Bulletin Resources (ASX: BNR) shares are up 21% today. This follows the strong rise in BNR shares over the past few weeks. Bulletin is getting into lithium - because of course everyone is getting into lithium these days. This is what makes us think that the lithium boom isn’t going to last forever, exactly and precisely because so many people are not just looking for it but finding it also. This is also what makes us wary of the metal and those mining for it - more supply will inevitably effects prices.
But that announcement from Bulletin. The substantial point of interest here is how small a thing it can be that produces a 21% jump in a share price: “The Environmental Protection Authority (EPA) has decided it is not necessary for the EPA to assess the environmental impacts of Bulletin’s Ravensthorpe Lithium Project • The EPA has paved the way for DMIRS to process the Native Vegetation Clearing Permit at Bulletin’s Ravensthorpe Lithium Project • The decision means that the EPA have now completed their investigation and review of the drilling application. There is no appeal process for this EPA decision”
Note that this doesn’t actually mean that Bulletin now has the right to drill in order to explore further. It only means that this specific bureaucracy is not going to demand a permit so it’s now possible to proceed with getting the other permit from the other bureaucracy. OK, so we should all be aware of the environment and all that but a slightly absurd level of paperwork here, perhaps?
Bulletin Resources share price from Google Finance
We’d also note that this isn’t proof that there is lithium there and it’s most certainly not proof that there’s an economic deposit. It’s just that it’s now likely that drilling to find out whether there’s economic lithium there is now likely to be possible. So, 21% might be a little too rich as a rise, opinions will differ.
As to that larger issue, lithium itself. As we’ve said when discussing Core, Nickelsearch and Leo Lithium, in the long term we expect the price to come back to something like production cost. Exploration is showing that there’s no absolute shortage of lithium out there and so little to no scarcity value. Good deposits will be worth more than marginal, of course. But that’s what the action is, between the valuation of good and rich deposits and those not so much so - not a find of lithium itself.