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Fisker Displays Solid Cost Control in 3Q 2021 Results, A Rarity Among Start-Up Electric Vehicle Manufacturers

On November 3, Fisker Inc. (NYSE: FSR) reported 3Q 2021 results. While the company’s cash burn rate increased in the quarter, we
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This article was originally published by The Deep Dive

On November 3, Fisker Inc. (NYSE: FSR) reported 3Q 2021 results. While the company’s cash burn rate increased in the quarter, we consider the release to be generally constructive for three main reasons.

First, during the quarter, Fisker reached a long-term battery supply accord with China-based Contemporary Amperex Technology Co., Limited (CATL), the world’s largest lithium battery manufacturer. The base battery pack will be a lithium iron phosphate, or LFP, battery. Generally, LFP batteries are cheaper, have better aging and cycle-life characteristics, and are more environmentally friendly (no cobalt) than other batteries. On the other hand, LFP batteries are not as energy dense (e.g., not as powerful) as lithium-nickel-manganese-cobalt-oxide (NMC) designs.

Second, Fisker affirmed that production on its all-electric flagship Ocean SUV will commence in November 2022. The company hopes to reach a monthly production rate of 5,000+ vehicles during 2023. Fisker plans to provide more details and kick off its marketing activities on the Ocean SUV at the Los Angeles Auto Show on November 17, which has a reasonable base price of US$37,499.

As of November 2, reservations for the Ocean have grown to around 18,600 (net of cancellations) from about 2,500 a year ago. Reservations cost US$250 and are refundable, net of a 10% restocking fee.

Date SUV Reservations Comment
2-Nov-21 18,600 Includes 1,400 fleet reservations
2-Aug-21 ~17,500 Includes 1,400 fleet reservations
17-May-21 16,000
25-Feb-21 12,467
October 2020 ~2,500

Third and perhaps most importantly, Fisker represented the first start-up electric vehicle (EV) manufacturer in memory not to increase its estimated full-year 2021 cash burn projection when it reported a quarterly result. The company continues to estimate a US$490 – US$530 million deficit this year, although the company shifted more dollars toward operating expenses and away from capital expenditures.

Fisker’s 3Q 2021 cash flow shortfall increased dramatically from 2Q 2021, reaching US$119 million.  Based on the company’s projections, total cash burn should jump again in 4Q 2021 to US$150-US$190 million.

Quarterly Cash Burn Rate (in thousands of US $) September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020
Net Cash Used in Operating Activities ($103,450) ($28,117) ($28,810) ($30,064)
Capital Expenditures ($15,838) ($325) ($65,665) ($453)
Total Cash Burn ($119,288) ($28,442) ($94,475) ($30,517)

As of September 30, 2021, Fisker’s cash balance was US$1.4 billion, up dramatically from US$962 million on June 30, 2021. In August, the company raised US$667.5 million from the sale of 2.5% convertible notes (due in 2026). Fisker’s cash position equals about 25% of its stock market capitalization. 

(in thousands of US $, except for shares outstanding) September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020
Operating Income ($109,565) ($53,140) ($33,098) ($31,306)
Operating Cash Flow ($103,450) ($28,117) ($28,810) ($30,064)
Cash – Period End $1,400,411 $962,366 $985,422 $991,158
Debt – Period End $678,983 $20,206 $2,448 $2,567
Shares Outstanding (Millions) ~298.0 ~298.0 293.6 277.3

If Fisker were to encounter difficulties in reaching its fall 2022 target of commencing Ocean SUV production, Fisker’s shares could be negatively affected. In addition, investors currently are quite enthusiastic about electric vehicles (EVs) as an investment theme. If that attitude were to change, Fisker’s stock could likewise suffer. 

Fisker is well positioned versus its start-up EV peers. It has controlled its costs better than those companies and it has a very strong balance sheet. In addition, Fisker may gain increasing attention from the media in mid-November when it releases more information about the Ocean SUV at the Los Angeles Auto Show. 

Fisker Inc. last traded on the NYSE at US$19.08. 


Information for this briefing was found via Edgar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

The post Fisker Displays Solid Cost Control in 3Q 2021 Results, A Rarity Among Start-Up Electric Vehicle Manufacturers appeared first on the deep dive.





Author: Jim McFadden

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Monsters of Rock: Good news continues to flow if you’re in lithium

The news continues to get brighter for lithium producers and up and comers trying to ride the same wave. Benchmark … Read More
The post Monsters of Rock:…

The news continues to get brighter for lithium producers and up and comers trying to ride the same wave.

Benchmark Mineral Intelligence data from November shows spodumene prices continued to climb, rising 17.3% month on month in November to an average of US$1525/t FOB Australia.

That’s 301.3% up in just 12 months and more than 290% higher year on year.

Prices are so far beyond levels of just a year ago (in around the US$400/t mark) that US$1250/t is now the low point of recorded sales, which ranged as high as US$1800/t.

Starving battery manufacturers are paying as much as US$32,000/t to get their hands on uncontracted lithium hydroxide chemicals, with prices up 5.4% MoM and 92.1% YoY to US$19,500/t FOB North America and prices in China averaging $30,300/t, up 2.1%.

The inflection on these index charts is so hectic it looks like a goddamn cobra about to strike.

Pic: Benchmark Mineral Intelligence

On a weighted average basis hydroxide prices were up 6.2% to US$25,894/t, while carbonate prices are up 2.8% to US$23,798/t.

BMI analyst George Miller said the supply-demand situation left producers very much in control during contracting season.

“Activity in the domestic Chinese lithium chemical market picked back up in the latter half of November, as buyers looked to restock inventories ahead of the Spring Festival. The increased demand drove upward price pressure as trading gained pace following a quiet period at the end of October and during early November,” he said.

“Outside of China, prices also continued to rise during the ongoing contracting season, as buyers became increasingly willing to accept higher prices to secure any available lithium supply towards the end of 2021 and into 2022.

“Furthermore, producers sought to introduce more regular pricing breaks in contract structures given the potential upside on the back of supply deficit expectations, lifting the bottom end of prices as contracts begun to be revised higher amidst ongoing negotiations.

“The upper end of the range of recorded prices also ticked upwards, with lower volume spot transactions shifting towards Chinese domestic prices in response to very limited availability.

“As such, the Benchmark Lithium Price Index rose by 4.4% m-o-m in November, which alongside rising demand, was driven by expectations of a widening supply deficit into the New Year and continued international demand growth in Q4 2021. High prices and robust demand gave way to a stream of investments into the lithium value chain in November, in particular, Chinese incumbents striking deals with western companies in pursuit of supply expansions.”

China, which is increasing its production of lithium-iron-phosphate battery chemistries, has imported almost 70,000t of lithium carbonate this year, 80.8% up on the same period in 2020, while European demand for EVs remains high.

Sales were up 91.1% year on year to 180,000 units.

 

Lithium mid-tiers rule the roost

With that in mind it was lithium project developers that dominated the gains in the materials sector today.

AVZ Minerals (ASX:AVZ), owner of the giant Manono project in the DRC was up 14.16% after a big feature Q & A in Stockhead’s morning newsletter, while Vulcan Energy (ASX:VUL) rose 6.23% and Ioneer (ASX:INR) climbed 7.83%.

Among the large caps oil and gas stocks Woodside and Santos were up after Oil Search shareholders approved their mega merger with the latter to create a $23 billion energy major.

 

 

Lithium stocks share price today:

 

The post Monsters of Rock: Good news continues to flow if you’re in lithium appeared first on Stockhead.



Author: Josh Chiat

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Resources Top 5: Hopeful uranium stocks, an important graphite deal, and lots of imminent news flow

Aspiring graphite miner Black Rock invited to finalise agreement with Tanzanian government Cauldron Energy dusts off Yanrey uranium project, despite ……

  • Aspiring graphite miner Black Rock invited to finalise agreement with Tanzanian government
  • Cauldron Energy dusts off Yanrey uranium project, despite government opposition
  • Redstone (copper, cobalt), Latrobe (magnesium) and Empire (gold, copper, nickel, PGEs) up on no news

Here are the biggest small cap resources winners in early trade, Tuesday December 7.

 

CAULDRON ENERGY (ASX:CXU)

(Up on no news)

When the WA state government implemented a ban on most new uranium mines in 2017, CXU stopped work at its flagship ‘Yanrey’ uranium project and began searching for other dirt to play with.

It now has a historic gold project called ‘Blackwood’ in Victoria and a silica sands play called ‘Ashburton’ in WA. It is also poking around Yanrey again, which is a lot more interesting now that uranium prices are on the move.

While government support (or lack thereof) for new mines has not changed, a recent survey uncovered a bunch of “highly prospective targets for follow-up drilling” at Yanrey.

“Our ultimate objective is to explore for uranium mineralisation amenable to extraction by ISR,” CXU exec chairman Simon Youds says.

“Economic deposits of sandstone-hosted, palaeochannel-style uranium can be mined using ISR in the lowest cost quartile of uranium mined globally.”

“This characteristic makes these deposits extremely attractive for mining at any uranium price and necessarily must form the basis of any uranium resource portfolio.”

Yanrey exists within a larger uranium province that is slowly being uncovered, Youds says.

“There is potential here for a scale comparable to the best uranium-endowed province globally and that, with astute leadership, Western Australia is at the threshold of a new energy resources boom.”

At Blackwood, CXU has stumbled upon visible gold in an underground area historically excavated for access purposes only:

“The visible gold observed, coupled with the beautiful sandstone-shale contact and structurally complex geology, provides an exciting new target for drill testing,” Youds said in November.

“The observation of visible gold further increases our confidence in the remaining mineral potential of these historical mines.”

The $11.5m market cap stock is down 6% over the past month, and 30% year-to-date. It had $1.5m in the bank at the end of September.


 

REDSTONE RESOURCES (ASX:RDS)

(Up on no news)

The nanocap, which has partially bounced back from recent losses in early trade Tuesday, is drilling to grow the 38,000t copper, 535t cobalt ‘Tollu Copper Vein’ deposit, part of the ‘West Musgrave’ project in WA.

Tollu hosts “a giant swarm of hydrothermal copper rich veins” in a mineralised system covering a +5sqkm area, ~40km from OZ Minerals’ (ASX:OZL) world-class Nebo-Babel nickel-copper deposit.

A conceptual (theoretical, not real yet) exploration target suggests up to 627,000t of copper may be present, the company says.

Recent portable XRF analysis of new drilling returned hits like 16m at 2.62% copper from a 74m downhole, including 6m at 6% copper from 76m.

These will be confirmed by traditional assay, the company says. Labs are backed up to the hilt, so who knows when that will be.

RDS say exploration will continue “at the earliest opportunity” in 2022 with a deeper RC drilling program at priority targets.

The $12m market cap stock is up 30% over the past month. It had $2.6m in the bank at the end of the September quarter.

 

BLACK ROCK MINING (ASX:BKT)

It’s been a good news week for aspiring graphite miner BKT.

Today it announced it had been invited by the Mining Commission to attend a ceremony in Dar es Salaam, Tanzania on Monday 13 December “to finalise an agreement with the Government of Tanzania”.

Black Rock managing director John de Vries is currently in country and is expected to attend, BKT says.

The company has also just completed a massive 500t pilot plant run – the largest ever, it says — to send off for qualification (testing) to potential customers in North America, Asia and Europe.

This will ultimately support project financing, BKT says.

The company now needs to finalise off-take terms with cornerstone investor POSCO, and secure finance to underpin a $US116m Phase 1 development capex program.

The $183m market cap stock is down 10% over the past month, and up 115% year-to-date. It had $9.3m in the bank at the end of September.

 

LATROBE MAGNESIUM (ASX:LMG)

(Up on no news)

Early works – like fixing fences, site clean-up, contracting — are happening apace at LMG’s magnesium project in Victoria’s Latrobe Valley, with construction on an initial 1,000 tonne per annum magnesium plant due to kick off in Q1 2022.

Production starts up to 12 months later in Q4 2022.

The plant will be expanded to 10,000 tonnes per annum magnesium shortly thereafter, with further plant capacity expansion to be considered once it is operating successfully.

Magnesium has the best strength-to-weight ratio of all common structural metals and is increasingly used in the manufacture of car parts, laptop computers, mobile phones, and power tools.

In November, LMG said current magnesium price was US$6,150 per metric tonne and expected to hold.

“LMG’s revenue estimates are based upon US$3,250 per tonne which was the magnesium price in June 2021, before the China supply shortage commenced in September 2021,” it says.

“If the current price of US$6,150 per metric tonne held long term, it would increase LMG’s estimate of EBITDA for its 10,000tpa plant by some $56m.”

In 2020, world magnesium production was ~1 million tonnes, of which China supplied ~85%.  China has begun a 13-year plan to increase Mg in cars from 8.6kg to 45kg by 2030, requiring an additional 1 million tonnes of new Mg production per annum.

$131m market cap LMG is down 21% over the past month, and up 335% year-to-date. It has raised $11.5m  via placement to help fund the initial $39m 1,000tpa plant.

 

EMPIRE RESOURCES (ASX:ERL)

(Up on no news)

This busy polymetallic explorer has already drilled 13,000m so far in 2021 at the ‘Penny’s and Yuinmery’ projects in WA, with diamond drilling of some juicy gold, copper, and nickel-copper-PGE targets at Yuinmery due to kick off sometime this month.

ERL would’ve drilled even more if not for issues getting hold of a rig, something the company intends to fix in 2022.

“Our exploration plans for 2022 include the lock-in of a core drilling rig and driller for exclusive use by Empire,” chairman Michael Ruane says.

“This should assist in accelerating at least the drilling component of our exploration programs for the forthcoming period. The rig will be particularly useful for the deep drilling required for the promising Yuinmery targets (eg Smiths Well/YT01).”

The rig should be ready for commissioning this month, he says.

The $14.85m market cap stock is up 30% over the past month. It had about $3.5m in the bank at the end of November.


The post Resources Top 5: Hopeful uranium stocks, an important graphite deal, and lots of imminent news flow appeared first on Stockhead.







Author: Reuben Adams

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Energy & Critical Metals

Met testwork proves Sovereign’s Kasiya will deliver a premium natural rutile product

Special Report: Metallurgical testwork has confirmed Sovereign Metals’ Kasiya project in Malawi will deliver a premium natural rutile product, setting…

Metallurgical testwork has confirmed Sovereign Metals’ Kasiya project in Malawi will deliver a premium natural rutile product, setting the stage for the company’s landmark scoping study.

Testwork continues to demonstrate the world class nature of Sovereign’s (ASX:SVM) Kasiya deposit, with simple and conventional processing delivering levels of 95% to 97.2% TiO2 with low impurities at stand-out metallurgical recoveries ranging from 94% to 100%.

That makes Kasiya competitive on TiO2 grades with some of the world’s largest natural rutile operations like Iluka’s Sierra Rutile and Rio Tinto’s Richards Bay Minerals.

It opens the door for discussions with tier-1 offtakers in the markets for TiO2 pigment, titanium metal and welding, where customers are facing widening supply deficits in a strengthening market.

Additionally, testwork has shown conventional flotation methods can be used to produce a coarse flake graphite by-product from rutile gravity tails with 60% at a coarseness of +150µm, suggesting it will have a high basket value when sold to market.

A program at SGS Lakefield in Canada confirmed simple processing methods delivered a very coarse-flake graphite concentrate at 96.3% TGC.

“Consistently achieving premium rutile specifications with stand-out recoveries via conventional “off the shelf” processing methods reinforces the robustness of metallurgical and processing performance of the Kasiya rutile mineralisation ahead of the upcoming Scoping Study,” Sovereign managing director Dr Julian Stephens said.

“These continued very high-quality product specifications should generate further interest from end-users across the titanium sector as the global structural deficit in natural rutile supply continues to widen.”

Processed rutile being despatched to potential customers. Pic: Sovereign Metals

Kasiya scoping study round the corner

With the results in today’s announcement, Sovereign has now demonstrated the impressive metallurgical qualities of the Kasiya resource in two separate rounds of met testwork.

The testwork also confirms Kasiya will deliver strong recoveries and product specifications based on conventional off-the-shelf processing technology, which bodes well for its future development.

Proving the original results were certainly no fluke and opening the door to interest from Tier-1 offtake customers, they set up Sovereign to release a scoping study in the coming weeks.

With most of the technical disciplines now complete, mining optimisation and capital and operating cost estimations are currently being finalised.

A new indicated mineral resource estimate is also on the way after substantial resource drilling to build upon the world-class inferred resource released in June.

That confirmed Kasiya as one of the largest natural rutile deposits in the world, with an inferred resource of 644Mt at 1.01% rutile and a high-grade component of 137Mt at 1.41% rutile.

 


 

 

This article was developed in collaboration with Sovereign Metals, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

The post Met testwork proves Sovereign’s Kasiya will deliver a premium natural rutile product appeared first on Stockhead.



Author: Special Report

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