September 6th, 2022 | 10:43 CEST
XPeng, Infinity Stone Ventures, Rock Tech Lithium - Enormous growth potential
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"[...] In 2020, the die is finally cast in the automotive industry towards electromobility. [...]" Dirk Harbecke, Executive Chairman, Rock Tech Lithium Inc.
Rock Tech Lithium - When will the knot burst?
In the past few weeks, the German-Canadian GreenTech company Rock Tech Lithium has been in a state of flux, and many investors have wondered why the share price is moving further south from day to day. With CAD 3.30, a new annual low was now even marked. From a chart perspective, the next minor support is at CAD 3.00. If this level is broken, a further sell-off toward CAD 2.20 would be quite possible.
The sharp drop in the share price is probably due to the recent capital measure, which brought the Company around CAD 50 million for further expansion. According to the Company, most of the proceeds will be used to construct the planned lithium hydroxide converter plant in Guben, Brandenburg, and to develop the Georgia Lake lithium mine in Canada. The Company will issue a total of 11,349,743 units for aggregate proceeds of approximately CAD 39.7 million at a price of CAD 3.50 per unit. Each unit will consist of one common share in the capital of Rock Tech and one-half of one common share purchase warrant. Each warrant will entitle the holder to purchase one common share for a period of 36 months from the date of issuance of the warrant at an exercise price of CAD 4.50.
In connection with the underwritten offering, the Company will complete a non-brokered private placement of units for an aggregate amount of not less than CAD 9,037,500 pursuant to subscription agreements to be entered into directly between Rock Tech and the purchasers, all of whom shall be existing shareholders of Rock Tech.
The subscription of the warrants is likely to be used by some resourceful investors to conduct an arbitrage trade and sell portions of their shares. That may further burden the share price in the short term, but in the long term, the development of Rock Tech Lithium with the cooperations with Mercedes-Benz and ThyssenKrupp Materials Trading, among others, should go in the right direction. Thus, history could repeat itself as it did at the end of 2020. Back then, the share exploded from around CAD 1.00 to CAD 9.00 within days. The current stock market value of the Company is CAD 245.76 million.
Infinity Stone Ventures - Critical energy metals from a single source
In contrast to Rock Tech Lithium, Infinity Stone's market capitalization of CAD 26.58 million is just one-tenth. However, the Vancouver, Canada-based company is diversified and aims to serve the demand of battery and wind turbine manufacturers and nuclear and hydrogen producers by acquiring 100% interests in critical mineral deposits in stable, mining-friendly jurisdictions located near end users in North American production centers in mining-friendly Ontario and Quebec.
As such, Infinity Stone's diversified portfolio includes several properties that are 100% owned by the Company and have critical commodities such as graphite, lithium, copper, manganese nickel and cobalt. Extensive exploration programs on three core projects are planned for fall 2022.
The latest achievement is the acquisition of an option to 100% ownership of the 923-hectare Taiga Lithium Project. The prospective deposit is located 3.4 km west of Infinity Stone's Camaro property and is directly adjacent to Patriot Battery Metals' Corvette property. The neighbor has recently reported excellent exploration results on its property, with 31 spodumene-bearing pegmatite outcrops, including 20 outcrops estimated to contain more than 5% spodumene.
Thus, the experienced management is confident that similar potentials are emerging at the Taiga project. Infinity Stone's Executive Chairman, Michael Townsend, commented: "The Taiga Lithium Project is strategically located with previously mapped pegmatites that have significant discovery potential given recent developments by other regional operators. It is evident from the regional mapping that there is high potential for additional pegmatites on the project."
XPeng - Weak August figures
Electromobility is considered a key technology in the transformation of the transport sector. In 2021 alone, the number of new registrations and the market share of battery-powered vehicles more than doubled. Sales growth was led by the People's Republic of China, which accounted for more than half, with 3.3 million vehicles. In terms of market share, BYD has enjoyed its place in the sun by a wide margin since the middle of the year, followed by Tesla and the unlisted company SAIC-GM-Wuling. Following far behind are Geely, Li Auto, XPeng, and NIO. With the August sales figures, BYD was able to post a new sales record of 174,915 units, corresponding to an increase of around 185% compared to the same period last year. In comparison, Chinese manufacturer XPeng is still in the growth phase with 9,578 electric SUVs. Compared to August 2021, the increase was 33%, but compared to the previous month, when about 11,524 cars were sold, the Company has suffered a significant drop in sales.
In the future, XPeng plans to develop new markets in addition to the domestic market. The declared goal is for half of sales to come from overseas markets in 2025. The Guangzhou-based automaker, which went public in Hong Kong and New York in 2020, plans to expand further into Europe. From a price point of view, the share just had to accept the marking of a new all-time low.
E-mobility is still in its infancy and is expected to grow exponentially in the next few years due to climate regulations. XPeng is planning to enter Europe to open up another market. Existential to building batteries is the critical metal lithium. Thus, GreenTech companies Rock Tech Lithium and Infinity Stone Ventures will likely benefit from the scarcity in the long run.
Conflict of interest
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