Elevra Lithium (NASDAQ: ELVR, ASX: ELV)

The company had previously advised that its spodumene concentrate production had been lower than planned during the December-2025 quarter, but in terms of effect on revenue the lower production was more than offset by a rise in the lithium price.

The financial results were difficult to assess due to the effects of one-off items, including the reversal of a previous impairment and the costs associated with the Piedmont merger. However, ELVR is in a strong financial position, with working capital of US$64M and only US$13M of long-term debt, and is well positioned to profit from a much higher lithium price over the quarters ahead.

The stock offers substantial and immediate leverage to changes in the lithium price. As a result, the stock price responded very well to the large increase in the lithium price that began in June-2025 and recently has corrected sharply in response to a pullback in the metal price.

With lithium near its current price we can make the case that ELVR is worth around US$100/share based solely on the potential profits from its NAL mine. Furthermore, the company has a healthy balance sheet and only moderate downside risk based on the reasonable assumption that the lithium price will not return to anywhere near its 2025 low. Therefore, near its current price the stock’s intermediate-term risk/reward is very attractive and it will remain in the TSI List.

The report contained negative news. Firstly, spodumene concentrate production fell 15% quarter-over-quarter. Secondly and more importantly, FY2026 (the financial year ending 30th June 2026) was downwardly revised from 195K-210K dmt to 180K-190K dmt. In response, the stock sold off sharply.

However, the issues that led to the lower FY2026 production guidance are short-term, but longer-term guidance remains unchanged. Moreover, the company had an average sales price of US$1000/dmt during the quarter and had positive gross margin at this price, whereas the current price is around US$2000/dmt. Therefore, even with the lower production the company should be very profitable from this point forward provided that the lithium price retains the bulk of its gain.

Near the current lithium price, we can justify US$100/share for ELVR (equivalent to about A$14 for the company’s ASX-traded shares) based solely on production from the NAL mine. However, the company also owns valuable development-stage assets.

The previous plan was announced last September and involved investments in new/upgraded plant that would result in spodumene concentrate production increasing from the current annual rate of around 200Ktpa to 315Ktpa in late-CY2029. The new plan involves a staged approach that would result in an initial 15-20% production increase in mid-CY2027 and a further increase, using a temporary mobile crushing circuit, to the 315Ktpa objective in early-CY2028.

The company expects to issue an updated Scoping Study early in the June-2026 quarter that incorporates the accelerated expansion.

This is positive news.

The merger with Piedmont Lithium and a large financing were completed late in the September quarter, so the three months ending December-2025 will be the first full quarter for the company in its current form.

Production during the September-2025 quarter was down from the record-setting preceding quarter due to issues that since have been resolved. However, the quarterly production result of 52,000 dry metric tonnes (dmt) of spodumene was still good and the company remains on track to achieve its FY2026 production guidance of 195,000-210,000 dmt.

ELVR’s cash balance increased by US$76M to US$149M during the quarter due to the merger and an equity financing, but at the current lithium price the company is cash-flow negative. The lithium price appears to have bottomed, though, and is slowly increasing. ELVR offers substantial leverage to an improvement in the lithium price.

A daily chart of the ASX-traded ELV is shown below. It’s possible that ELV and other lithium mining stocks are where gold mining stocks were three years ago: at the start of a cyclical bull market.

With its strong balance sheet and leverage to the lithium price, ELVR is a good stock to accumulate on weakness if, like us, you expect the lithium price to trend upward over the years ahead.

There is no fundamental difference between owning the ASX-traded shares and owning the NASDAQ-traded shares, but to make it easier for most of our readers we have replaced the ASX symbol with the NASDAQ symbol in the TSI Stocks List. The stock’s liquidity is adequate on both exchanges.

Also, we have changed Elevra from a trading position to a long-term position. The main effect of this change is that we will track the company’s news more closely in the TSI commentaries.

The US$924M NPV equates to about US$55 per NASDAQ-traded ADR (ELVR) or A$8.30 per ASX-traded share. These figures are more almost 3-times the current market prices, and Elevra owns valuable development-stage assets in addition to its NAL mine.

The problem is that the above-mentioned NPV is based on a lithium (LiO2, 6% grade) price that is about 50% above the current market price. However, the PEA highlights the substantial leverage that SYA.AX/ELVR offers to an increase in the lithium price.