Close menu

January 31st, 2023 | 14:48 CET

Energy transition price rockets: American Lithium, Plug Power, Auxico Resources

  • Mining
  • RareEarths
  • Lithium
  • hightech
Photo credits: BYD Limited Company

Are shares related to electromobility among the price rockets of 2023? In any case, the start of the year was promising. After a partially disastrous second half of 2022, many stocks are showing strength in the new year. Lithium shares, in particular, are in demand again. Among the high flyers of recent months is American Lithium. After the Nasdaq listing and the planned spin-off of the uranium division, investors are eagerly awaiting the feasibility study. Will the share price fireworks continue? Analysts also expect such fireworks at Auxico Resources. They believe that the share price of the trader of rare earths and critical raw materials could almost triple. Hydrogen pioneer Plug Power has also bounced back in the new year. But once again, the US company has disappointed operationally. How do investors react?

time to read: 4 minutes | Author: Fabian Lorenz

Table of contents:

    Auxico Resources in a highly attractive market: is a 300% price increase possible?

    The Auxico Resources share has yet to take off. Yet Hallgarten analysts see considerable upside potential in the current year. Their target price for the shares of the Canadian company is CAD 1.48. The share is currently quoted at CAD 0.43. As a result, the price potential is almost 300%. Where does the optimism of the analysts come from?

    First, Auxico Resources is active in a highly attractive market: trading in rare earths and critical raw materials. Both groups of metals are found in almost all high-tech products of our time and are essential for the energy and mobility transition, among other things. The problem: China is the leading supplier of these raw materials. Against the background of tensions between Western countries and the Middle Kingdom, alternatives are desperately sought. Auxico Resources has been searching for these alternatives for almost ten years. The Company is now the exclusive agent for rare earth concentrates from the Democratic Republic of Congo and has direct or joint venture mineral rights in Colombia, Bolivia and Brazil.

    Business is already underway in Congo. The short-term goal is to export 500 to 1,000t per month, equating to cash flow between CAD 500,000 and CAD 1 million. In Brazil, a resource estimate is expected to begin in the first quarter. In the meantime, cash flow can be generated from the modern processing of historic tin tailings. In Colombia, a resource estimate is expected at the end of the second quarter. Here, larger quantities of rare earths and critical minerals such as tantalum, niobium and tin are expected.

    In the current year, Auxico expects a commission income of CAD 10 to 18 million. Since trading costs are manageable, a high margin should be realistic. The Company is currently valued at CAD 31 million. This underpins the analysts' price target.

    American Lithium: Week of truth?

    The shares of American Lithium have more than doubled within two months to around CAD 4.70, making the Canadians one of the high flyers of recent months. The reasons: First, the plans for the IPO of the uranium subsidiary were published. The value of the Macusani project is not fully reflected in the Company's value, and the IPO is intended to change this. The second price driver was the listing of the share on the NASDAQ stock exchange. But that is not all. American Lithium has a project in the US state of Nevada (TLC) and Peru (Falchani). The TLC project is said to be one of the largest in the world, with a deposit of 8.8 million tons of lithium carbonate. Investors are expecting the release of the preliminary feasibility study (PEA) any day now. The value is speculated to exceed the Company's current market capitalization. The Company may then become a takeover target. After all, the TLC project is not far from the Tesla factory in Texas. Tesla CEO Elon Musk already highlighted the high lithium production margins last year. Therefore, extending value creation would make perfect sense.

    Is American Lithium making itself pretty for a buyer? The buyback of a 1% royalty from Nevada Alaska Mining Co. Inc. is seen as such.

    Simon Clarke, CEO of American Lithium, stated, "We are very pleased to have reached an agreement with the royalty holder to buy back this valuable royalty, which also ensures that the Company will control 100% of all of TLC's concessions. As TLC is developed and production commences, this transaction should prove to be highly accretive and maximize the value of the project. The elimination of this remaining royalty also allows us to present TLC as fully unencumbered in our first PEA, which is expected to be released in the next few days."

    Plug Power: How are investors reacting to renewed guidance adjustment?

    Plug Power struggled with supply chain issues in 2022. Source: Plug Power Inc.

    Plug Power was arguably one of the disappointments of the past year. Especially in the third quarter, the stock went down sharply. Whether the share will perform better in 2023 will depend heavily on its operating performance. It is undisputed that the potential for hydrogen in the future energy mix is huge. But the operational development of companies like Nel, Plug Power or even ITM Power leaves much to be desired. Valuations often run far ahead of the actual development of sales and earnings. Most recently, Plug Power again lowered its outlook for 2022. According to this, revenue growth will be between 45% and 50%. Previously, more than 80% had been forecast. For example, major projects would have been delayed from 2022 to 2023 due to customer timing and general supply chain issues. Also, the launch of new products was delayed in the fourth quarter, according to the Company. For fiscal 2023, Plug Power forecasts sales of USD 1.4 billion. That figure is expected to reach USD 5 billion by 2026 and as much as USD 20 billion by 2026.

    Plug shares reacted negatively to the renewed disappointment only briefly. In the current year, the security has gained over 20%. Investors seem to be ticking off 2022 and hoping things will improve in 2023. Whether this will be the case remains to be seen.

    The start to the new year was encouraging for many shares. If the analysts at Hallgarten have their way, the Auxico share still has much potential. Operationally, the Company is already generating cash flows, and the current resource estimates hold additional potential. Things will remain exciting at American Lithium. However, high expectations also harbor the potential for setbacks. Plug Power must finally convince operationally.

    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.

    The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.

    Der Autor

    Fabian Lorenz

    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.

    About the author

    Related comments:

    Commented by Armin Schulz on September 27th, 2023 | 09:05 CEST

    Nikola, Saturn Oil + Gas, BASF - A Buy in difficult times?

    • Mining
    • Oil
    • Batteries
    • renewableenergies
    • chemicals

    These are challenging times on the stock market. Central banks have not announced the end of interest rate hikes, which is poison for growth companies. In addition, extreme weather conditions are affecting the production of some companies, and there are geopolitical tensions to consider, including the ongoing Ukraine conflict and the simmering dispute between the US and China. Recently, there have also been tensions between China and Germany. Following critical statements by Foreign Minister Baerbock to China's Xi Jinping, the German ambassador was summoned. Energy shortages are becoming increasingly significant for many companies in Germany. Today, we look at three companies suffering from the problems described.


    Commented by André Will-Laudien on September 27th, 2023 | 08:05 CEST

    The high-tech gold rush on the Nasdaq is waning: BYD, Manuka Resources, and Infineon remain on the buy list

    • Mining
    • Vanadium
    • Electromobility
    • Technology
    • GreenTech

    For those investing in green or high-tech sectors, keeping an eye on the supply chains of raw materials is crucial. After all, in times of geopolitical upheaval, nothing seems more important to the industry than securing its foreign sources of critical resources. The EU and the US have already responded by adding several metals to the list of strategic elements. For the capital markets, too, the fight against global warming has become an issue that cannot be ignored. We focus on successful protagonists that can enhance any portfolio.


    Commented by André Will-Laudien on September 26th, 2023 | 07:45 CEST

    Artificial Intelligence in Sellout! Nvidia, Defense Metals, ARM Holdings - Nothing works without rare earths!

    • Mining
    • RareEarths
    • AI
    • chips
    • Investments

    After long bull market movements, the stock market usually tends to rotate sectors, or the market enters a general consolidation. In the former case, investors can profit by reallocating their assets while exploring new investment opportunities. In the latter case, all stocks come down, and the capital market generally suffers from a change in sentiment and corrects recently exaggerated valuations. In the case of the new megatrend of Artificial Intelligence (AI), the stock market seems to sense a great need for correction. As if by magic, the blockbuster stock Nvidia rose by 250% in just 9 months. However, it has already retraced nearly 20% from its peak. Where do the opportunities lie for investors?