31. May 2021 | 10:18 CET
Millennial Lithium, Orocobre, ThyssenKrupp, NSJ Gold - Bitcoin versus Commodities - bull market ahead!
It could still end badly! The crypto world corrects properly; Bitcoin has now lost over 50% from the top. Whether it was the ban in China or simply an exaggeration - we do not know. The fact is that stocks continue to rise just like yields, i.e. the inflation trend in assets of all kinds is once again in full swing. The stock and real estate markets are not bothered by the higher interest rates, and commodities are also marking new highs every day. The bull market in commodities seems well-founded if one wants to evaluate the physical scarcity of wood, iron, nickel, copper and aluminum. The same is true for gold & silver. Will lithium also start again soon?
time to read: 4 minutes by André Will-Laudien
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Millennial Lithium - Battery grade lithium from Pastos Grandes
Millennial Lithium's share price has been running sideways for a long time, but the mining operations in Argentina are showing progress. The Company recently reported the production of battery-grade lithium carbonate (99.96%) during the commissioning of the pilot plant at the Pastos Grandes project in Argentina. The sample was from the first batch of brine processed at the Company's pilot plant in Argentina's Salta province.
This marks an important milestone for Millennial. The brine feedstock came from the Company's PGMW17-04 production well on the Pastos Grandes Salar. Here, brine is pumped into ponds where the lithium carbonate is concentrated by solar evaporation alone. Particle size determination (PSD) test results show that the lithium carbonate product has a typical size distribution and is suitable for micronization in battery applications. Thus, the process design for the Pastos Grandes project demonstrates "technical grade" industry standards to produce exportable lithium carbonate. Impurity levels in the final product are very low and meet battery manufacturer specifications.
Millennial shares are currently running sideways technically in a narrow band. For a new upward push, breaking above the EUR 2.30 level would be essential.
Orocobre Ltd. - Good figures from Argentina
Orocobre can also come up with good figures. The lithium producer, which is also active in Argentina, reported last week that its lithium carbonate production in the first quarter of 2021 was 3,232 tons, up 18% from 2,732 tons in the first quarter of 2020. Already 55% of the production reached a battery-grade purity factor.
Furthermore, brine concentration is reported to be higher than in recent years, resulting in increasing daily production rates, higher equipment yield and lower costs. Product sales totaled 3,032 tons of lithium carbonate, up 20% year-on-year but down 30% compared to the December 2020 quarter, and total revenue increased 46% to USD 17.7 million compared to the March 2020 quarter.
The recently announced merger with lithium producer Galaxy Resources leaves the fifth-largest LI producer. At the end of the quarter, Orocobre had cash on hand of USD 185 million. Orocobre's planning assumes that the lithium market will continue to recover. The rationale lies in the average achievable sales prices for lithium carbonate. They increased by more than 50% compared to December 2020, as cathode producers continue to increase production in response to high demand from the e-mobility sector. Orocobre's share price is back, just ahead of its 2018 high and already up 184% from May 2020 - making it a best performer in the sector.
ThyssenKrupp - Climate neutrality from the furnace?
The steel industry faces the major challenge of making the transition to climate neutrality. But "green steel" is expensive and a lot of money has to be invested in its production to begin with. ThyssenKrupp has recognized the signs of the times, but its competitors are not sleeping either.
Last week there was a summit meeting between the industry and politicians, with heated discussions about the economically viable options for reconciling climate protection and steel production. The industry is still years away from achieving this. Steel managers expect financial support for the new climate protection legislation, particularly in view of Germany's possible change in government. Therefore, the billions in investment will only be tackled if there is political support for Germany as a steel location.
Also crucial is fair competition without cheap imports, strengthening demand for "green steel," or securing competitive prices. Meanwhile, the European competition is not standing idly by. The Swedish start-up H2GS, for example, wants to produce 5 million tons of fossil-free steel by 2030. Carmaker Daimler has now joined the Company. Daimler also wants to make its supply chain CO2-neutral in the future.
ThyssenKrupp still has a long way to go. However, there is no way around the necessary investments for the future, but the necessary change in the steel sector is unlikely to yield profits at first. That is precisely the problem: ThyssenKrupp cannot afford such a transformation on its balance sheet. The TKA share has also recently slipped back below the EUR 10 mark. Wait and see!
NSJ Gold Corp - Drilling program completed
Those not wanting to invest in lithium or steel turn to gold. According to portfolio theory, an investment in several commodities makes perfect sense because broad diversification reduces volatility and thus the risk in the investment.
The explorer NSJ Gold appears attractive. It has an option to acquire a 100% interest in the Golden Hills project in Arizona, USA. The property is located 100 miles west of the Kay Mine (owned by Arizona Metals Corp.) and 80 miles south of the Moss Mine (owned by Northern Vertex Mining Corp.). The property consists of 121 mining zones covering a total area of 9.6 square miles.
NSJ Gold has now successfully completed its drill program at its Golden Hills project. 16 holes totaling 1,263 meters were tested, ranging in depth from 6 to 122 meters. One of these targets shows a high-grade gold intersection that has proven to be at least 88 meters long and is part of a 570 meter IP anomaly. Three other IP anomalies were tested, totaling approximately 1,625 meters in length. All holes reached their intended depth and are currently at ALS Labs for geochemical analysis of gold, silver, copper and iron concentrations.
NSJ shares are currently trading at CAD 0.20, giving the Company a valuation of only CAD 4.6 million. Given possible surprises from the laboratory tests, this is an absolute bargain, even for those who want to follow the gold outbreak further.