23. June 2021 | 11:28 CET
Standard Lithium, Osino Resources, Ballard Power - These stocks are going through the roof
When German investors think of Canadian stocks, two topics usually come to mind: commodities and cannabis. Many companies from these two sectors are headquartered in one of the Canadian cities of Montreal, Vancouver or Toronto. The Canadian stock market accounts for 5% of the world's stock market capitalization, while the country holds only 0.5% of the world's population. But there are also interesting investments outside the two sectors mentioned. So who makes the race?
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ISIN: CA8536061010 , CA68828L1004 , CA0585861085
"[...] Our projects are at the initial, high reward exploration stage. [...]" Humphrey Hale, CEO, Managing Geologist, Carnavale Resources Ltd.
Standard Lithium - Lanxess with around 5% stake
Recently, Vancouver-based technology and lithium development Company Standard Lithium announced that its project partner, German specialty chemicals group Lanxess, exercised its conversion right from a bond issued in 2019. As a result, it is now the owner of around 6.3 million shares and about 3.1 million options. This means that the Germans, who are developing a pilot project with the Standard Lithium company at the American site in El Dorado, Arkansas, to extract the raw material lithium from brine, which is urgently needed for electromobility, will have a future stake of around 5% in the Company (excluding options).
Though Lanxess had expressed some dissatisfaction with the project's progress when it presented its quarterly figures in May, the exercise of the conversion right should be seen as a strong indication that Lanxess is confident of getting the final problems with the operation of the plant under control. Lanxess already produces bromine products at the El Dorado site with around 500 employees at three plants. As a by-product, so to speak, lithium can be extracted from the brine, produced in the order of several million liters a day.
Investors welcomed the news with substantial price gains and a new all-time high of the Standard Lithium share. Whether it is still worth buying at the current price is, of course, a question of faith. Those who trust the expertise of Lanxess can undoubtedly count on a regular functioning production and further rising prices. Stock analysts are still divided on this. While some still see a price potential of around 10% for the Canadians, others already classify the share as overvalued. We think that investors who are willing to take risks can still risk an entry at the current price given the expertise of the project partner and in comparison to other lithium projects currently under development.
Osino Resources - Two new mineralized zones identified at Twin-Hills in Namibia
Osino Resources Corp. is a Canadian explorer engaged in the identification and verification of global gold deposits. The current main project, Twin-Hills, is located in the Damara Sedimentary Belt in Namibia, an economically and politically stable country with a long mining tradition and advantageous jurisdiction. Incidentally, in this region, also known as the Namibian Gold Belt, a team led by Osino's current CEO, Heye Daun, had in the past explored and developed the Otjikoto mine, which is located in the immediate vicinity, and sold it to the Company B2Gold. The latter now operates the mine highly profitably.
The 14 brownfield targets identified in 2020 by an induced polarization (IP) survey could finally be tested by new drilling. Four of these holes showed significant gold mineralization ranging from 0.79 g/t to 1.96 g/t. In addition, two of these holes marked new mineralized zones: "Clouds North" and "THW Terminal 1". The 25,000m brownfield program has completed 63 drill holes for 18,549m since March, with just over 20 holes remaining. These are designed as diamond drill holes and are expected to be completed in August. As assaying of drill core takes an average of about two months, Osino does not expect new results until October.
The Company hopes to add significantly to its initial April 21 resource estimate of 430,000 ounces at 1.00 g/t gold (indicated) or 1.47 million ounces at 1.08 g/t gold (inferred). In any case, analysts are impressed by the results to date. The median target price for the share, which is also traded in Frankfurt, is around CAD 2.60, roughly corresponding to a doubling of the share price. It is assumed that with a higher resource estimate in the autumn, these expectations will be corrected upward once again. Investors should therefore seize the opportunity and start to build up a position.
Ballard Power Systems - Competitive advantage with longer-lasting fuel cells through a new collaboration
The fact that the shift to electromobility is currently focusing almost exclusively on battery-powered vehicles, while hydrogen-based solutions are currently lagging, is due to two factors that also influence each other: on the one hand, there is no nationwide hydrogen infrastructure, and on the other hand, the only currently mature technology for hydrogen-powered vehicles, namely the fuel cell, is costly due to the materials required, such as platinum. In addition, it would help if the service life of the fuel cells could be extended. It is precisely this competitive advantage that the Canadian fuel cell specialist Ballard Power Systems has now secured.
Through its cooperation with the American industrial Company WL Gore & Associates, Ballard now has access to a new type of membrane that significantly extends the service life of the cells thanks to long-term supply contracts. Further measures to increase efficiency are also planned. The partners have already worked together in the past and therefore know each other well. For investors, this should be long-awaited positive news, as the share price has suffered a severe correction of almost 60% over the past six months in the course of the general consolidation of hydrogen stocks. The stock may now have finally bottomed out. In any case, analysts currently see an average upside of over 20% for the shares.