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October 14th, 2021 | 13:55 CEST

Varta, Standard Lithium, Sierra Grande Minerals, Nordex - The next hype rolls in!

  • Copper
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In Germany, politics is becoming significantly greener! But what do the mobility concepts of the climate protectors look like? In addition to the publicly demanded reduction of unnecessary business flights, the bicycle would also be an alternative for 30-kilometer journeys. Fossil energy has already become 50% more expensive in 2021, and gas prices are going through the roof. There is still a high demand for energy in Germany because we are currently buying cheap nuclear power abroad. This is how it can go when a botched energy policy is associated with climate protection goals. No matter how things go, the world needs copper for modern technologies, and this raw material, along with lithium and other critical metals, is just terribly scarce. How are the typical industry players doing?

time to read: 4 minutes | Author: André Will-Laudien
ISIN: VARTA AG O.N. | DE000A0TGJ55 , STANDARD LITHIUM LTD | CA8536061010 , Sierra Grande Minerals | CA82631L1085 , NORDEX SE O.N. | DE000A0D6554

Table of contents:

    Ryan McDermott, CEO, Phoenix Copper
    "[...] If we pursue our goals conscientiously, the market will adjust its valuation accordingly, I am sure. Often, all it takes is a trigger. [...]" Ryan McDermott, CEO, Phoenix Copper

    Full interview


    Varta and Standard Lithium - Takeover rumors drive share prices

    A lot is going on in the battery sector right now. After Millennial Lithium, Neo Lithium is now also being bought up. According to Wall Street speculations, the next candidate could be Standard Lithium, but a potential buyer would have to put significantly more money on the table. A just-published feasibility study (PEA) increases the enterprise value of Standard Lithium quite considerably. We have already described the outstanding property in Arkansas several times.

    At Varta, prices of EUR 111 were recently written on the board, just a week ago. Yesterday, the paper was quoted again at EUR 126. One gets the impression that the investment community is confronted with new facts daily and reacts accordingly. At the beginning of the week, Rock Tech Lithium also announced that it wants to build up a lithium production in Brandenburg. That would be a planned capacity for 500,000 units starting in 2024 in close proximity to Tesla in Grünheide.

    Varta has been working closely with German automakers, looking for a super battery that can do everything and costs little. It has long since been recognized that long-distance travelers with a two-hour wait for the next accessible charging point at a barren highway charging station can hardly be won over to the topic of e-mobility. The required parameters are fast-charging capability, enough charging stations and a long-life battery with an acceptable range of more than 800 kilometers. Financiers are lining up, and now the industry is challenged to deliver quickly.

    From a valuation perspective, standard lithium and Varta are overpriced. However, the example of hydrogen shows where shares can end up when the herd can no longer be stopped. Overall, however, the candidates mentioned are only suitable for speculative investors.

    Sierra Grande Minerals - First discoveries show potential

    The high-tech industry has picked up the ball on reducing greenhouse gases. Crucial for many technologies remains the availability of copper and other industrial metals. The Canadian explorer, Sierra Grande Minerals, focuses mainly on copper as well as silver, gold and molybdenum in its properties in Peru and Nevada. On the three US projects, they have already started to evaluate corresponding soil samples.

    Now the first results of soil samples from the Betty East project have been reported. It is located less than 20 km south of Kinross Gold's Tier 1 Round Mountain mine. The samples were positive and indicate industrially viable mineralization. While gold and arsenic were more likely to be found in the northern part called Knolls, silver, arsenic, antimony, mercury and molybdenum are encountered to the north. Excellent infrastructure has historically been present in Nevada: Electricity, water, and utilities are available nearby in local mining towns.

    If you are looking for a small successor in the copper market and consider the supply situation over the next 10 years, you will see the potential of even smaller copper projects. Sierra Grande is still a junior, as the valuation is still very manageable at CAD 6 million. Should a major take notice of the small prospector, multiple valuations are common in a merger. The share is also listed in Frankfurt. Due to the tight market, please only buy in a strictly limited way.

    Nordex - Was this the sell-off?

    Audible jubilation was heard yesterday by all Nordex fans. The ticker indicates a plus of approximately 4,5% for the share at EUR 14,56. Does this mean that the way up is now clear, or should investors carry out another operational review?

    Nordex is in itself an election winner, as the red-green majority has signaled that investment in renewable energies will continue throughout the entire legislative period. For Nordex, this means a good tailwind for the order situation and, at the same time, pressure to deliver within reasonable times. That has become a problem given the supply situation with critical metals such as copper and rare earths. The Rostock-based company recently reported an order for a 54 megawatt (MW) wind energy project from Ukraine. The order was placed at the end of September 2021.

    After months of sell-off and the manifested downward trend, finally a sign of light in the price movement. Chart technicians, however, do not yet see a significant breakout because the 200-day line is still a considerable distance away at EUR 18.5. Nevertheless, the share is suitable for a speculative recovery trade with a price target of EUR 18.5. The battle of the bulls and bears should be decided quite quickly in the next few days. Set a tight stop at EUR 13.20 for new purchases. Long-term positions remain worth holding.

    The commodity sector currently determines the margins in the industrial business. Manufacturers like Varta and Nordex are challenged here in their purchasing policy. The junior explorer, Sierra Grande Minerals, can explore its property in peace. If there are industrial deposits in sufficient quantities, things will undoubtedly take off soon at this low level.

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    Der Autor

    André Will-Laudien

    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.

    About the author

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