Caution advised with Nordex and Plug Power! Momentum stock Globex Mining continues to rise!

Globex Mining: Stock with momentum on the way to an all-time high

Last year, we repeatedly pointed out the promising stock of Globex Mining. In the meantime, it has picked up and gained around 50% in value since September. At a price of CAD 1.34, it is approaching the all-time high of CAD 1.64. It seems to be only a matter of time before new records are reached, as the mining incubator is a clear winner in the Trump presidency. On the one hand, the gold price is rising due to the uncertainty surrounding the planned measures, and Globex owns numerous gold projects. On the other hand, Trump is likely to intensify foreign policy tensions – particularly with China – and thus play into the hands of raw material deposits in Western countries.

With over 250 projects, the mining incubator offers broad diversification in the commodities universe. In addition, the Canadians outsource the costs and risks of exploration by making the projects available to other companies. In return, Globex receives cash, stock options, and future royalty payments. About half of the projects are in the field of precious metals such as gold, silver, platinum or palladium. However, the Company is also active in rare earths, lithium and hydrogen. Due to the large number of projects, there is also a regular news flow.

Most recently, for example, there was positive news from the Bell Mountain gold project in the US state of Nevada. After a convincing preliminary economic assessment, the explorer Lincoln Gold Mining has decided to push ahead with the completion of the mine. Once the financing is complete, the heap leaching operation should be able to begin within 10 months. With a gold price exceeding USD 1,200, Globex receives royalty payments of 3%.

There is also positive news from the lithium sector. Globex partner Brunswick Exploration has reported further positive results from the 12,000-metre drilling program at the Mirage property in Quebec, Canada. The drilling continued to intersect broad and well-mineralized sections in their extensions and at depth. Globex benefits from the project with a 3% royalty.

Nordex: Headwind from the US

While the Globex share benefits from Donald Trump, the momentum at Nordex is over for now. Challenging times lie ahead for the wind energy sector in the important US market under the new administration. In particular, approval procedures for onshore turbines, essential for Nordex, are to be made much more difficult. Trump himself has even mentioned that no more turbines will be built in the US. It remains to be seen what the new requirements will look like in detail. What is clear is that it will become more difficult for Nordex in the US. Last year, the German company had seen a massive increase in incoming orders there.

In addition, the Nordex share was weighed down yesterday by bad news from industry heavyweight Orsted. The Norwegian company announced that it had to make write-downs of around EUR 1.6 billion in the fourth quarter. The reasons continue to lie in the US business. There, in addition to rising interest rates, the Company is also struggling with delays and higher costs at an offshore wind power project. In addition, the seabed leased for an offshore wind power project had to be revalued. It was known that Orsted was having problems in the US, but the market was surprised by the amount of the write-downs. As a result, the stock lost more than 10% yesterday.

Plug Power: A parting gift worth billions

Plug Power will also likely face a more challenging time in the critical US market under the Trump administration. This is because the hydrogen specialist is highly loss-making and relies on government funding. Therefore, the Biden administration's parting gift is all the more important. As Plug Power announced, the long-awaited loan guarantee of USD 1.66 billion has been bagged. In recent weeks, there had been speculation that the funding would be cancelled if the funds did not flow before the change of government. The consequence was said to be insolvency. This horror scenario has been averted for the time being.

Plug CEO Andy Marsh comments: "Entering into this loan guarantee with the Department of Energy represents a significant step in the expansion of our domestic manufacturing and hydrogen production capabilities, which will create many high-quality jobs in the United States. We believe that the hydrogen economy is not only reducing carbon emissions and increasing the resilience of the US energy grid but is also closely aligned with national security interests and ensures that the US is at the forefront of energy technology development and deployment on a global scale."

The loan guarantee will help finance the construction of up to six projects to produce and liquefy carbon-free or low-carbon hydrogen on a large scale in the United States. The first project will be a green hydrogen plant in Texas. The green hydrogen plant, powered by an adjacent wind farm, will utilize Plug's electrolysers, liquefaction, and storage systems.

Plug Power emphasized in its statement regarding the funding that the hydrogen economy strengthens America's energy independence and secures the US's leadership in clean energy innovation. Whether the Trump administration can be persuaded of this remains to be seen. In the initial hours, however, the focus seems solely on promoting oil and gas.

Globex Mining should continue to gain momentum. The environment for commodities and gold, in particular, should remain positive. Investors can benefit from this with the Globex share in a risk-diversified manner. By contrast, the new US administration is creating a lot of headwind for Nordex and Plug Power. This market is very important for both of them.