Resources Top 5: At last, something for lithium stocks to shout from the rooftops

Canadian and European critical minerals initiatives have provided a boost for the ASX lithium sector.

Finally, some good vibes for the ASX lithium sector. Pic: Getty Images

• Canada’s critical minerals reforms have been welcomed by Arizona Lithium

• European Metals’ Cinovec lithium project has been declared a Strategic Project by the EC

• Bauxite and gallium have been picked up as part of an acquisition by Western Yilgarn

Your standout small cap resources stocks for Wednesday, March 26, 2025.

Arizona Lithium (ASX:AZL)

There hasn’t been too much to shout from the rooftops in the lithium space for many months but a Canadian government critical minerals initiative is encouraging for those operating and exploring in that space in the country.

The government has introduced policy reforms aimed at strengthening the country’s critical minerals sector, which, of course, includes lithium.

These initiatives announced by new PM Mark Carney include measures designed to accelerate project development and investment in critical mineral supply chains.

Key elements include:

• removal of interprovincial trade barriers;
• streamlined project approvals through a new ‘One Project, One Review’ framework;
• the creation of a ‘First Mile Fund’ to boost early-stage investment;
• improved labour mobility across provinces; and
• increased participation by Indigenous communities.

These have been welcomed by Arizona Lithium (ASX:AZL) which says they align directly with its strategic priorities and will support the advancement of the company’s flagship Prairie lithium project in the resource-rich Williston Basin in Saskatchewan.

Prairie holds a 6.3Mt lithium carbonate equivalent resource over 345,000 acres of mineral rights and hosts an operational direct lithium extraction (DLE) pilot plant currently producing lithium chloride. 

A pre-feasibility study (PFS) is underway, with the project expected to contribute significantly to North America’s future lithium supply, critical for electric vehicle batteries and renewable energy storage.

“The Canadian government’s strong commitment to enabling investment, removing regulatory hurdles and building a robust supply chain for critical minerals is a positive signal for the industry,” AZL managing director Paul Lloyd said.

“These initiatives not only create a more supportive environment for our Prairie lithium project, but also reinforce Canada’s ambition to lead in the global energy transition. 

“We’re excited to play a key role in this effort while delivering benefits to local communities and the broader clean energy economy.”

Sayona Mining (ASX:SYA) is another expected to benefit from these reforms with its North American Lithium operations in Quebec at which concentrate production is continuing.

Its shares have been as much as 8.4% higher to 1.95c.

European Metals (ASX:EMH)

With lithium being a key raw material for the transition to a modern low carbon economy and critical for the development of the automotive industry and the modernisation of the power sector, Europe is also positive about strengthening its supply chain with locally sourced critical minerals.

The latest affirmation of this policy has come for European Metals with its Cínovec lithium project in the Czech Republic being declared by the European Commission as a Strategic Project under its recently implemented Critical Raw Materials Act.

This confirms the importance of Cínovec, the largest hard rock lithium and tin resource in Europe, in supplying battery-grade lithium chemicals to the continent’s battery supply chain and will bring added support from European institutions as well as accelerated and simplified permitting.

“The recognition by the European Commission of the importance of the Cínovec project is a significant milestone in the development of the project,” EMH executive chairman Keith Coughlan said.

“We recently announced the formal declaration of Cínovec as a Strategic Deposit by the Czech government and this escalating formal support for the project provides greater confidence in the future permitting and financing. 

“In short, it brings the production of battery-grade lithium chemicals from Cínovec one big step closer to fruition.”

Investors have also welcomed the EC decision, sending EMH shares to a 10-month high of 43c, an increase of 153% on the previous close.

Western Yilgarn (ASX:WYX)

Having two minerals in good shape at the same time is not that common but for Western Yilgarn bauxite is enjoying new interest and rising prices while gallium is a critical mineral increasing in value due to Chinese export restrictions.

The company has picked up both by acquiring the New Norcia project in WA’s Darling Range bauxite mineral field north of Perth.

This project is north of WYX’s Mt Julimar West bauxite asset and the company aims to move onto the ground as quickly as possible after gaining an Exploration Licence for which it has submitted an application.

Surface bauxite mineralisation has been defined over a 4.5km by 2km area with gallium defined over 4km by 2.3km within laterite and this is typical of Darling Range bauxite deposits.

Pointing to the potential at New Norcia, extensive rock chip sampling and drilling in the eastern portion of the tenure delineated high-grade gallium results up to 134.4g/t from surface as well as up to 50.4% total aluminium oxide. 

The company believes the project is well-positioned to exploit increasing demand for DSO bauxite given its proximity to Perth as well as major ports and infrastructure including the Millendon Junction rail line.

Gallium has potential to add to the value of the bauxite being a critical metal used in the defence industry and computer chips, semi-conductors and transistors, including light emitting diodes (LED), fibre optic cables and solar cell and electronic circuitry.

In December 2024, China banned exports of gallium, germanium and antimony to the United States in retaliation to the Biden administration imposing expanded restrictions on the sale of advanced US technology to China.

While not found in its pure form, gallium is generally a by-product of aluminum and zinc production hence its association with bauxite.

It is anticipated that US and European semiconductor chip makers will seek long-term supply contracts with future gallium suppliers outside China, including Australia.

Gallium is on the critical mineral list for Europe, America and Australia and it is anticipated the market will grow significantly from US$2.45b in 2024 to US$21.53b by 2034. 

WYX director Pedro Kastellorizos said the New Norcia project provided the company with scalability and excellent potential to increase bauxite tonnage and grade through further exploration and metallurgical testwork. 

“The location of the current resource is within trucking distance of a multi-user railway at a time of record alumina and bauxite prices,” he said. 

“The extensive bauxite zones have the potential for additional resource growth along strike and depth, concentrating to the west and south of the current tenure.

“Western Yilgarn will be planning the next phase of drilling within the project’s untested zone with a view of expanding the current mineralised footprint.”

Based on the high-grade gallium delineated through drilling, Kastellorizos said the metal may also provide a substantial credit to the economics of the project.

Shares have reached a 12-month high at 6.3c, up 75% on the previous close.

Sun Silver (ASX:SS1)

Sun Silver has continued a good run supported by strong silver prices, rising by 8.5% to 77c and steadily on the improve from 57c on March 4.

The latest positive news has come in the form of a 57Moz increase in the resource at its Maverick Springs project in the ‘Silver State’ of Nevada.

SS1’s JORC resource estimate now stands at 480 million ounces of silver equivalent at 68.29g/t AgEq, which represents the largest pre-production primary silver deposit on the ASX.

The silver-only resource was notably increased in ounces and grade to stand at 296.5Moz at 42.20g/t.

And with the resource open in all directions and at-surface and near-surface mineralisation shown by historic drilling to lie above the southern portion of its zone, the company sees plenty of room to keep building its collection.

“Our drilling continues to deliver exceptional value, with each new ounce from the 2024 drilling campaign delivered at a cost of just $0.058,” Sun Silver MD Andrew Dornan said.

“Crucially, new resource modelling has also highlighted the potential for extensive mineralisation at- or near-surface in the southern part of the deposit, opening up significant new development opportunities and enhancing future production potential.”

Koba Resources (ASX:KOB)

Australia’s uranium hotspot remains South Australia with the Northern Territory also still playing the game.

Another contender in the yellowcake stakes in SA is Koba Resources, which has made three new high-grade discoveries within its Yarramba uranium project in the last 12 months, next door to operating mines.

The latest find, Everest, is immediately north of Boss Energy's (ASX:BOE) 10.7Mlb Jason's Deposit and the Honeymoon uranium mine. 

Other new high-grade discoveries (>1000ppm) for Kobainclude Berber (1.6m at 1026ppm) and Chivas (0.5m at 1028ppm).

Managing director and CEO Ben Vallerine said this early exploration success demonstrated the considerable potential to continue to discover additional high-grade uranium within shouting distance to two operating in-situ recovery (ISR) mines.

Particularly when you consider the extremely fertile Yarramba Palaeochannel hosts more than 50Mlbs of U3O8.

“This paleo channel hosts 50 million pounds of uranium to the south of us, and it’s been sparsely explored through our project,” he said.

“We’re in the premier uranium district in Australia. There are two producing operations within 120 kilometres and we have 5000 square kilometres of tenure and over 250 kilometres of interpretive paleo channels that are all highly prospective to host similar style uranium deposits.”

Not to mention, too, the company’s tenure already hosts a known deposit – the Oban uranium deposit – which several of the discoveries have been quite close to.

This article does not constitute financial product advice. You should consider obtaining independent financial advice before making any financial decisions. While Sun Silver, Western Yilgarn, Arizona Lithium and Koba Resources are Stockhead advertisers, they did not sponsor this article.

Originally published as Resources Top 5: At last, something for lithium stocks to shout from the rooftops