11. January 2021 | 10:08 CET
Geely, Desert Gold, Li Auto - Incredible development!
The trend towards electromobility and away from combustion engines is developing more and more rapidly. Almost all the electric car manufacturers across the board increased their sales figures by 100% in 2020. With new models and better battery technologies, the old automobile world's replacement is being strongly forced. The big technology groups are now getting into the lucrative electromobility business. In cooperation with Hyundai, Apple is probably making a start and others will follow, giving the industry another considerable push.
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ISIN: CA25039N4084 , KYG3777B1032 , US50202M1027
"[...] Both the geology and the infrastructure around the project make for a very attractive cost structure. We expect to be able to produce at 50% of the current gold price. [...]" Bill Guy, Chairman, Theta Gold Mines Limited
Big tech strikes
On Friday, the South Korean carmaker Hyundai announced that talks with Apple about a cooperation are still at an early stage. Yesterday afternoon, however, the Reuters news agency reported more details of the planned deal. A cooperation agreement for the construction of fully autonomous electric cars is to be signed this spring. In 2024, the launch of the Apple series and the hunt for Tesla should begin. However, Apple is getting competition from the tech industry.
The leading search engine Company Baidu is already one step ahead here. After we reported that Baidu was looking for a suitable vehicle manufacturer a few weeks ago, the decision seems to have been made, favoring Geely. According to the report, the new joint venture also wants to produce fully autonomous electric vehicles. The majority of the new car Company is to be owned by Baidu, while the models' production is to take place in converted Geely workshops. The Internet giant will supply the software for this.
The straggler grows and grows
The electric car manufacturer Li Auto is currently growing much faster than its Chinese competitor BYD. In December, Li Auto delivered 6,126 units of the model Li One, an increase of 31.9% on the previous month. This increase makes the model the best-selling electric SUV in China. In the fourth quarter of 2020, sales totaled 14,464 units, up 67% from the previous quarter's 8,660 units. Full-year 2020 deliveries were thus 32,624 electric cars.
Analysts were extremely optimistic about the Li share. In addition to Merrill Lynch and Credit Suisse, the Chinese also received buy recommendations from Bank of America. In the initial assessment, the Bank of America analyst sees the price target at USD 42.00. The analyst forecasts an annual sales growth of 48% through 2025, supported by growing electric vehicle penetration and strong demand in the premium segment. Credit Suisse sees Li Auto's share price rising to USD 40.00. Currently, the stock is trading at USD 34.00.
Gold remains bullish
High fluctuations are seen at the moment in the gold market. After the precious metal had stalked back to its resistance at USD 1,945, Friday saw a sharp drop back to USD 1,838.28. Thus, the first attempt to reach the all-time high has been stopped for now. Instead, a relapse into the 1,700 range is possible from a chart perspective. In the long term, however, it should go up with the precious yellow metal. Shares in the gold explorers and producers were also vigorously shaken on Friday. Desert Gold Ventures lost over 8% dropping to CAD 0.17 in Friday trading.
In the weeks before, the value rose from CAD 0.13 to CAD 0.23. Fundamentally, things are going like clockwork for the Canadians. Desert Gold has put the focus on gold mining in Mali. Mali is rich in mineral resources and the third-largest gold producer in Africa. Thus, the young Canadian Company follows the industry leaders Iamgold, AngloGold Ashanti or Barrick Gold, which also mine in West Africa.
At the core of the portfolio are two gold exploration permits with large land areas for the SMSZ project, one of the largest gold exploration projects in West Africa and Djimbala. In early December, the most extensive exploration program in history was launched at the Senegal Mali Shear Zone reference project. The fully-funded program provides for the drilling of 20,000 meters with additional demand drilling of another 20,000 meters. For Desert Gold Ventures CEO Jared Scharf, the primary focus for 2021 is the SMSZ project as it offers a variety of promising advanced stage targets in the right regional setting. As a result, the Company's leader expects a steady stream of news to release the full-year results while advancing new and existing targets.
Volatility on the rise
Successes were also reported at the second Djimbala project. In mid-December, Desert Gold Ventures announced that its joint venture partner, Indigo Exploration, had commenced exploration work at the Djimbala Gold Project. After preliminary work, drill targets were defined within the two zones Djilefing and Forela. These zones have shown high gold grades in assays. Due to the volatile gold price, mining stocks are also likely to trade with more substantial fluctuations in the coming weeks. However, Desert Gold's developments are incredibly positive. With successful drill results, the August high at CAD 0.35 may well come within reach again.