Close menu




February 16th, 2021 | 12:53 CET

Nevada Copper, BYD, Varta: Now it's getting hot!

  • Copper
Photo credits: pixabay.com

According to 2020 research from IDTechEx, the introduction of electric traction motors in road vehicles will lead to a significant increase in copper demand over the next 10 years. The study, commissioned by the International Copper Association (ICA), shows that by 2030, more than 250,000 tons of copper per year will be used as part of the windings in on-road electric traction motors. The current increase in copper demand follows the development of the global automotive market. Pure battery-electric cars are expected to gain the most market share at the expense of internal combustion engines and hybrid vehicles. Copper investments, therefore, remain the first choice!

time to read: 4 minutes | Author: André Will-Laudien
ISIN: CA64128F1099 , CNE100000296 , DE000A0TGJ55

Table of contents:


    Nick Mather, CEO, SolGold PLC
    "[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC

    Full interview

     

    Nevada Copper - Fresh financing completed successfully

    Already 70% of the world's copper production is used in electrical products, with the remainder ending up in the construction and industrial sectors, not to mention in the mint. In recent years, many government coin producers have reduced the high copper content in coinage and used nickel alloys instead. However, this has been a rather fading measure against the copper shortage. In some countries, even major substations are now guarded around the clock to curb copper theft. You can tell - this raw material is in short supply!

    The significant demand driver for copper comes from e-mobility. By 2030, electric and plug-in hybrid cars will account for about 19% of the total market, rising to 72% by 2040, according to IDTechEx. Whether it will happen that fast may be doubted today, but the trend is unstoppable.
    Nevada Copper sits on an extensive resource with underground and open pit potential nearby. Both prospects are located in Nevada and have an added mine life of more than 30 years, with commercial start-up expected in the 50 million pound underground mine as early as 2021.

    There has been no new production facility in North America in the last 10 years, so international attention to Nevada Copper's Pumpkin-Hollow project is very high. The target is a production price of approximately USD 2 per pound, and the market price is currently trending towards USD 4 - a good margin situation.

    The Company recently announced another successful financing step. A syndicate of Canadian banks underwrote 230 million shares with a placement price of CAD 0.165. Total proceeds are CAD 38 million. After the good news, the NCU share is again moving towards CAD 0.20. Before Christmas, one could still acquire the value at CAD 0.09. We are still in the project stage, and the increase should continue immediately when the last financing for the mine is in place.

    BYD - Expansion to Australia and New Zealand

    Again good news from "Build Your Dreams" (BYD). The Chinese Group BYD was able to significantly increase sales of its electric vehicles in China in January. BYD sold 20,178 electric vehicles and plug-in hybrids, 183% more than in the same month last year. This included 14,463 e-cars (+181%) and 5,408 plug-in hybrids (+188%) in the passenger car segment. In addition, there were 307 e-commercial vehicles (+172%). While the whole thing looks good, it is sequentially below December sales. However, this is not a bad thing as December is traditionally a strong month for consumer activity in China. On average, the declines were between 25% and 34%. But sales of internal combustion models also fell more sharply than December and were also up compared to January 2020.

    BYD is in the process of diversifying its automotive sales geographically. It announced a long-term agreement with Nexport to collaborate on developing and distributing BYD's next-generation electric cars in Australia and New Zealand. This is the first time the Chinese Company has ventured outside of China. The launch of electric vehicles in Europe, starting in Norway, has also been expected for some time.

    In Australia and New Zealand, pre-sales of BYD electric cars will begin in July 2021. A total of four models are envisioned, all of which will be powered by LFP battery technology: Han, Song, Qin and Tang. BYD cannot yet rely on a dealer network, which means they will go into direct sales. Currently, the EV market in Australia accounts for less than 1% of new car sales. When the Company will enter the North American market is likely to remain a power-play between Elon Musk and the governments involved for the time being. The BYD share continues to trade at a high near EUR 28.

    Varta - Shortseller attack is over

    It was a roller coaster ride in February. After the Varta share moved strongly upwards right at the beginning of the year, this called short sellers onto the scene. Varta AG temporarily reached a price of EUR 180, but then the share price fell below EUR 140. After the short-sellers withdrew, the Varta share has been calm again since mid-February. The environment is still likely to remain volatile. On February 18, CEO Herbert Schein will provide a detailed insight into the recent business development and is also expected to give an updated outlook for the current year. The market has high expectations.

    In particular, market participants are likely to be eager to hear the Board of Management's arguments following the good 9-month figures. After all, in late summer, he knew nothing about an upcoming lockdown at the turn of the year. We expect that the Company can still meet the recently raised sales forecast of EUR 840 to 860 million (previous year: EUR 362.7 million) for 2020, but presumably, the outlook for 2021 is slightly lower. Adjusted EBITDA could reach between EUR 230 million and EUR 235 million, and the battery manufacturer will also continue to grow in the current fiscal year, provided the general conditions play along.

    In the future, Varta wants to transfer its lithium-ion technology to new, larger batteries and continue to score in the energy storage sector. Innovative battery cells for powering e-cars would be the crowning achievement in the long term, and here the stock market has been speculating for months on a major coup. In recent days, the share has recovered from the previous week's sell-offs and stabilized above the EUR 150 mark, which means that a factor of 7.3 is paid on the planned sales in the capitalization. Quite expensive for an industrial stock but a good deal for an e-mobility company.


    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 in the future hold shares or other financial instruments of the mentioned companies or will bet on rising or falling on rising or falling prices and therefore a conflict of interest may arise in the future. conflict of interest may arise in the future. The Relevant Persons reserve the shares or other financial instruments of the company at any time (hereinafter referred to as the company at any time (hereinafter referred to as a "Transaction"). "Transaction"). Transactions may under certain circumstances influence the respective price of the shares or other financial instruments of the of the Company.

    Furthermore, Apaton Finance GmbH reserves the right to enter into future relationships with the company or with third parties in relation to reports on the company. with regard to reports on the company, which are published within the scope of the Apaton Finance GmbH as well as in the social media, on partner sites or in e-mails, on partner sites or in e-mails. The above references to existing conflicts of interest apply apply to all types and forms of publication used by Apaton Finance GmbH uses for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and etc. on news.financial. These contents serve information for readers and does not constitute a call to action or recommendations, neither explicitly nor implicitly. implicitly, they are to be understood as an assurance of possible price be understood. The contents do not replace individual professional investment advice and do not constitute an offer to sell the share(s) offer to sell the share(s) or other financial instrument(s) in question, nor is it an nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but rather financial analysis, but rather journalistic or advertising texts. Readers or users who make investment decisions or carry out transactions on the basis decisions or transactions on the basis of the information provided here act completely at their own risk. There is no contractual relationship between between Apaton Finance GmbH and its readers or the users of its offers. users of its offers, as our information only refers to the company and not to the company, but not to the investment decision of the reader or user. or user.

    The acquisition of financial instruments entails high risks that can lead to the total loss of the capital invested. The information published by Apaton Finance GmbH and its authors are based on careful research on careful research, nevertheless no liability for financial losses financial losses or a content guarantee for topicality, correctness, adequacy and completeness of the contents offered here. contents offered here. Please also note our Terms of use.


    Der Autor

    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.

    About the author



    Related comments:

    Commented by Armin Schulz on September 27th, 2022 | 11:01 CEST

    Kodiak Copper, Nordex, BYD - Copper price indicates recovery of the economy!

    • Mining
    • Copper
    • Electromobility
    • Battery

    Copper is considered a leading indicator of the economy. The red metal is built into almost all electrical products and is needed in many industries. If we compare the spot price of copper with the futures, we can see that the premium per metric ton has increased significantly. This is matched by the fact that China imported 8.1% more copper through August, despite the country's Zero-COVID strategy. In contrast, Chile, one of the largest copper producers, exported less than last year. So supply remains tight, partly due to demand from Europe, which is significantly expanding renewables. So today, we look at three companies around copper.

    Read

    Commented by Stefan Feulner on September 26th, 2022 | 10:28 CEST

    BYD, Globex Mining, Newmont, Freeport-McMoRan - Copper with doubling potential

    • Mining
    • Copper
    • Gold
    • Commodities
    • Electromobility

    The price of copper has lost around a third since March of the current stock market year. Investors are selling the metal, which is known as an economic barometer, due to global recession fears and concerns of a drop in demand. However, due to the great importance of copper with regard to the energy turnaround, the tide is likely to turn again soon. Mining companies and commodity traders are already warning of a massive shortage of the world's most important metal. Goldman Sachs expects the price of copper to reach USD 15,000 per ton by 2025, which would mean a doubling of the current level.

    Read

    Commented by André Will-Laudien on September 24th, 2022 | 21:30 CEST

    The green wave keeps rolling! Siemens Energy, Nel ASA, Alpha Copper, Plug Power - Copper now at 7,800!

    • Mining
    • Copper
    • GreenTech
    • Hydrogen

    Not enough copper is being mined! Despite this, the price has recently corrected by about 25%. It is mainly due to the worse economic expectations for the coming years. The orders are therefore falling, and the price is also falling slightly. However, the warehouses, due to many strong basic trends such as electromobility, will soon ensure that there will be a renewed shortage. These recurring economic trends, the increasingly difficult supply chain issue and the now high-interest rates are causing high planning uncertainty. Ultimately, they also weigh on mine output locally. We look at the opportunities and risks of the green wave!

    Read