A raft of extremely exciting newsflow across the rare earths, niobium, and lithium projects from one of our top portfolio performers – Power Minerals (ASX: PNN) – effectively drove it to a market cap over $75 million at $0.305/share – up from our initiation valuation of $8 million market cap at $0.057/share in July. Its recent retracement to $24 million at $0.092/share in the broader critical minerals pullback presents an opportune time to examine the upcoming key catalysts that PNN is facing over the next few months. The company just unlocked US$4 million in development funding from its JV partner at the 292kt LCE Rincon project in the famed Lithium Triangle, which has a previous study outlining a 14 year mine life producing 7,061tpa of battery grade LCE at an operating cost of just US$7,786/t. PNN also recently released a conceptual development study at its 235kt LCE Incahuasi project in the same region, which outlined a 5,000tpa, 99.95% Li2CO3 operation that would run for 20 years. PNN has total LCE resources of 714,800t – and is expected to drill again next year with the goal of significantly growing its inventory of contained lithium.
This comes right after the lithium price rose over 50% since July as its market has continued showing signs of moving into a deficit again, with UBS hiking 2027 pricing forecasts by 150% and many ASX-listed stocks recording gains and liquidity not seen in almost three years. The major producers such as Pilbara Minerals (ASX: PLS), Liontown (ASX: LTR) and IGO (ASX: IGO) have shot up almost 300% – MinRes (ASX: MIN) has also gained almost 200% from the low despite a heavy debt load – and now liquidity is starting to spill over into the projects that made headways into development during the last cycle. The Shanghai Metals Market spot price currently sits around US$11,800/t. If UBS’ forecast is correct within a reasonable margin, then the US$27,000/t average selling price that PNN used in its 2023 study on Rincon would reaffirm the US$502 million NPV at a 10% discount rate, with a pre-tax IRR of 42% – potentially providing an opportunity for PNN to crystallize some value from the project through either its JV partner or another suitable party, which would allow the company to even more aggressively pursue its Santa Anna project in Brazil.
The Pocitos project, which is also part of PNN’s tenement package in the Lithium Triangle, presents an extraordinary opportunity to create a central processing hub due to its strategic location and rich infrastructure. Importantly, the 6,791 hectare site contains a significant fresh water resource – which is crucial for future DLE operations. There are extensive water and gas pipelines already in place, access to electricity and a railway that leads directly to the port, and a nearby healthcare centre. PNN plans to construct a lithium carbonate plant and transport its brine for processing there.
Argosy Minerals (ASX: AGY) is a useful peer to PNN in this instance, and it has recently risen over 460% to a $140 million market cap, as the market starts to place more value on its dormant 2,000tpa operation that had production halted due to a declining market environment not long after it began ramping up – and never produced any significant quantity of lithium. It was built for under US$20 million and the expansion was supposed to be producing at US$4,625/t LCE, which was subsequently increased to US$8,000/t LCE. AGY is using solar powered standard evaporation, which has long ramp up times as well as intensive land and water use – as opposed to DLE, which is where all the serious capital is being allocated to in the Lithium Triangle. Both of PNN’s projects will use proven Direct Lithium Extraction (DLE) technology, which has been pilot tested on brine at Incahuasi after minor concentration and recovered an exceptional 95% of lithium while eliminating 99.3% of impurities.
Located in the coveted Lithium Triangle, Incahuasi is adjacent to a huge development between Ganfeng Lithium and Lithium Argentina (TSX, NYSE: LAR) that has already had US$1.8 billion in investment and capex spent on it, while Rincon is nearby to Rio Tinto’s Rincon lithium brine project that it acquired for US$825 million in 2021, and which it is currently pumping US$2.5 billion in development capex to rapidly increase production from a 3,000tpa starter plant to a 60ktpa behemoth – all with DLE technology. In total, PNN’s project area contains seven mining leases across 147.07km² of this world-class region.
Virtually the entire market got the commodity’s demand profile wrong when the lithium price cratered throughout 2023, with electrification and energy storage not growing nearly as fast as forecasted, and electric vehicle sales growth losing some of its momentum after China ditched its subsidies and Tesla’s market penetration was somewhat lacklustre. Battery demand growth is now being heavily driven by electrification and energy storage, and UBS just significantly raised its forecasts to grow to 31% of total demand by 2030 – up from 20% currently.
PNN has placed itself in a strong position to take advantage of significant demand in a few key crucial commodities, and is backed by Next Investors. Our previous coverage on the company can be read here, where we took a look at the rare earth and niobium markets through PNN’s Santa Anna carbonatite complex in Brazil that has grades up to 3.36% Nb, 232.7g/t Ga and 62,000ppm TREO, and compared it to $340 million market cap St George Mining (ASX: SGQ). A litany of further high-grade assays from very aggressive drilling have since been hit, which will continue throughout 2026 with a 10,000m RC program that is set to begin next month – and PNN recently finalised its acquisition of the project.
Below is a map of PNN’s tenements (in dark green) in relation to the other major projects in the region owned by RIO and Ganfeng:
Source: PNN
The Market is Always Split on Lithium, but Volatility Should be Lower This Time
The take on lithium’s future price movements is something that often divides the world’s biggest investment banks, and the volatility during the rise and fall of the last cycle caught almost all of them off guard – so there should hopefully be extra caution taken into account with recommendations this time around.
Early in 2023, Macquarie thought lithium would average US$62,596/t throughout 2023 and remain steady at US$72,500/t until 2026, while Goldman Sachs was rocking the market with bearish reports calling for US$11,000/t. UBS jacked its price forecasts by 50% at the start of that year, placing them above consensus – before reversing completely. Morgan Stanley actually thought prices would fall to US$7,700/t in 2021 – right as lithium began its biggest run in history to over US$80,000/t.
While differences in forecasts are for the most part noticeably narrower and conservative this time around, the major investment banks still have their differences, with the most notable divergence being UBS seeing the market moving into a deficit during 2026 and prices peaking in 2027 – while Macquarie doesn’t see this inflection point coming until 2029. Both banks have upgraded price targets and buy/sell/neutral ratings across most of the major lithium miners, while Citi has flagged the restart of CATL’s mine, which is currently unlikely but could potentially occur if China grants an extension licence. In any case, it is the low-cost projects that are getting development ready that can provide a buffer against price suppression or pullback – and it is the brine projects in Argentina that are exhibiting this opportunity.
Modelling of energy storage growth has resulted in some hefty forecasts for subsequent growth in lithium demand, and the figures from EV growth are also substantial:
Source: Bloomberg
Electric vehicles are still the dominant driver of lithium demand, but energy storage is fast becoming a significant factor as spending continues to grow at increasing rates:
Source: Bloomberg, Adamas Intelligence
Major’s Backing for Direct Lithium Extraction (DLE)
Most of the experimental nature of DLE has withered away over the years in the face of repeated expansion to commercial scale at a variety of different operations, heavily de-risking its adoption for newer projects like PNN’s portfolio. There were 13 operating DLE projects that produced around 124,000 tonnes of LCE in 2024, which Benchmark Minerals Intelligence expects to grow to 470kt LCE by 2035 – contributing to 14% of total lithium supply at the time. There are several DLE methods that all revolve around selectively extracting lithium from brine without long duration or land use of evaporation ponds.
The strongest validation of the technology to date comes from €1.5 billion market cap Eramet (PA: ERA)’s Centenario-Ratones project, which like PNN is also in Salta, Argentina. After constructing and commissioning the plant in under three years – achieving production in late 2024 and buying out its Chinese JV partner Tsingshan for almost US$700 million – ERA is on track to be fully ramped up by the end of 2026 and producing at cash cost under US$5,000/t LCE.
US$1.5 billion market cap Standard Lithium (TSXV: SLI) is another serious player that had doubts about its DLE method for years, but has recently unlocked a few key funding rounds from a variety of sources over the course of 2025. These include a US$225 million grant from the US DOE to process lithium for domestic battery production, and a US$130 million capital raise from the market. SLI is now in talks for a US$1 billion financing package from a syndicate of banks and governments for its project that is expected to produce LCE under US$6,000/t.
Adjacent to PNN at RIO’s Rincon project, the mining giant is fully committed to DLE and gained enough certainty from its 3,000tpa starter plant to dive into its US$2.5B expansion to 60,000tpa using the same technology. There are also numerous pilot plants in process of proving that larger commercial scale is possible, such as Controlled Thermal Resources and Lake Resources (ASX: LKE).
PNN’s DLE partner, Sunresin, has racked up over 10 operational deployments in China and has consistently demonstrated above 90% lithium recovery from Rincon brines in lab trials, which is extremely reassuring. PNN’s study utilised brine extraction and on-site concentration by evaporation, which is then followed by transportation to a shared, central DLE facility at Pocitos for lithium recovery and eluate purification using the Summit denaLiTM technology – which would then be followed by conversion to lithium carbonate. Below is a flowsheet outlining the general concept of how lithium carbonate will be produced at Incahuasi:
Source: PNN
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Disclaimer: This article is for informational and marketing purposes only, and does not constitute financial advice or a recommendation to invest. All opinions expressed are our own. We may receive fees or other forms of compensation in connection with the publication of this content, and may own shares in any of the mentioned companies. Please do your own research and seek professional advice before making any investment decisions.