April 19th, 2021 | 16:58 CEST
Rock Tech Lithium, BYD, Millennial Lithium - The lithium boom is coming!
Table of contents:
"[...] In 2020, the die is finally cast in the automotive industry towards electromobility. [...]" Dirk Harbecke, Executive Chairman, Rock Tech Lithium Inc.
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 - Plans are in place for Germany
If automakers are serious about their pronouncements, in 10 years, every 4th vehicle in the world should be equipped with a non-fossil propulsion system. That would represent a good tenfold increase over today's penetration. Some manufacturers, such as Volvo, do not want to send any internal combustion vehicles on the road from 2025. It has also been clear for a few weeks that the main investments will be in the electric sector; hydrogen does not seem to be reaching the mass market any time soon.
With German management, the Canadian lithium junior Rock Tech Lithium is also moving forward. Rock Tech Lithium plans to build a converter plant for battery-grade lithium hydroxide in eastern Germany with an annual capacity of about 24,000 tons. According to initial plans, the project costs will be around EUR 400 million, and the whole thing is to be managed hand in hand with industry. The project is scheduled to go into operation as early as 2023, an essential step toward making the supply of raw materials in Europe more secure. Currently, 80% of the world's lithium today ends up in China.
In Canada, the Company can already draw on an existing surface resource for the extraction of lithium sulfate, and here too, the first concentrates are to be produced from 2023. Based on current market prices and automotive manufacturer publications, the Company is targeting estimated initial revenues of around EUR 300 million from both sites once production starts. The problem of purifying lithium from impurities to achieve industrial standards is being implemented using German engineering expertise. For this purpose, talks have already been held with GP Papenburg, a traditional company from the raw and building materials industry. The planning of the first German lithium project sounds good overall.
Rock Tech's shares are actively traded in Canada and Germany. With the now known plans and the entry of the well-known investor Peter Thiel, the giant leap from January becomes understandable. After consolidation, the market capitalization is currently about CAD 248 million, which is about 5 times the profit that can be made from 2023 based on today's lithium prices. If the financing of the German site is bagged quickly, the next push in the stock will occur, which already reached CAD 9.50 in the January wave.
BYD - The world's largest battery manufacturer
Since entering the automotive business in 2003, BYD has taken advantage of the technology and cost benefits of manufacturing in China. Over the years, BYD has become a leading automotive manufacturer in China with its brand. As a pioneer in research and development to use new energies, the group has achieved a global reputation; BYD is now the world's largest producer of rechargeable batteries. But the group can do even more. It produces components for smartphones and PCs and new intelligent systems for the automotive industry, medical technology, and healthcare solutions.
The Company's primary customers include the who's who of the high-tech industry, including Huawei, Samsung, Apple, Vivo, Xiaomi and other leading manufacturers of smart mobile devices. BYD is now one of the leading battery manufacturers in lithium-ion batteries and the development of modern drive systems in urban rail transport and automotive engineering. If you think about e-mobility worldwide, you cannot avoid BYD.
The BYD Annual General Meeting will take place this year on June 8 in Shenzhen. The 2020 annual report shows in full how successful the Company has been able to position itself in recent years. Sales increased by 18% to CNY 153.5 billion and profit grew by 160% to CNY 4.23 billion. In just 10 months, the stock market acknowledged this development with a 500% rise in the share price, with the share hitting a low of EUR 4.84 in April 2020. The 2021 January rally ran to EUR 29.49, and since then, there has been an initial price reaction down to EUR 17.5 in the low. For a few days now, it has been going up again. The success story looks to go into the next round in mid-2021.
Millennial Lithium - The time has come in 2022
Millennial Lithium's stock is one of the best-known pure-play lithium stocks on the German stock market. Millennial is also still a junior, but work on its feasibility study is well underway. The Company is focused on developing its flagship Pastos Grandes lithium brine project, located in Salta province in Argentina's Lithium Triangle. Well-known lithium producers in this triangle include SQM, Albemarle, Livent Corp. and Orocobre, all of which are already operating at capacity.
Millennial Lithium also recently raised fresh money. With lithium demand likely to run rampant over the next few years but supply remaining limited, Sprott Capital Partners also stepped in in February 2021. Subsequently, another bought-deal financing of 8.6 million units at a price of USD 4.00 each, for total gross proceeds of USD 34.5 million. The current cash position in the balance sheet shows an ample USD 50 million. The running costs for the technical programs, including a pilot plant, are thus secured. According to recent reports, management now sees itself in the phase of exploring strategic partnerships and offtake negotiations with various parties.
The Pastos Grandes project processing plant is expected to start up as early as 2022, not too long from today's perspective. Millennial's shares consolidated at the low to EUR 1.85 and worked their way back up to EUR 2.08 in the third week of April. The high of the share was at EUR 3.84 in January 2021. Millennial continues to be an interesting stock in this segment.
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.
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.