Close menu

January 5th, 2022 | 11:23 CET

Noram Lithium, Varta, Allkem - Profit from the growing hunger for lithium!

  • Lithium
Photo credits:

Along with cobalt and manganese, lithium is one of the raw materials of the mobility revolution. The silvery white-grey light metal is needed to produce rechargeable batteries with a very high energy density, such as those used in electric cars. Demand is growing enormously, but there is insufficient production capacity. As a result of this constellation, the price of battery-grade lithium carbonate has risen fivefold in the last year and a half. And it does not look like the situation will ease. Mining group Rio Tinto warns that in the future, only 15% of the supply deficit of battery-grade lithium carbonate can be extracted from existing projects. Lithium producers and explorers will benefit from these conditions. Which lithium stock will make the running this year?

time to read: 3 minutes | Author: Carsten Mainitz
ISIN: Noram Lithium Corp | CA65542K1030 , VARTA AG O.N. | DE000A0TGJ55 , Allkem Ltd. | AU0000193666

Table of contents:

    Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
    "[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG

    Full interview


    Noram Lithium - Potential low-cost producer

    There are two processes for lithium extraction. The first is brine, which is concentrated by means of an arrangement of different evaporation ponds until lithium hydroxide or lithium carbonate can be separated at the end with the help of various solvents. Second is the mining of rock, from which the lithium is extracted and crystallized by chemical processes. While the latter method often proved too expensive in the past, the sharp rise in lithium prices is now making open-pit mining of lithium more attractive again.

    The long-term strategy of the Canadians is to take a leading role in the development of lithium deposits as a low-cost producer and supplier. To that end, Noram is advancing its 100% owned Zeus lithium project in the Clayton Valley of the US state of Nevada. The Zeus project is characterized by its immediate vicinity to the Silver Peak lithium project of the US company Albemarle, which has been in production since 1967, and by its proximity to Tesla Gigafactory 1 for the production of lithium-ion batteries for electric cars and stationary power storage.

    In August 2021, the NI 43-101 compliant resource estimate for Zeus was updated and showed a significant increase. The confirmed resource increased by 60% to 363 million tonnes grading 923 ppm lithium. The inferred resource multiplied (+369%) to 827 million tonnes grading 884 ppm lithium. In total, this equates to a Lithium Carbonate Equivalent (LCE) of approximately 3.89 million tonnes.

    Recently, the Canadians published the results of a project economic analysis (PEA). The Zeus project's calculated value (NPV) is USD 1.299 billion after tax. The project's after-tax rate of return is 31% at an assumed price of USD 9,500 per ton of LCE. However, at the end of 2021, the price was much higher at USD 33,000. Assuming a price per ton of LCE of USD 14,500, the NPV doubles to USD 2.665 billion! The study assumed an annual production of 31,900 tons of LCE and a mine life of 40 years. Given a current market capitalization of CAD 72 million, the potential for Noram Lithium appears enormous. The analysts at Fundamental Research also see it this way and recommend the share certificates as a buy with a price potential of around 80%.

    Varta - No energy

    For the last two months, the shares of the battery specialist have been hovering around the EUR 115 mark with little energy. With business in 2021 expected to be weaker and growth targets also moderate, the stock appears expensive with a 2022 value of over 30. The analyst community is very divided. The ratings are primarily "hold" and "sell," with an average price target of EUR 113.

    While Varta is still the market leader in microbatteries, competition from Asia is increasing strongly and is likely to put pressure on margins in the medium term. Most recently, Apple reported declining demand for the new iPhone 13. Varta supplies the microbatteries for Airpods, Apple's headphones. Perhaps there are signs of falling demand here as well. The southern Germans have announced the production of batteries for electric cars in 2021. There is still far too little known about this to help the share out of its lethargy. After all, the Germans will then be competing in a completely different category against strong and more experienced global players.

    Allkem - Production to start in Québec in 2024

    Allkem, as one of the world's leading lithium producers, is in a perfect position to benefit from further price increases of the raw material. The Company recently released the feasibility study and first ore reserve of the 100% owned James Bay lithium project in Québec, Canada. The feasibility study confirms a sustainable, high-grade hard rock lithium operation using renewable hydropower. The calculated value of the project could be increased by a factor of about 2.5 compared to the preliminary economic assessment from March 2021. Construction is scheduled to start in the third quarter of 2022, with production expected to commence in early 2024 with an output of 321ktpa of spodumene concentrate p.a. for a planned 19 years.

    Noram Lithium has the potential to mature into a low-cost lithium producer. Other advantages of the Zeus project include stable and mining-friendly jurisdiction and proximity to Tesla's Gigafactory. Allkem is equally a beneficiary of rising prices. At Varta, we currently prefer to stand on the sidelines.

    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 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

    Carsten Mainitz

    The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.

    About the author

    Related comments:

    Commented by Stefan Feulner on November 30th, 2022 | 12:01 CET

    Profit now from the energy transition - Rock Tech Lithium, Power Nickel, Shell

    • Mining
    • Lithium
    • Electromobility

    In the past, the internal combustion engine was at the center of the automotive industry, but this is now to change as quickly as possible in order to achieve the specified climate targets. Electrification is the magic word. However, there are high hurdles to overcome in implementing this. For example, it is still not certain whether the battery metals required for this, such as lithium, cobalt, copper and nickel, are available in sufficient quantities. Demand for the critical metals already exceeds supply. The beneficiaries are undoubtedly the producers of the scarce goods.


    Commented by Nico Popp on November 9th, 2022 | 10:07 CET

    The second Rock Tech Lithium? This is how Mercedes-Benz profits! Jack of all trades Infinity Stone Ventures

    • Mining
    • Lithium

    Anyone who has followed analysts' reports on lithium over the past few years knew that the price of this critical raw material for batteries was about to rise exponentially, reminiscent of the gloomiest forecasts of the pandemic - only extremely positively. Putting the actual price curve next to it shows that lithium has shot up almost vertically in recent years and has already reached the level of the 2030 forecasts. Using three stocks as examples, we outline what this means and how investors can take advantage of this market anomaly.


    Commented by Stefan Feulner on November 2nd, 2022 | 10:24 CET

    BYD, Infinity Stone Ventures, Rock Tech Lithium - Profiteers of the energy transition

    • Mining
    • Lithium
    • Electromobility
    • Commodities

    Electromobility plays a central role in achieving the ambitious goal of climate neutrality by 2050. Despite current production difficulties in the automotive industry due to the ongoing chip shortage, global supply chain problems and the effects of the war in Ukraine, demand for battery-powered vehicles continues unabated worldwide, as can be seen from the sales figures of electric car manufacturers. However, there is a problem here: the critical raw material lithium is already becoming scarce for the production of electric batteries. As a result, the already high prices are likely to rise further in the long term - to the advantage of the lithium producers.