June 14th, 2021 | 08:02 CEST
Aixtron, Silver Viper, NIO - Bright prospects
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"[...] Internally we expect the resource to significantly grow the deeper we mine. [...]" Dennis Karp, Executive Chairman, Manuka Resources
The metal with two faces
Along with gold, silver is one of the most popular investments for many investors who want to protect their assets against inflation and crises. For this reason alone, an investment in the white metal is attractive in the current environment. Inflation in the USA once again rose more strongly than expected. In May alone, consumer prices climbed by precisely 5.0% compared to the previous month, the highest value since 2008. However, instead of taking action against the escalating price increase, central banks still see no reason to abandon their loose monetary policy and raise interest rates, which clearly speaks in favor of an investment in precious metals.
In addition to being a safe haven, silver is also an industrial metal and an increasingly important one due to the planned energy transition. Studies from the US show that annual silver demand could grow by almost 90% from the current 2,300 tons to about 4,300 tons by 2035, which should mean excess demand and sharply rising prices. An investment in silver mines promises disproportionately high profits compared to the purchase of bars or coins, as these react more strongly to a permanently rising base price. For example, if a mine has production costs of USD 20 per ounce and the price rises from USD 22 to USD 24, the profit doubles. Mining stocks have not yet fully participated in the price in the current environment and still have enormous catch-up potential.
One of the most promising junior exploration companies is Silver Viper, which belongs to the Belcarra Group and focuses on the state of Sonora in Mexico. The South American country is historically by far the largest silver producer globally, followed by Peru and China. The Canadians acquired the La Virginia project from Pan American Silver and hold 100% ownership of the La Virginia concessions. The focus is also on discoveries at El Rubi, located 4 to 5 km north of the historic main work area. Initial exploration work indicates a significant zone. The El Rubi area offers potential for both open pit and underground mining.
The first published estimates were groundbreaking for Silver Viper. Indicated resources are believed to be 154,300 ounces of gold and 6,929,000 ounces of silver, and suspected resources are believed to be 260,300 ounces of gold and 12,941,300 ounces of silver. In addition, management believes that the El Rubi Zone is open both laterally and at depth and can be expanded with further drilling. There are several untested targets on the project that are still scheduled for the exploration program this year. In order to accomplish the promising projects, the closing of a private placement in the total amount of CAD 6 million was announced last week.
With this, Silver Viper is well-capitalized to consistently produce good news flow this year. The long-term goal of the CEO, Steve Cope, is to sell the project to a larger producer. Already, the shareholder base, 60% of which is made up of institutional investors, is impressive. The last few weeks have also seen an increase in buying by retail investors, especially with the OTCQB listing in the US. Silver Viper is one of the most interesting junior explorers, partly because of a long-term rising gold and silver price.
Analysts in party mood at Aixtron
A series of large orders caused a massive increase in forecasts for the equipment manufacturer for the semiconductor industry. At the end of April, after the announcement of the figures for the first quarter, the outlook was raised upwards. Above all, the strong demand for components for the semiconductor industry and the digitization boom give the Herzogenrath-based Company a positive outlook for the future. In terms of incoming orders, management now expects a range between EUR 420 and 460 million, compared to a previous expectation of a maximum of EUR 380 million. The EBIT margin is likely to settle between 20 and 22%. Previously, only a maximum of 18% was expected.
The analyst community also celebrated a significantly more positive outlook. Both Deutsche Bank, Berenberg and Barclays raised their price targets for Aixtron. Berenberg made the most significant jump in the price target. So the expectations were increased from EUR 20 to now EUR 28.
German premiere for NIO
Currently, the Chinese car manufacturer NIO is struggling with the chip shortage. Due to this, delivery figures were down for the third month in a row. However, the Company announced that this dip should be made up as early as June. The confidence is also reflected in the partnership with JAC. Here, in addition to an extension of the cooperation, a production of 240,000 units per year was agreed, which means a doubling compared to the status quo. Expansion into Europe is expected to contribute to higher sales figures. The first pre-orders for the ES8 SUV will be possible as early as July, but only for Norway. In Germany, the NIO vehicles are expected to start rolling along the roads next year.
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