January 19th, 2022 | 14:13 CET
Gold rush in the lithium market: BMW, Yorkton Ventures, Rock Tech Lithium
Table of contents:
"[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
BMW: Recognizing the signs of the times
BMW cars have always stood for driving pleasure. While many people still associate driving pleasure with a bubbling exhaust, when in doubt, acceleration beats both sound and the smell of gasoline and rubber. Electric motors are also suitable for sporty drivers. E-car pioneer Tesla has always successfully played the two trump cards "innovation" and "sportiness." Why shouldn't BMW be able to do the same?
Sales figures also show that BMW is on the right track. Sales of electric vehicles doubled in the first nine months of the fiscal year compared to the previous year. After all, the Munich-based company sold 231,000 e-cars to environmentally conscious drivers. Things have been going particularly well recently in the USA and Asia. The latter market is crucial for all carmakers, as growth can still be expected here.
Since BMW is aiming for 50% growth in electric cars from 2025, there is no doubt that the Company has recognized the signs of the times. On top of that, there is a dividend yield of a whopping 4.9%. The share is also in a better chart position than its competitors, but the value should remain above the EUR 95 mark.
Yorkton Ventures buys two lithium projects - and now?
While BMW is a world-class company known and appreciated in Asia, the situation is quite different for Yorkton Ventures. But Yorkton is in the right place at the right time. The Company purchased the Cyr-Kapiwak lithium project in the Canadian district of Quebec in December. The project consists of three properties and covers an area of 22.2 sq km. The Company considers the property highly prospective and emphasizes that rock samples have revealed relevant lithium grades. The purchase of the project was also made on highly favorable terms: In addition to a cash payment of only CAD 25,000, shares of Yorkton Ventures changed hands. A net smelting premium of 2% in the event of success was also agreed, which Yorkton can halve in return for a payment of CAD 1 million. Then, a few days ago, the second coup of the enterprising management: In the same region, Yorkton bought another project, Sirmac East, on identical terms.
On the stock exchange, the share of the young company is currently hovering around EUR 0.35 in German trading and is proving extremely volatile. Although the market capitalization of less than EUR 8 million is a warning signal for conservative investors, speculatively oriented market participants are likely to see opportunities in it - where else is there the opportunity to participate in the beginning of a lithium story? Despite the current gold rush around lithium, investors should by no means act hastily and should implement possible investments moderately within the framework of a balanced investment strategy. However, if you have capital on the high side and patience, you can take a closer look at this early opportunity.
Rock Tech Lithium: Many investors are watching here
Rock Tech Lithium shares have shown in the past 13 months what can happen to lithium shares when the equity story reaches the masses of investors. The value jumped from EUR 0.70 to a peak of EUR 6. Rock Tech Lithium plans to mine lithium in Canada and process it in Germany. From 2030, even recycling is envisaged - mining would then lose importance.
Today, environmentally friendly processes already play a major role for Rock Tech Lithium. When the Company announced in the fall that it wanted to build a factory in Brandenburg near Tesla, there was no stopping the share price. In the meantime, some calm has returned. The share is likely to be on the agenda of many investors. Opportunities are still there, but the share is no longer an insider tip.
Investors can take different paths to profit from the electric revolution depending on their risk appetite. BMW is well-positioned with its strong brand and progress in the field of e-mobility but is unlikely to make any more big leaps. On the other hand, Rock Tech Lithium is somewhat more promising - its equity story is good. Yorkton Ventures is just starting, and with a single-digit market capitalization, the lithium company is a hot potato in a profitable market.
Conflict of interest
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