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August 10th, 2023 | 08:55 CEST

Gold rush mood at Manuka Resources and Rock Tech Lithium, and Bayer writes billion-dollar losses

  • Mining
  • Gold
  • Commodities
  • Lithium
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Australian gold and silver explorer Manuka Resources has successfully shipped its third gold shipment to Australasia's leading independent precious metals assayer, ABC Refinery. Shares in Manuka Resources rose nearly 8% following the news. In addition, the Company now plans regular weekly shipments as it processes various stockpiles from its Mt Boppy gold project. Bayer AG is reporting losses of billions of dollars due to write-downs in its Monsanto agriculture division, again fueling breakup rumors. The group is struggling with significant declines in its glyphosate-based weedkiller business, which is weighing heavily on its finances. A promising newcomer on the commodities horizon is emerging right in Germany's Brandenburg region. There, Rock Tech Lithium is working to develop battery-grade lithium hydroxide monohydrate by building and operating lithium hydroxide production facilities.

time to read: 6 minutes | Author: Juliane Zielonka
ISIN: Manuka Resources Limited | AU0000090292 , ROCK TECH LITHIUM | CA77273P2017 , BAYER AG NA O.N. | DE000BAY0017

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    Nick Luksha, President, Prospect Ridge Resources
    "[...] As we look at four or more zones in more detail from the beginning, investors can expect a continuous news flow that will underscore our vision of the Holy Grail project as a giant opportunity. [...]" Nick Luksha, President, Prospect Ridge Resources

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    Manuka Resources: Regular weekly gold deliveries from now on

    Australian gold and silver explorer Manuka Resources shipped its third gold shipment to ABC Refinery on August 3. ABC Refinery is Australasia's leading independent precious metals assayer, refiner and minter. Shares of Manuka Resources are up to EUR 0.038 on the news. In addition, Manuka Resources plans to make regular weekly deliveries now as it processes various stockpiles from its Mt Boppy gold project. With the Mt Boppy gold project, the Australians own one of the continent's most historically rich gold mines. Previous mining operations have recovered a total of 500,000 ounces of gold at an average grade of half an ounce per ton of ore. The Company's key project metrics are in line with initial expectations, and the management team is confident of achieving its target of 350 to 450 ounces of gold delivered weekly.

    Gold has traditionally been considered a hedge against inflation, preserving purchasing power when the US dollar depreciates. While inflation reduces the value of the US dollar, gold often has the opposite effect. In addition, gold has a reputation for being a good way to diversify a portfolio, as its value tends to increase in an uneven economy. Investors who wish to preserve their purchasing power today and during future phases of inflation often choose to invest in gold.

    Manuka Resources is benefiting from the current uncertain global economic situation. Another gold delivery to ABC Refinery is scheduled for this week. Deliveries are set to occur regularly on a weekly basis from now on. In parallel, Manuka Resources is processing the various ROM and overburden stockpiles from its Mt Boppy gold project. ROM refers to "Run of Mine" and refers to the raw, untreated or uncrushed material in its natural state that is recovered from the mineralized zone of a lease area after blasting or digging. **Screening of the material proceeds in accordance with the mining plan. Processing of the screened material achieves a gold recovery rate of over 77%. The gold inventory in the system amounted to over 1300 ounces of gold at the end of July.

    Bayer AG - Losses in Monsanto agricultural division again fuel split-up rumors

    Write-downs in the agricultural business caused Bayer to post a billion-dollar loss in the second quarter. The net loss was EUR 1.88 billion, compared with a loss of EUR 298 million in the same period last year, the pharmaceutical and agricultural group announced Tuesday. The Company's loss thus was somewhat less severe than expected. Bayer had previously forecast a loss of about EUR 2 billion. In the period from April to June, the Company posted sales of just over EUR 11 billion, a decline of nearly 14%. Adjusted for currency effects, the decline was about 8%. Adjusted operating profit (EBITDA) shrank by almost a quarter to just over EUR 2.5 billion. Bayer had already published preliminary quarterly figures two weeks ago and significantly lowered its full-year targets. The Company is struggling with significant declines in its glyphosate-based weed control business, which is weighing heavily on its finances. Consequently, the Company incurred goodwill impairment charges of nearly EUR 2.5 billion in the second quarter, significantly impacting Bayer's financial performance.

    New Bayer CEO Bill Anderson is keeping all doors open in the ongoing strategic review of the pharmaceutical and agricultural group. "Simply put, nothing is off the table. In my first few months at the Company, I have asked tough questions, and I have been asked a lot of tough questions," Anderson said Tuesday as he presented his first quarterly results. "We are open to anything, and we are leaving no stone unturned, and that is the mindset with which we approach our strategy and structure."

    Speculation about a possible Bayer split has been circulating for several years, boosted by the involvement of activist investors. A split could address the loss of value at Bayer, as conglomerates are often valued lower than their individual parts. On the stock exchange, what was once Germany's most valuable DAX company now has a market capitalization of only about EUR 51 billion, slightly less than the original EUR 57.3 billion spent to acquire Monsanto.

    Anderson does not rule out the possibility of a split-up of Bayer AG, which some investors have called for. He stated, "The question is whether, with our structure, the three divisions, and the type of corporate center we have, we have the setup that enables us to be the best home for each of these companies." Bayer will update investors on its thinking in the coming months and release detailed plans and financial targets in early 2024.

    Rock Tech Lithium: Mercedes-Benz with 40% of annual production already a customer

    Whether precious metals such as gold for solar panels, new medicines for chronic diseases, or technologies in harmony with the environment, the economic feat of adapting to or leading new realities remains the greatest challenge for companies. One candidate committed to cleantech is the German-Canadian company Rock Tech Lithium. The Company is focused on developing and optimizing battery-grade lithium hydroxide monohydrate by building and operating several lithium hydroxide production facilities in Europe and North America.

    In the picturesque German state of Brandenburg, in the town of Guben, Rock Tech Lithium is building its first lithium converter. In these facilities, the metal is processed and refined to make it ready for use in the production of batteries. CEO Dirk Harbecke expects to be able to put the plant into operation for the first time in 2026. Then it will be possible to produce the first battery-grade lithium hydroxide to be used in battery cells. Harbecke explains in a Capital interview why he chose Germany as a high-priced location instead of, for example, China. Increased efficiency in production puts the Company in a position to compete with Chinese offerings on the market in terms of price. When looking at the Chinese market for electric vehicles, it becomes clear that a significant proportion of the lithium produced in China is needed for the domestic market and is not available for export. Germany and Europe urgently need independent production facilities in order to remain competitive.

    Rock Tech Lithium cannot complain about a lack of demand, as regionalization of supply chains is important in new industries and the electric car industry. Mercedes-Benz is already a major customer, sourcing 40% of their annual production. Current negotiations aim to increase the volume further, both with other car manufacturers and battery cell manufacturers. However, the latter are slower to act in Europe than the automotive industry. Car manufacturers purchase lithium directly and pass it on to various battery cell producers.

    Manuka Resources relies on regular weekly gold deliveries to ABC Refinery. Deliveries are made weekly while Manuka Resources processes the various stockpiles of ROM and overburden material from its Mt Boppy gold project. Processing the screened material results in gold recoveries in excess of 77%. Manuka Resources' stockpile of gold at the end of July was over 1300 ounces. Bayer AG, on the other hand, is struggling with losses in its agricultural division, prompting renewed rumors of a split. Financial difficulties, primarily related to glyphosate-containing weed killers, are attracting interest from activist investors and could lead to strategic changes at Bayer Group. German-Canadian company Rock Tech Lithium is pioneering clean technologies by developing battery-grade lithium hydroxide monohydrate for electromobility. The decision to produce in Germany emphasizes sustainable value creation and regional supply chains at Rock Tech Lithium. The partnership with Mercedes-Benz demonstrates the automotive industry's growing interest in sustainable battery raw materials.

    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.

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    Der Autor

    Juliane Zielonka

    Born in Bielefeld, she studied German, English and psychology. The emergence of the Internet in the early '90s led her from university to training in graphic design and marketing communications. After years of agency work in corporate branding, she switched to publishing and learned her editorial craft at Hubert Burda Media.

    About the author

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