September 12th, 2022 | 14:46 CEST
Forget lithium! Now comes vanadium! Nordex, Manuka Resources, ThyssenKrupp
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"[...] In our experience, the local communities are supportive and friendly. [...]" Steve Cope, President, CEO and Director, Silver Viper
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.
Nordex: More headwind than tailwind
Energy turnaround? Nordex! The connection between the current situation and potential investment opportunities could be as simple as that. But the world is not that simple, nor does the stock market work that simply. As a supplier of wind turbines, Nordex is enjoying a boom these days. Renewable energy is more profitable today than ever before. In addition, climate change is increasingly showing us how important it is to take action, even on our own doorstep. But in Germany, there is sometimes a lot of bureaucracy standing between targets and their achievement. While LNG terminals in the north have been pushed through at lightning speed and should soon be available, it still takes a long time for wind power projects to be approved. Although a group of scientists showed months ago that the rapid construction of projects that have already been approved in Germany would be a great success with a noticeable effect, things do not always move so quickly in this country. There are specifications for tenders to be met, and even when everything seems to be going smoothly, there is a hitch due to the vacation of the person in charge or a long-planned training course.
But enough polemics. Fortunately, Nordex does a large part of its business abroad. In South America, projects often reach the home straight more quickly. However, the various pillars are not really helping the wind turbine manufacturer either. For the quarter ending in June, Nordex's sales fell by 17.4% to just EUR 1.19 billion for the year. The Company also posted a small three-digit loss. Although the figures were in line with guidance and did not come as a negative surprise to analysts, the figures represent anything but hope. A company that does not earn money even with many orders has structural problems. The share has lost significantly in recent months - investors currently have better alternatives.
Manuka Resources: Precious metal cash flows and a potential GreenTech gamechanger
One of these alternatives could be Manuka Resources. The Company differs from Nordex in that it is located much earlier in the value chain and has a much lower market capitalization. Manuka has previously operated one gold and one silver project in the Australian state of New South Wales. Both projects are capable of producing precious metals. What is unique about Manuka's situation is that while precious metal producers around the ring have, in some cases, already dug 1.5 km deep, Manuka is still close to the surface. In the case of the Wonowinta Silver project, the Company has only dug to a depth of 60 m. According to management, this opens up great potential for further exploration, which the production company is doing virtually on the side. Manuka also owns a processing plant that currently processes rock from the Wonowinta silver mine or the Mt Boppy gold project, depending on demand. Should the latter project live up to its potential, the decision to build another processing plant at Mt Boppy could be made from mid-2023 - the necessary permits have already been obtained.
Anyone who believes that Manuka Resources is a pure precious metals company is mistaken. The management team behind Manuka has many years of experience in financing and business development in the mining sector. More than ten years ago, the STB project in New Zealand caught the eye of the protagonists. It stands for iron sand, vanadium and titanium and offers a resource of around 3.8 billion tons of the three elements. In terms of both cost structure and environmental footprint, the project is said by management to have the potential for the best quartile globally. For the global supply of vanadium, the majority of which today comes from China or Russia, a producing STB project could be a game-changer and, if it goes into production, could also make it into the list of the world's top mines right off the bat. Manuka completed the transaction in August and is currently working to successfully close the deal. Manuka Resources has a good network of financiers and a high equity ratio on the part of the management of about 40%. As vanadium, in particular, is considered an essential metal for the steel industry and for renewable energy and its storage, the share could develop fantasy. The story is worth a more detailed analysis - growth and a profitable business model come together here. Self-deciders should make a note of September 27. Dennis Karp from Manuka will present at the 4th International Investment Forum (IIF) on this day.
ThyssenKrupp: Where there is shadow, there is also light
From 2026, the vanadium from the STB project could be used to make steel corrosion-resistant. Companies like ThyssenKrupp are likely to have an interest in sourcing this important raw material from secure jurisdictions. ThyssenKrupp is greener than many observers think: The Company is pushing ahead with its electrolysis business and could even float it separately on the stock market. Electrolysis is the process used to produce hydrogen. Hydrogen could be crucial for energy-intensive sectors such as the steel industry and drive their green transformation. While the share is currently suffering from the "gas scare" and general market conditions, investors should not forget that comeback potential may also emerge in the event of a positive development around the energy crisis.
While there is sand in the gears at Nordex, and the Company is not getting its horsepower on the road despite a special boom, the overall picture at ThyssenKrupp is more complex. While a gas shortage this winter would be a disaster, the Company already has solutions up its sleeve in terms of perspective. What hydrogen is for ThyssenKrupp, the vanadium redox battery could be for other industries, versions of which are already available worldwide with capacities of up to 111 MW. Manuka Resources, a successful gold and silver company, has been operating in this exciting market since August. The share does not yet reflect this perspective. The stock is therefore considered an insider tip for experienced investors.
Conflict of interest
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