Close menu




September 17th, 2021 | 11:59 CEST

First Majestic Silver, Silver Viper, Millennial Lithium - Rally Ahead?

  • Silver
Photo credits: pixabay.com

A rally in silver was already predicted at the end of last year. The reason was the corona-related 5.9% drop in production. It is the most significant decline in over 10 years, and thus there was a shortfall in supply. In addition, there is strong physical demand, which you can see well on Reddit if you search for "Silverbugs". There, people proudly present their hoarded silver stocks. Since the panic selling at the beginning of August, the price has already risen by 11%. High inflation could give the silver price a further boost. For lithium, on the other hand, the rally is already in full swing. The lithium carbonate price has more than doubled since the beginning of the year. We analyze three companies from these sectors today.

time to read: 4 minutes | Author: Armin Schulz
ISIN: FIRST MAJESTIC SILVER | CA32076V1031 , SILVER VIPER MINER. CORP. | CA8283341029 , MILLENN.LITHIUM CORP. | CA60040W1059

Table of contents:


    First Majestic Silver - Record earnings

    When silver reached a new multi-year high on February 1, First Majestic Silver could also mark a new high for the year. As we know today, it was a false breakout and the silver price consolidated for the time being. The Company's share price also took a hit. The commodity producer broke new ground by taking over the Jerritt Canyon Gold Mine in Nevada. The reason given by the CEO was that they had not found a suitable silver mine to take over. To put it positively, one could say that the Company has broadened its base.

    On August 16, the quarterly figures were presented publicly, and the analysts' expectations regarding the earnings per share could not be reached. On the other hand, production rates increased by 14%, even if the new gold mine is excluded. Of particular note is the average sales price of CAD 27.32, which was higher than the average silver price. As a result, a record revenue result was reported. One problem is the increased costs in production, and it does not look like it will improve quickly as management has forecast high costs due to improvement work at the Jerritt Canyon project.

    Shareholders can look forward to a higher quarterly dividend, which has been increased by 33%. The increased Jerritt Canyon project improvement costs are temporary. The share is currently at CAD 16.18 and has again bounced off the important resistance at CAD 15.05. The downward trend line has been broken. If the share now reaches a closing price above CAD 17.09, the trend reversal has succeeded. Below CAD 14.84, the chart picture would cloud significantly.

    Silver Viper - Gold and silver deposits exceed market value

    Silver Viper is a Canadian silver and gold explorer, pointing to existing silver and gold resources. On June 15, a NI 43-101 report was filed as evidence of 154,300 ounces of gold and just over 6.9 million ounces of silver at the La Virginia project. Management anticipates an additional 246,300 ounces of gold and approximately 12.5 million ounces of silver. The report is based on 288 drill holes, with the Company drilling 100 holes totaling 27,021m last year alone.

    Since the report, things have been quiet for the Company, which raised just over CAD 6 million following its private placement in early June. Unlike many other miners that release news as soon as a drill program starts, Silver Viper does not report until there are already results from the drill program. However, there has not been such a long pause in announcements in a long time, so it is safe to assume that news will be coming in here in the foreseeable future. The area is 6,880 hectares and offers so much exploration potential.

    The stock returned once again from CAD 0.80 in early July to CAD 0.45. The pressure came from the new shares in the private placement. The investors just wanted to get the warrant and their stake back out with the sale of the shares. The share should not fall any lower since the management holds 23% and institutional investors, including Mr. Sprott, hold 60% of the Company. If one converts the existing gold and silver reserves, the fair value is about CAD 83 million. Currently, the Company is only valued at around CAD 51 million on the stock exchange.

    Millennial Lithium - A bidding war

    Events are coming to a head at Millennial Lithium. The Company, which produces lithium with a purity of 99.96% in a pilot plant in Argentina, is to be taken over directly by two candidates. On July 16, a bid of CAD 353 million was received from Ganfeng Lithium, the equivalent of CAD 3.60 per share. At the time, this was a good 20% above the current market price of the share. Management and strategic investors were in favor of accepting the offer, and On August 27, the court gave the green light for the takeover.

    On September 8, the share was again suspended from trading. Management subsequently announced that it had received a higher offer of CAD 3.85 per share. Behind the offer appears to be Contemporary Amperex Technology Co. Ltd, itself one of the largest manufacturers of electric vehicle batteries. Management has given Ganfeng until September 27 to respond to the new offer. So the bidding war for the 4.12 million tons of lithium carbonate indicated by Millennial Lithium is on.

    The share is currently quoted at CAD 4.01. Investors, therefore, assume that the two bidders will fight a battle. At this point, one should no longer invest here. The risk-reward ratio is no longer good enough, as fundamental data no longer play a role, and it is entirely unclear whether Ganfeng will increase its offer again.


    While the rally in lithium is already in full swing, as seen in Millennial Lithium, silver is still lagging. Silver is becoming more and more important, especially in industrial processing, as the US, for example, wants to rely more on solar energy, and silver is built into solar panels. First Majestic Silver is an example of how it is no longer easy to find new silver mines. The life of the existing mines continues to decrease. Silver Viper, on the other hand, is at the beginning with its existing deposits. As an investor, one can buy gold and silver here at a significant discount to the current price.


    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 in the future hold shares or other financial instruments of the mentioned companies or will bet on rising or falling on rising or falling prices and therefore a conflict of interest may arise in the future. conflict of interest may arise in the future. The Relevant Persons reserve the shares or other financial instruments of the company at any time (hereinafter referred to as the company at any time (hereinafter referred to as a "Transaction"). "Transaction"). Transactions may under certain circumstances influence the respective price of the shares or other financial instruments of the of the Company.

    Furthermore, Apaton Finance GmbH reserves the right to enter into future relationships with the company or with third parties in relation to reports on the company. with regard to reports on the company, which are published within the scope of the Apaton Finance GmbH as well as in the social media, on partner sites or in e-mails, on partner sites or in e-mails. The above references to existing conflicts of interest apply apply to all types and forms of publication used by Apaton Finance GmbH uses for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and etc. on news.financial. These contents serve information for readers and does not constitute a call to action or recommendations, neither explicitly nor implicitly. implicitly, they are to be understood as an assurance of possible price be understood. The contents do not replace individual professional investment advice and do not constitute an offer to sell the share(s) offer to sell the share(s) or other financial instrument(s) in question, nor is it an nor an invitation to buy or sell such.

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

    The acquisition of financial instruments entails high risks that can lead to the total loss of the capital invested. The information published by Apaton Finance GmbH and its authors are based on careful research on careful research, nevertheless no liability for financial losses financial losses or a content guarantee for topicality, correctness, adequacy and completeness of the contents offered here. contents offered here. Please also note our Terms of use.


    Der Autor

    Armin Schulz

    Born in Mönchengladbach, he studied business administration in the Netherlands. In the course of his studies he came into contact with the stock exchange for the first time. He has more than 25 years of experience in stock market business.

    About the author



    Related comments:

    Commented by Armin Schulz on June 7th, 2023 | 09:15 CEST

    Barrick Gold, Defiance Silver, and First Majestic Silver - Precious metals in focus after the fall of the debt ceiling

    • Mining
    • Silver
    • Gold
    • PreciousMetals

    The US has decided to suspend its debt ceiling until 2025. The markets reacted happily to this news and marked new highs for the year. But is this decision really a good thing? It took the US over 200 years to reach USD 2 trillion in debt. Now it will add 2 trillion every 18 months. With higher interest rates, refinancing this debt could lead to a financial crisis. Will fiat money still be worth much then? Chances are good that the price of gold and silver will be driven up further in this way. We, therefore, take a look at three gold and silver companies.

    Read

    Commented by Stefan Feulner on June 2nd, 2023 | 08:00 CEST

    ThyssenKrupp, Orestone Mining, Nevada Copper - Optimistic about the future

    • Mining
    • Copper
    • Gold
    • Silver

    Overall, copper is an indispensable part of the green transformation due to its excellent electrical conductivity, corrosion resistance and reliability. It enables the efficient use of renewable energies, promotes electromobility and supports sustainable infrastructure development. Due to recession fears, the base price corrected strongly in recent months. In the long term, copper should make a renewed attempt to reach new highs due to high demand and too little supply.

    Read

    Commented by Nico Popp on May 31st, 2023 | 09:00 CEST

    Electrification wave! How investors can benefit: Siemens Energy, Vonovia, Defiance Silver

    • Mining
    • Silver
    • Energy
    • renewableenergies
    • RealEstate

    The electricity supply in Germany is a hot topic. Now even the German Trade Union Federation is calling for a guaranteed maximum price for industrial electricity. Critics fear that this would provide too little incentive for industrial companies to adapt to the new conditions - if electricity is cheap, there is no need to save, so the argument goes. We present three stocks related to the energy transition and shed light on their medium-term prospects.

    Read