July 24th, 2020 | 07:30 CEST
NEL ASA, Royal Helium, SolGold - profit lies in purchasing
Table of contents:
Born and raised in Hannover, Lower Saxony follows social and economic developments around the globe. As a passionate entrepreneur and columnist he explains and compares the most diverse business models as well as markets for interested stock traders.
Potential in the inert gas business
Elon Musk has big plans in space and will need a lot of helium in the future. The inert gas cannot be produced artificially and must therefore be extracted from appropriate deposits or extracted from natural gas. In space travel, helium is used to control rockets. The largest market for helium, however, is the health sector, as magnetic resonance imaging (MRI) requires around 20% of the available noble gas every year. About 14% of the supply is used for welding. However, the largest single customer is Nasa, which works closely with Musk's SpaceX.
To ensure that sufficient helium will continue to be available for modern society, Royal Helium has secured about 400,000 hectares of properties for the exploration and production of the noble gas in North America. With this portfolio, the company is one of the largest project holders. Management has identified 12 targets for drilling and if successful, further targets will certainly follow. The company is still at the beginning of its value development with a market value of CAD 15 million.
A major producer is emerging
SolGold is a major exploration company focused on the discovery and definition of copper-gold deposits. The company has established a reputation in Ecuador and has been able to secure a little-explored section of the Andean Copper Belt. Several copper and gold projects have been discovered and it is believed that half of the world's copper resources are located there. Between 2010 and 2019 SolGold discovered 10% of all gold discoveries worldwide.
SolGold has defined 21.7 million ounces of gold, 9.9 million tonnes of copper and 92.2 million ounces of silver at the Alpala project in Ecuador to date. The Company now intends to complete a pre-feasibility study for its Cascabel project. By February 2020, SolGold had completed over 227,000 meters of drilling at Cascabel. For the future, annual production of 150,000 tons of copper and 245,000 ounces of gold is projected. Demand for copper will continue to grow in connection with the electrification of society and the gold price has known only one direction for months - soon it seems that the USD 2,000.00 per ounce mark will be reached. SolGold is valued at CAD 827 million on the stock exchange and has corresponding price potential, as the company's market capitalization is far below the value of Alpala alone, without taking into account the value of the 13 other projects.
Only green energy for hydrogen makes sense
NEL ASA is a plant engineering company from Norway that focuses on the production and sale of hydrogen. The company supplies key components for the development of an infrastructure for hydrogen-based electromobility. In Germany, there are currently about 14,000 filling stations set up for the sale of gasoline and diesel. If the development of vehicles with fuel cells for the generation of electricity from hydrogen continues to advance and meets with interest from buyers, then NEL ASA's market potential is correspondingly large.
Against the background that sufficient renewable energy must be available for the production of green hydrogen, a clean environmental balance can currently only be achieved in a few regions on earth. As long as coal has to be burned to generate electricity for the production of hydrogen, modern diesel engines have a better standing in society. The market value of NEL ASA is currently around EUR 2.5 billion.
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