Kodal Minerals (LON: KOD) share price has nosedived in 2023 as concerns for the lithium miner continues. Its stock has crashed in the past three straight days and moved to the lowest level since June 2021. It has collapsed by more than 57% from its all-time high, giving it a market cap of more than 33 million pounds.
Lithium demand to rise
Kodal Minerals is a relatively small mining company that focuses on the lithium and gold mining industry. The firm, which is listed in the London Stock Market, opiates a lithium development and exploration project in Mali. It has a plant at the Bougouni Lithium project at the southern part of the country.
Lithium is an important part of the future of energy. It is an irreplaceable component used in the manufacture of batteries that are used for both energy storage and transportation. As the world transitions in this direction, it will need as much lithium as possible. It is estimated that the world’s lithium requirements would need 74 new mines to meet demand.
Kodal Minerals is yet to start producing lithium in this mine. Therefore, it should be viewed through the same lenses as that of most biotech companies that spend resources hoping that their discoveries will get approval by regulators.
In the mean time, Kodal Minerals needs a lot of financial resources before it starts mining. This month, the firm said that it will apply for approval to construct its dense media separation plant in Bougolini in Mali. The firm hopes that accelerating this development will help it take advantage of the vibrant lithium prices.
At the same time, the firm hired Cannacord Genuity as its broker. This decision was seen by many as a sign that the company wants to raise capital.
Kodal Minerals share price forecast
The weekly chart shows that the Kodal Minerals stock price has been in a strong bearish trend in the past few months. And this week, the shares managed to move below the important support level at 0.2100p, which was the lowest level this year.
The stock has dropped below the 50-week and 25-week moving averages, which is a bearish sign. It also moved to the 61.8% Fibonacci Retracement level. Therefore, the shares will likely continue falling in 2023 as sellers target the next key support level at 0.1250p.
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