March 2nd, 2023 | 21:51 CET
BYD with share price jump and sales figures: What are American Lithium and Tocvan Ventures doing?
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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
For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.
Tocvan Ventures: Could take off with newsflow in 2023
Gold and silver stocks continue to struggle in the new year. But for many experts, it is only a matter of time before the knot bursts. For too long, stocks have ignored the high prices of precious metals. A trigger could be the expected end of interest rate hikes in the summer. Investors should position themselves for this in the coming weeks. In addition to basic investments such as Barrick Gold and Newmont, exploration companies offer disproportionate opportunities. For those who like it more speculative, for example, Tocvan Ventures is an option. The Canadians own two gold-silver projects, Pilar and El Picacho, in the Mexican state of Sonora. It is considered mining-friendly, and most of the gold produced in Mexico comes from there. After Tocvan had reported high-grade mineralization last year, the Company received new funds for further drilling as part of a capital increase at the beginning of the year. Accordingly, investors can expect a high news flow in the course of the year. This has already started on a positive note.
The results of surface channel sampling at the Pilar gold-silver project were recently released. All eight sampled locations returned anomalously high gold and silver values. CEO Brodie Sutherland commented, "The results from the channel sampling at Pilar are extremely encouraging, exceeding our expectations and demonstrating the potential for consistent, high-grade gold and silver values from bulk sampling. As we prepare for the first bulk sample at Pilar, we are confident that we will get significant grades on the intercepts of mineralization already exposed, not only on our defined Main Zone but also along the 4-T trend."
The stock has not reacted, trading at CAD 0.44, just above its 52-week low. For context, the stock was trading at CAD 1.57 in June 2021. The market capitalization is currently only around CAD 17 million.
American Lithium: When will the uranium IPO come?
American Lithium has shown around the turn of the year that explorer shares can more than double within a few months. At the beginning of December 2022, the share was quoted at EUR 1.44. Two months later, it was EUR 3.30. After a stronger correction set in last week and the share slipped to around EUR 2.50, it is now regaining its footing.
The reason for the decline of practically all lithium shares was the announcement by CATL to guarantee customers significant price discounts if they ordered 80% of their battery needs from the Chinese. This raises fears that the world's largest battery producer is starting a price war. Specifically, CATL would guarantee automakers a lithium carbonate price equivalent to a maximum of about EUR 27,000 per ton for the next three years. That would be about half the current price and thus cause downward pressure on lithium shares.
But at least at American Lithium, investors seem to be focused on operational development again. Details about the planned IPO of the uranium subsidiary with a project in Peru are eagerly awaited. The value of the Macusani project is not fully reflected in the Company's value. The IPO should change this. In addition, American Lithium could use cash inflows to bring its lithium projects into production. As a pure-play lithium explorer, American Lithium should also become more attractive for acquisition. That is because more and more automakers are securing lithium deposits. Most recently, General Motors took a stake in Lithium Americas, paying around USD 650 million for 25%.
BYD: Encouraging sales figures for February
BYD already has its own battery production and is currently expanding it massively. Yesterday, the share was one of the day's winners, with a price increase of over 5%. As a result, the three-week downward trend was exited. The share was initially under pressure due to price discounts from competitor Tesla. Recently, there were also reports of price reductions by BYD itself. But then yesterday, economic data in China provided a liberating blow. The Purchasing Managers' Index for February rose to 52.6, the highest value in years and a significant increase from 50.1 in January. It gives hope that the Chinese auto market will cool down less this year than experts have been expecting.
BYD also reported encouraging sales figures for February, with 193,655 vehicles sold last month. That is about 28% more than in January and 119% more than in February 2022. Among passenger cars, sales of pure electric vehicles were 90,639 units, up 110% from the same month last year and 27% from January. Plug-in hybrid vehicles sold are 101,025 units. This was about 128% more than in February 2022 and 28% more than in January.
High newsflow is expected in 2023 for all three stocks discussed. For BYD, the focus is on European expansion and, of course, home market performance. American Lithium has already run well. Consolidation in the short term can only be ended by really strong news around the uranium IPO or an acquisition. Tocvan Ventures is anything but highly valued. If the upcoming drill results continue to be positive, a revaluation can only be a matter of time.
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