November 16th, 2021 | 12:56 CET
Climate conference ends: Nel, Plug Power and Defense Metals continue with momentum
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Defense Metals: One of North America's most significant rare earth deposits?
An indirect beneficiary of electromobility is Defense Metals. The Canadian Company owns proven rare earths on its 17 sq km Wicheeda Rare Earth Project - and diamonds as well. Rare earths are present in almost all new technologies such as smartphones and electric cars. Demand is correspondingly high. In addition, nearly all mining areas are located in China. Therefore, the strategic interest in deposits outside China is exceptionally high.
The 2021 drilling program in Wicheeda to expand resources was completed a few days ago. 29 holes with a total length of 5,349m were drilled. The goal is to expand the deposit and upgrade the existing resource into the proven and indicated resource categories. Previously, Wicheeda was known to have Indicated Mineral Resources of 4.89 million tonnes at an average grade of 3.02% LREO (Light Rare Earth Elements) and Probable Mineral Resources of 12.1 million tonnes at an average grade of 2.90% LREO. Defense Metals CEO Craig Taylor stated, "We are very pleased with the completion of our 2021 drilling campaign, and expect to expand and upgrade in category the current mineral resource at the Wicheeda SEM deposit. We believe that the 2021 drill results, when released, will ensure that the SEM Wicheeda deposit will be one of the most significant rare earth deposits in North America." Results from the completed drilling are expected to be released during the first quarter of 2022. Defense Metals' shares gained slightly to EUR 0.20 following the completion of the drilling program. If the results are convincing, significantly higher share prices are likely. In February of this year, the share was already at EUR 0.47.
Nel: Hydrogen shares with momentum again
In recent weeks, hydrogen shares have picked up momentum again. The Nel share has gained a good 50% in value in just one month. The basis for the good mood is a positive news flow in the sector. The latest example: the German states of Bremen, Lower Saxony, Mecklenburg-Western Pomerania, Hamburg and Schleswig-Holstein are intensifying their cooperation on hydrogen. "We are determined to consistently push ahead with the strategy and the associated transformation process to revolutionize our economy and industry, realize the energy turnaround and write northern Germany's success story as a leading hydrogen region," said Hamburg's Senator for Economic Affairs, Michael Westhagemann. Above all, "green" hydrogen is to play an essential role in the climate-friendly transformation of the economy. However, this hydrogen from renewable energies is still expensive. But Nel shows how it can be done. At its plant in Heroya, Norway, with a capacity of up to 2 GW, Nel wants to use economies of scale to produce hydrogen at less than USD 1.50 per KG. According to Nel, this would make hydrogen competitive with fossil fuels.
Plug Power raises forecast for 2022 and 2023
Another highflyer in the hydrogen sector at the moment is Plug Power. The Company is a developer of hydrogen fuel cell systems and related plug-and-play solutions. Since the beginning of October, the stock has climbed from EUR 21 to EUR 38. At the same time, the latest quarterly figures were manageable. Although sales increased by 34%, analysts' expectations were not met due to the sharp rise in the cost of natural gas. However, the outlook for the next two years was raised. Sales are expected to increase to between USD 900 million and USD 925 million in the coming year. And on the stock exchange, as is well known, it is the future that counts. In addition, the share looks attractive from a chart perspective. If it manages to jump above EUR 40, the way up is clear for the time being.
As expected, nothing concrete came out of the climate summit. But the shares from the renewable energy sector continue to accelerate. Investor favorites such as Nel and Plug Power are again in high demand. If the completed drilling at Defense Metals is as successful as management expects, the stock will be revalued.
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