October 19th, 2021 | 11:12 CEST
Rock Tech Lithium, Barsele Minerals, Standard Lithium, Orocobre - Now the hunt is on!
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"[...] Both the geology and the infrastructure around the project make for a very attractive cost structure. We expect to be able to produce at 50% of the current gold price. [...]" Bill Guy, Chairman, Theta Gold Mines Limited
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.
Rock Tech Lithium - The first impact in Germany
Chairman Dirk Harbecke will not have expected something like this either. A few days ago, Rock Tech Lithium announced the construction of a lithium hydroxide production facility. The somewhat sleepy RCK share price since summer immediately made a massive leap of pretty much 100% upwards. The price explicitly jumped from CAD 4.20 to 8.40 in the last trading week.
The new plant will be built in Guben, Brandenburg, and thus only about 60 kilometers from the Tesla Gigafactory in Grünheide. The target is an annual lithium hydroxide production of 24,000 tons, enough for around 500,000 traction batteries for electric vehicles. Currently, most lithium is still produced in refineries in the Asian region. However, Rock Tech Lithium now wants to process lithium hydroxide using the planned converter factory in the Guben-Süd industrial park. The raw material for the lithium hydroxide will be extracted from a mine in Ontario, Canada. Rock Tech puts the total investment volume at up to EUR 470 million. The factory is scheduled to start operations in 2024.
The German research house Montega updated its recommendation for the Canadian share only last week. Their vote remains "buy." The price target was lowered slightly from CAD 10 to 9.50. The stock already landed at CAD 9.00 last week. Rock Tech plans to become a key player in the battery technology value chain in Brandenburg. The share maps this future scenario very well but has also run fast. Buy further only in a stronger consolidation.
Barsele Minerals - The Sweden project awaits news
Sweden stands for progress and technology. For its own country, the government has very ambitious climate targets. Already in March 2009, the government presented its targets for 2020. According to these announcements, the country wanted to be completely independent of fossil fuels by 2020 and reduce its CO2 emissions by 40% compared to the reference year 1990. Great targets, but like many other European countries, Sweden is lagging behind its ambitious goals.
One commodity company that is still small is Barsele Minerals, which is based in Canada and has a very interesting Swedish project. It is located in the mining region of Västerbottens Län in northern Sweden, 600 km north of Stockholm, and covers 33,500 hectares in the Fennoscandian Shield. The Barsele project is located at the western end of the Proterozoic "Skellefte Trend", a prolific belt of volcanogenic massive sulfide deposits that overlaps with the "Gold Line" in northern Sweden. Both polymetallic deposits and intrusive-hosted gold intercepts are present in this region.
Until a few months ago, the Canadians were virtually a pure holding company and thus little known among commodity specialists. Barsele previously held a 45% interest in the Barsele Project in northern Sweden. In May, they published a letter of intent that they had concluded with Agnico Eagle. According to the letter of intent, Barsele Minerals will completely take over the gold project of the same name and acquire Agnico Eagle's share of 55%. Since the purchase terms have already been fixed and Barsele can continue exploration in peace, the agreement was considered a good deal for Barsele, not least because of the high quality of the project.
At the beginning of September, both parties to the agreement announced the deadline for purchasing the project would be extended to the end of October. Now the stock market is waiting for news, stirring up some unrest in the current environment and weighing on the share price. The share moved back from CAD 0.70 to about CAD 0.50. However, since the deal is still considered to have been decided, the lower entry price does not come at an inopportune time. Dynamic investors use the favor of the hour.
Standard Lithium versus Orocobre - Through the ceiling and away
Another shooting star of the last days is Standard Lithium. In cooperation with the German Lanxess, they are working intensively on a lithium deposit in Arkansas. Although the newsflow for the share is not so pronounced, the price exploded upwards in the last 2 months. The news from Rock Tech Lithium also pushed the price up another 30% to over CAD 13. As of the beginning of the year, the share is now up more than 600%. The established and merged producer Orocobre can "only" show a price development of plus 260%. What is the future here?
The development companies, in particular, are currently outperforming the established producers such as Orocobre. It is not surprising, as producers have to pay high prices in acquisitions. The recent acquisition of Neo Lithium is a case in point. Zijin Mining is putting nearly a billion Canadian dollars on the table for the group with the 3Q project in Argentina.
One of the few remaining potential takeover candidates on the price list is Standard Lithium. The recent pre-feasibility study on the SWA project in the US sounds very promising - 30,000 tons of lithium hydroxide could be produced there over a 20-year period. Such a project would make a good lithium producer, but it would require an investment of more than USD 900 million. Currently, the hype is great in lithium shares; after several 100 percent gains, do not miss to press the sell button. The chart stop for Standard Lithium would be CAD 11.80.
The hype in the metal sector continues. Especially for battery metals like lithium, cobalt and graphite, prices are going through the roof. Rock Tech and Standard Lithium have already multiplied in 2021. The small Barsele Minerals with its deal in Sweden can still be great fun.
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