November 25th, 2021 | 14:31 CET
BASF, Osino Resources, Standard Lithium - Why does nobody believe it?
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"[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
BASF - Trade union steps into the breach
Gasoline, electricity and food, everything has become more expensive in the current year. The only thing that is not rising in line with inflation is employee wages. The Mining, Chemical and Energy Industrial Union (IG BCE) is now demanding significantly more money for the approximately 580,000 employees in the German chemical and pharmaceutical industries. The goal must be to sustainably increase people's purchasing power, said Ralf Sikorski, deputy chairman of the Mining, Chemical and Energy Industrial Union, in Hanover on Tuesday.
"There is no question that in the end, there must be an increase in pay above the rate of inflation," Sikorski said, without giving a precise figure for the demand. To do this, one will look at the inflation rate in the spring, when the discussions with the employers are to start. So far, the employers have rejected such demands.
In the meantime, the chemicals group is making further progress with its targets for reducing CO2 emissions. Following RWE and Orsted, further cooperation with Air Liquide has now been initiated. The two partners plan to build the world's largest cross-border value chain for carbon capture and storage (CCS). The aim is to significantly reduce CO2 emissions from industry in the port of Antwerp. In the first decade of operation alone, 14.2 million metric tons of CO2 can be prevented.
Meanwhile, the BASF share is heading for support at EUR 62.00 due to the weak overall market. In the long term, the stock remains interesting.
Osino Resources - Ideally positioned
After the gold price fell below the USD 1,800 mark again, a test of the year's lows at USD 1,680 is likely from a technical perspective. Gold is currently not in vogue, the stock market is booming, and the mainstream still believes in a temporary inflation rate. However, this is likely to change in the first quarter of the year at the latest, when it will be determined that the high inflation rates are more of a longer-term phenomenon after all. Therefore, it is already advisable to start looking for promising mining producers or exploration companies in order not to miss the long-term expected increase in the gold price.
One company consistently delivering good exploration results and whose management has already proven its ability is Osino Resources. In addition, there are perfect conditions in terms of infrastructure and jurisdiction in Namibia. There, the Canadian Company maintains the Twin Hills project, which covers 6,700 sq km. The deposit is centrally located in the high-grade Damara sedimentary mineral belt along strike from the producing Navachab and Otjikoto gold mines. In the past, management had passed its baptism of fire with the Otjikoto mine, selling it to B2 Gold for CAD 180 million. CEO Heye Daun has a similar scenario in mind this time around.
In the second quarter of 2022, the experienced manager expects new results around the project, which will provide clear indications of Osino Resources' promising outlook. Above all, the first estimate from the second quarter of this year of 430,000 ounces at 1.00 g/t gold (indicated) or 1.47 million ounces at 1.08 g/t gold (inferred) is to be significantly surpassed here. Sprott Equity Research is sure that the currently planned drilling program over 75,000m should bring further high-grade shoots to the surface and assigns a price target of CAD 2.55. Currently, the stock is trading at around 50% below the target price at CAD 1.22.
For the further steps, Osino Resources procured money on the capital market. Osino placed 9.545 million shares at CAD 1.10, combined with a half warrant at CAD 1.35 for 22 months. The capital will be used primarily for exploration purposes at the Twin Hills gold project and is also planned for assays, technical studies, acquisition of surface rights and general corporate purposes. Thus, the Company is well-financed for the next year.
Standard Lithium - Drumbeat
Unlike gold, the lithium market is so overheated that experts already see a kind of bubble forming, at least in the short term. However, in the long term, the lithium price is also likely to continue its upward trend; demand from the battery industry is too high and supply too scarce.
Standard Lithium is a bit reminiscent of the New Market era of the early 2000s. The Company, which owns two projects, Arkansas Smackover and Bristol Lake, currently makes neither revenue nor profit. Nevertheless, the stock market value is a proud EUR 1.15 billion. With a capital increase of USD 100 million, the next bang for the buck has now followed. With Koch Investment Group, the Canadians receive a new investor, who acquires almost 13.5 million shares at a share price of USD 7.42.
"We are entering an important phase for Standard Lithium and are excited to begin it with a globally recognized industry leader like Koch Strategic Platforms as our partner," said Robert Mintak, CEO of Standard Lithium.
Rising inflation is one of the most important issues currently being discussed in the capital markets. If this lasts longer, there is little going past the precious metal gold. Osino Resources is poised for a long-term gold market rise. In contrast, Standard Lithium has already run too far.
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