half their weekends doing the model-making and painting on Junior’s behalf? Whatever happens, Games Workshop are not predicting any benefit to income from the deal in the 2024 financial year, but investors still welcomed the news, pushing the shares up 2.5% in early trade.”