February 21st, 2022 | 15:50 CET
Daimler, Yorkton Ventures, Volkswagen: Is the lithium takeover merry-go-round about to start?
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"[...] In 2020, the die is finally cast in the automotive industry towards electromobility. [...]" Dirk Harbecke, Executive Chairman, Rock Tech Lithium Inc.
At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.
Daimler: That looks good
The Swabian automaker Daimler has already largely electrified itself. While it still has internal combustion engines, the goal is to phase them out. Daimler is therefore dependent on innovative battery technology and the associated basic materials. But the whole thing is to be done sustainably. Daimler insists on indirectly using raw materials certified under the Initiative for Responsible Mining Assurance (IRMA). Daimler has also looked at where the lithium it has used so far comes from. Currently, some of it comes from Australia, the rest from Chile. However, the latter country of origin is also considered a "risk hotspot" for Daimler from an ESG perspective. Daimler is currently working to manage the negative consequences of lithium mining in Chile as best as possible and improve the local situation.
Such impact investing is essential to improve conditions. When major customers make claims and specify clear criteria, this improves the situation for the environment and local residents. But even in the short or medium term, one cannot rule out that Daimler will look for new partners or push for lithium from other regions of the world. Here, projects in the USA or Canada could come into question. Argentina, which neighbors Chile, is also considered up-and-coming. However, better ESG conditions are likely to prevail in North America. To be credible, Daimler will have to pay even more attention to supply chains and eliminate ESG risks in the future. However, the Company is already well on its way in this area. Most recently, the share reached a new three-year high.
Yorkton Resources: Lithium and Gold with blue sky potential
On the other hand, the relatively unknown lithium share Yorkton Ventures is trending sideways. The Company acquired several non-contiguous properties just last December, operating as the Cyr-Kapiwak project. Other more advanced lithium projects are in the immediate vicinity, such as Allkem's proposed James Bay mine and Medaro Mining's Cyr South property. Yorkton's projects are still in their infancy, but precisely because of this, they offer the prospect of great leverage. The Company is worth just over EUR 7 million.
In addition to the lithium projects, Yorkton Ventures has gold projects in its portfolio, one of which is based in Quebec and two others in Newfoundland. The Quebec project is called Bellechasse-Timmins, has a historical resource of 171,000 ounces of gold and scores an average grade of 1.83 g/t gold. It is being explored in partnership with GoldSpot Discoveries. Yorkton Ventures offers access to exciting gold and lithium projects and is suitable for speculative investors with a penchant for projects with blue sky potential.
Volkswagen: What follows good PR?
Volkswagen's stock is incomparably more conservative. The Company is considered a showcase e-car company in Germany. This image is partly due to the models and partly to good PR. CEO Herbert Diess ditched the tie early on and staged himself as the German Elon Musk - like a mix between engineer and innovator, so to speak. After the stock benefited strongly from the e-car fantasy a year ago, the value has since oscillated sideways with a downward trend. However, VW is still a master of PR - most recently, the Company made a name for itself with a planned low-cost e-car. The sound barrier for such a vehicle could be EUR 20,000.
The Volkswagen share hardly reacts to the good news around VW. That could be because the market has already priced in the fantasy. Daimler is a different story at the moment. Here, investors could be happy in the short term, although the share will tend to travel at a leisurely "cruising speed". On the other hand, Yorkton Resources has the potential to ignite the turbo. The catch: you never know when the market will hit the gas pedal. But if you can handle it, Yorkton is a promising stock with several irons in the fire.
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