What is Going on With Nemaska Lithium Stock?

Nemaska Lithium (TSX:NMX) is a Quebec-based lithium company. Shares were down 4.69% in mid-afternoon trading on February 15. The stock has dropped over 50% in 2019 so far.

What is behind the weakness at Nemaska Lithium? Nemaska’s stock plunged after the company announced that it would revise its budget for the Whabouchi lithium mine and Shawinigan electrochemical plant by $350 million.

The company has received funding from the provincial and federal governments. Nemaska has made a strong push during the global rush for lithium production, but the market is starting to calm down.

Lithium started off hot in 2018, but the spot price has since experienced steady declines. The slip in price has complicated matters for junior miners that were looking to get in on the global boom.

Fortunately, Nemaska was able to secure $1 billion in funding for the construction of the Whabouchi mine and conversion plant in Quebec. It looks like Nemaska will be the only miner to come out of the last few years with a producing mine.

A fully operational mine is an exciting prospect, but investors are likely not pleased with Nemaska after its upward budget revision at Whabouchi. Still, the stock looks like a big bargain today.

Shares had a stunning RSI of 12 as of this writing, indicating that the stock has plunged deep into oversold territory. The lithium boom may be cooling off, but Nemaska was one of the few junior miners that took advantage of the rush. Investors should pounce on the low price point.