December 9th, 2021 | 05:01 CET
Rock Tech Lithium, Noram Lithium, Volkswagen: The highflyers of tomorrow
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"[...] 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
Rock Tech Lithium: Recycling as an ace up the sleeve
One of the best-known investment stories around lithium is the German-Canadian Company Rock Tech Lithium. The Company plans to mine lithium in Canada in an environmentally friendly way and process it in Germany. A factory is planned for this purpose in Brandenburg, near Tesla. In the long term, Rock Tech Lithium is already thinking ahead and emphasizes that by 2030, around half of the lithium it needs will come from the circular economy. This perspective sounds promising, especially from an ESG perspective - after all, recycling is generally even better than any mining, no matter how sustainable.
Rock Tech Lithium's share price staged a spectacular rally in late summer. Then an expected consolidation set in, and Omicron put additional pressure on the share price. However, as lithium prices are rising in parallel and the paradigm shift towards electric mobility is unstoppable, investors can see opportunities in the now more favorable prices. Rock Tech Lithium is well-positioned and scores with a long-term recycling strategy. However, based on the development of the past few months, it cannot be said that the share is at the beginning.
Noram Lithium: Figures convince the market
The situation is somewhat different for the US lithium company Noram Lithium. Noram operates the Zeus lithium project in Nevada and estimates that there are large quantities of lithium on the property, which can also be mined economically. Just recently, the Company published a preliminary economic feasibility study. The key data: A net present value of USD 1.29 billion, an internal rate of return (IRR) of 31%, and a break-even price of just USD 4,016.60 per ton of LCE LOM. According to Noram Lithium, the project could pay for itself after taxes in as little as 3.23 years. Furthermore, the Company points out that a possible extraction would result in comparatively little overburden and that other environmental impacts should also be low.
Sandy MacDougall, CEO of Noram Lithium, commented, "This study is the most significant milestone to date for Noram and establishes us among a limited peer group as the newest, low-cost, high-grade, near-term lithium producer in North America. I am very pleased with what our team has accomplished quickly, on schedule, and at the right time given current and projected lithium carbonate demand." In 2022, Noram said it plans to "aggressively work toward establishing the preliminary feasibility stage." Noram Lithium's stock has already reacted positively to the key economic feasibility data, exiting a sideways move that has lasted for months on the upside. The Company, which in addition to the USA, also names Europe and Asia as potential target markets, is definitely interesting.
Volkswagen: What is going on with Porsche?
A rumor heard from VW circles a few days ago was quite interesting and quickly made the rounds on the market: According to this rumor, Volkswagen is planning to float part of Porsche on the stock exchange. According to the rumor, the Piëch family wants to sell shares in Volkswagen to take over Porsche shares. However, the family is to remain in charge of VW thereafter. The measure could provide Volkswagen with the necessary funds to continue investing in future technology. Since Volkswagen and Porsche are now closely intertwined, Porsche should also benefit from these investments. While such ramifications are not usually well-received in the market, VW's stock recently made a joyous leap. Since early summer, however, the share has been on a downward trend - only a jump above the EUR 200 mark will restore hope in the medium term.
Although Volkswagen is on the right track and is rightly considered one of Germany's electric pioneers, the transformation is also a challenge. Growth companies such as Rock Tech Lithium or Noram Lithium could be more promising for investors. The latter Company is at an earlier stage, which could promise more momentum.
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