FP says Lithium slump weighing on Indigo Exploration
FP says Lithium slump weighing on Indigo Exploration
2024-02-06 09:28 ET - In the News
The Financial Post reports in its Tuesday edition that Indigo Exploration boss Paul Cowley decided two years ago to shift his focus to lithium from gold when his company acquired the mineral rights for multiple small claims containing the light metal in central Alberta.
The Post's Naimul Karim writes that Mr. Cowley thought it was the perfect time to make the move.
"There was a lot of excitement," said Mr. Cowley. "Everything was there.
There was investor interest in our project, we were able to raise money and advance the project up to a certain point." Two years on, however, "the wind just died down," said Mr. Cowley.
His company was affected by the sudden slump in lithium prices, which significantly fell in 2023, after rising many fold in 2022 as the market swung to a surplus.
The spot price of lithium hydroxide in 2022 averaged $67,279 per tonne, much higher than the average price of $13,656 over the three years to 2021.
However, the price is now expected to fall to $30,000 per tonne by 2025.
Falling prices erode confidence in the market, leading investors and some companies to look into other in-demand commodities for profit.
Mr. Cowley said he is "in a standstill position because of the circumstances."
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