A good time to be in battery metals and ... ASX rises
Published 28-MAY-2021 16:38 P.M.
4 minute read
Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.
In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.
The below articles were written under our previous business model. We have kept these articles online here for your reference.
Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.
Click Here to View Latest Articles
A couple of battery stocks rode the wave of big media this week.
Vulcan Resources (ASX: VUL)’s association with billionaire John Hancock continues to gain attention, while news that China was, as reported by The Wall St Journal, “tightening its grip on the global supply of processed manganese, rattling a range of companies world-wide that depend on the versatile metal—including the planet’s biggest electric-vehicle makers”, gave Euro Manganese (ASX: EMN) a boost.
Both companies had their own announcements. However, related media never fails to make an impact.
EMN rose from 49.5 cents at close of business on Monday to 52 cents by the end of the week, while VUL went from $6.80 to $7.76.
VUL boasts Europe’s largest JORC lithium resource, is located in the heart of Europe’s auto & EV battery industry in Germany – the fastest growing lithium market in the world and has the EU’s backing, has diversified revenue streams and has one of the world’s most rapidly advancing lithium projects.
VUL received great coverage from the Australian Financial (AFR) Review, which reported on fellow early stage VUL investor John Hancock’s admission that he is currently buying more VUL on market.
You can read the AFR article below. Note, this is front page news:
This week, VUL also announced that it had achieved 90% recovery rate on its recently operating direct lithium extraction (DLE) pilot plant.
This is a key step towards large scale production and will provide key data and proof for the company’s definitive feasibility study.
Most importantly, VUL will be able to produce lithium samples for potential offtake partners.
VUL is aiming to become the world’s first lithium producer with net zero greenhouse gas emissions and its latest results push it one step closer to achieving this goal.
For more information read: VUL Achieves Target 90% Lithium Extraction while Billionaires Buying on Market
Could action in China benefit EMN?
EMN is developing a Green and European source of ultra-high purity manganese for Electric Vehicle batteries developed from the recycling of a tailings deposit located in the Czech Republic.
While not directly in the news, EMN could indirectly benefit from reports by major media organisations.
The Wall Street Journal published a story last weekend which could have implications for the company.
The Wall Street Journal article goes on to show the European Manganese price has almost doubled in the past few months, and continues to trend upwards.
We think The Wall Street Journal’s story will be a positive for the multiple offtake agreement discussions that EMN reported in their announcement this week.
EMN provided an update on important prerequisites leading up to the development of its proposed Chvaletice Manganese Project.
Notably, detailed design of the Chvaletice Manganese Project’s Demonstration Plant (DP) by the Changsha Research Institute for Mining and Metallurgy is progressing well, with 97% of equipment ordered and fabrication about to begin. The demonstration plant consists of six interconnected modules that will replicate the entire HPM production process to be used in the commercial operation of the project.
Finally, EMN”s Definitive Feasibility Study (DFS) will get us an updated look at EMN’s project economics. This is on track for completion in Q1 of 2022.
Read more: ASX: EMN Releases Operations Update as Global Manganese Supply Tightens
The best and worst performing sectors this week
The best performer this week was Information Technology up over 3 per cent followed by Communication Services and Consumer Discretionary both up over 2 per cent. The worst performing sectors include Utilities down over 1 per cent with Materials, Industrials and Consumer Staples all just in the red so far for the week.
The best performers in the ASX/S&P top 100 stocks include ALS up over 10 per cent followed by REA Group and Carsales.com, which are both up over 8 per cent. The worst performing stocks include Fisher & Paykel down over 10 per cent, while Worley and Oz Minerals are both down over 5 per cent.
What's next for the Australian share market?
Wealth Within’s Dale Gillham tells us, “The Australian stock market has risen around 2.5 per cent over the past six days to achieve its highest close in two weeks. On five of those days, the market closed higher than it opened, which is normally a good sign, however, this is where the good news ends as I believe the Australian market will most likely start to fall away again.
“While it is possible for the market to continue to rise, my expectation is that the All-Ordinaries Index will start to experience some volatility over the coming few weeks with the market trending down. Therefore, as I mentioned in my previous report, I expect the market will continue to fall over the coming weeks to 6,600 points and possibly lower.
“And as a word of caution, while technology stocks have been more bullish in the last couple of weeks as investors jump in with the expectation of gaining a bargain, I believe these stock will fall away again, therefore, I urge investors to be careful.”
General Information Only
S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.
Conflicts of Interest Notice
S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.
Publication Notice and Disclaimer
The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.
Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.
This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.