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March 2nd, 2023 | 21:42 CET

Manuka Resources, FREYR Battery, Alibaba - Silver demand accelerates globally, high pace is required

  • Mining
  • Silver
  • Gold
  • Batteries
  • ecommerce
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Global demand for silver and iron is being generated by both conventional industrial needs, such as construction and technology, and progress toward clean energy generation and related commodities, such as batteries and electric vehicles. Australia's Manuka Resources reports an impressive initial mineral resource of 3.2 billion tons grading 0.05% vanadium at its Taranaki VTM iron sands project in New Zealand. This contains 1.6 million tons of vanadium pentoxide (V2O5), making it one of the most extensive vanadium deposits in the world. Vanadium is used for the production of high-performance batteries. This is where FREYR Battery comes into play. The Norwegian company reported its quarterly results and is on schedule with the construction of its in-house battery production facility. Top dog Alibaba also scored a win, as special data on the Chinese market has investors sitting up and taking notice...

time to read: 4 minutes | Author: Juliane Zielonka
ISIN: Manuka Resources Limited | AU0000090292 , Freyr Battery | LU2360697374 , ALIBABA GR.HLDG SP.ADR 8 | US01609W1027

Table of contents:

    Dennis Karp, Executive Chairman, Manuka Resources
    "[...] Internally we expect the resource to significantly grow the deeper we mine. [...]" Dennis Karp, Executive Chairman, Manuka Resources

    Full interview


    Manuka Resources: High silver-gold resources in Cobar Basin

    Silver is recognized as the most versatile precious metal, and demand is being driven by increasing demand across multiple sectors, including electronics, medicine, industry and technology, accounting for more than half of annual global demand.

    Australia-based Manuka Resources is a gold and silver-focused producer with one of the largest mining acreages in Australia. In 2016, Manuka Resources acquired the Wonawinta project in New South Wales, which is now used for silver production.

    The Wonawinta project is located in the world-renowned Cobar Basin, which hosts some of Australia's oldest mines. Geologists estimate that this area contains a resource of 52 million ounces of silver and 236,000 tonnes of lead, consisting primarily of oxides.

    The review identified an additional number of high-grade resources of 22-35 million ounces at 40-50 grams per tonne silver, mainly from the existing shafts at Wonawinta, and 249,000-527,000 ounces at 2.5-3.8 g/t gold from the deep extensions at Mt Boppy, McKinnons and Pipeline Ridge as the main sources. Manuka also identified polymetallic indicated resource targets, including high-grade copper of up to 3%.

    "The results of the strategic exploration review indicate significant resource potential on our Cobar properties, particularly with respect to silver and gold in the vicinity of the mine, but also high-grade copper, as well as zinc and lead," stated Chairman Dennis Karp.

    In addition, Manuka Resources reports an initial mineral resource of 3.2 billion tonnes at 0.05% vanadium at its Taranaki VTM iron sands project in New Zealand.

    FREYR Battery: Commissioning of battery production facility on track

    Precious metals such as silver are important to renewable energy providers and technology companies. One candidate is Norwegian company FREYR Battery, a provider of production capacity for next-generation clean battery cells. The group has announced its financial results for the fourth quarter and full year 2022.

    As the Company moves closer to commissioning the CQP battery manufacturing facility in Norway, collaborations are being formed with strategic, financial and government stakeholders to seek funding options for significant growth initiatives to support simultaneous giga-scale build and supply chain resettlement in the US, Norway and the Nordic region.

    "We expect 2023 to be a truly exciting and transformative year for FREYR and our 24M license partners as we move into battery manufacturing. Our teams are working tirelessly to achieve key milestones. These include producing testable batteries from the CQP, continuing construction of Giga Arctic, executing multiple funding processes in parallel, developing new strategic relationships, and bringing Giga America into first production as quickly as possible. We ended the year with a cash balance nearly identical to the beginning of 2022, and in the interim, have made strong progress across our value chain, with an opportunity set ahead of us that is more robust than ever," said CEO Tom Einar Jensen.

    FREYR reported net income attributable to shareholders of EUR 23.7 million, or EUR 0.19 per diluted share, for the fourth quarter of 2022, compared to a net loss of EUR 27 million, or EUR 0.22 per diluted share, for the fourth quarter of 2021. The gain in the fourth quarter of 2022 was partially attributable to a non-accounting gain of EUR 55.9 million due to the adjustment of the fair value of warrant liability. This change can vary significantly from period to period due to various factors, including fluctuations in FREYR's stock price.

    **As of December 31, 2022, FREYR had a cash, cash equivalent and restricted cash balance of EUR 527 million.

    Alibaba - Covid Crisis overcome?

    Investors may see a rebound in Chinese e-commerce and cloud provider Alibaba this week after PMI data showed that China is quickly leaving behind the effects of the COVID-19 restrictions that slowed the world's second-largest economy last year.

    The official manufacturing purchasing managers' index (PMI) rose to a much higher level in February than the previous month, marking the highest reading since April 2021 - up from 50.1 in January to 52.6 last month. The results exceeded expectations and represent the highest reading in over a decade.

    **Financial markets were quick to react, with Alibaba shares up 5.8% in pre-market trading in the US, while shares of tech company (JD) rose 4.5%.

    PMI data shows that barriers to manufacturing and logistics are rapidly dissipating due to Zero-COVID policies and the ongoing spread of the disease. Ken Cheung, Chief Asian FX Strategist at Mizuho Bank, points out that a rapid recovery is expected, but the PMI readings suggest that the 5.5% GDP growth forecast this year may be too conservative, as Julian Evans-Pritchard, Head of China Economics at Capital Economics, also analyzes.

    The National People's Congress, which begins March 4, will be the focus of investors as they wait for policy signals, including the GDP growth target for this year.

    Demand for silver is increasing due to demand in electromobility. Silver is found in electrical contacts, microprocessors, memory and circuit boards, and radar and camera sensors. Thus, the large silver deposit at Manuka Resources sets the mood for a productive 2023 financial year. In addition, the Australians shine with another find, a likewise high vanadium deposit in their areas in New Zealand. Demand is enormous, as evidenced by FREYR Battery, among others, which will start up its in-house battery production facility at the Norway site this year. China's retailer Alibaba is also recovering from the Covid strain and restrictions. The stock posted a 5.8% gain after PMI data signaled a green light for the economy.

    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.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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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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