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AVZ Minerals signs important deal with CATH

 
AVZ Minerals (AVZ.AX) can look forward to an US$240M cheque from CATH, a private investment entity owned by Pei Zhenhua and CATL, a large lithium conversion…

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This article was originally published by Caesars Report

AVZ Minerals (AVZ.AX) can look forward to an US$240M cheque from CATH, a private investment entity owned by Pei Zhenhua and CATL, a large lithium conversion company. CATCH is acquiring a 24% stake in the holding company owning AVZ’s flagship Manono Lithium and Tin project in the DRC and will be required to make pro rata contributions towards the development and construction of the Manono project. The DRC government retains a 10% free carried interest in the project, so we are assuming CATH is acquiring a 24% interest in the subsidiary that has the right to own 90% of the project, for an effective economic interest of 21.6% in the project.

The cash injection will also make it easier to investigate the potential expansion of the throughput at Manono. The original plan called for a throughput of 4.5 million tonnes per year which would result in the production of 0.7 million tonnes of SC6 (spodumene, a lithium concentrate with an average grade of 6% Lithium) but the company is now investigating the potential to construct a plant with a throughput of 10 million tonnes per year for a total production of 1.6 million tonnes of spodumene per year. The increased throughput would mean both CATH and the existing offtake partner could be accommodated.

Manono is a very large project as the total resource contains 401 million tonnes at an average grade of 1.65% Li2O and just over 1.5 pounds of tin per tonne of rock. Under the updated 10 million tonnes per annum throughput scenario, the mine life would still be a few decades and even based on the 132 million tonnes in the reserve category, the initial mine life based on the reserves would be around 13 years.

While the DRC still is a risky jurisdiction, having Chinese capital entering the picture will likely help AVZ. The price paid by CATH seems to be very fair and perhaps this is a first step towards full ownership as CATL, a partial owner of CATH, recently announced the acquisition of Millennial Lithium (ML.V) to secure its lithium supply chain.


Disclosure: The author has no position in AVZ Minerals. Please read our disclaimer.


Author: CR Team

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Energy & Critical Metals

A $57 Price Target Could Be Just the Beginning for Xpeng

Let’s be honest. Not every investor loves Chinese companies and stocks right now. Perhaps some investors saw what happened to ride-hailing giant Didi…

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Let’s be honest. Not every investor loves Chinese companies and stocks right now. Perhaps some investors saw what happened to ride-hailing giant Didi Global (NYSE:DIDI). As a result, maybe they’re afraid to take a position in China-based electric vehicle (EV) maker Xpeng (NYSE:XPEV) because XPEV stock might also tank.

Source: Johnnie Rik / Shutterstock.com

Yet let’s not make generalizations. Granted, the Chinese government has been cracking down on some companies, mainly due to cybersecurity and antitrust concerns.

But not every China-based company is in trouble. Moreover, XPEV stock won’t necessarily meet the same fate as Didi and other Chinese stocks.

Indeed, recently issued statistics indicate that Xpeng is firing on all cylinders. Besides, one prominent analyst is bracing for its shares to climb, and his bullish argument is convincing.

A Closer Look at XPEV Stock

The shares did have their time in the sun, back in November 2020. At that time, the share price rocketed from $20 to a peak of $74.49.

Unfortunately, folks who chased the stock in the mid-$70’s were soon punished for their haste. As it turned out, a nasty crash ensued in late 2020 and persisted throughout the first few months of 2021.

Since the summer, XPEV stock has been rangebound and can’t seem to break above $45. There’s an old saying, though: the longer the base, the higher in space. In other words, prolonged sideways periods can sometimes be the launch pad for a major breakout.

So don’t be discouraged by the lateral movement of XPEV stock. A big move could be just around the corner – and it would be a shame if you don’t have a position in the stock when it happens.

No One Can Argue With These Results

Stocks will always have their doubters and naysayers, especially when it comes to Chinese companies nowadays. However, the skeptics would be hard-pressed to argue with the numbers included in Xpeng’s recently published vehicle delivery update.

Seriously, the company just killed it across the board. For one thing, Xpeng posted 10,412 deliveries in September, marking the company’s highest-ever monthly delivery figure.

Along with passing the 10,000 milestone, that number also represents a 199% year-over-year surge and a 44% increase over the previous month.

Do you need more ammo that supports the bull thesis? Here you go: for Q3, Xpeng achieved a quarterly record of 25,666 deliveries. That amounted to a 48% increase versus Q2, as well as a 199% YOY improvement.

But wait; it gets even better when we extend the timeline. In the first nine months of the year, Xpeng delivered a total of 56,404 vehicles, which represents a whopping YOY increase of 300%.

Bear in mind, this occurred during a semiconductor shortage, as well as the Chinese government’s crackdown on multiple industries.

Yu Said It

Even with those delivery stats in mind, some folks will still be nervous about Xpeng because Chinese stocks have taken a beating this year. To help assuage their fears, I’ll refer the skeptics to Deutsche Bank’s Edison Yu.

While acknowledging that there have been several reasons for the underperformance of Chinese stocks, Yu asserts that the “largest overhang” has been investors’ reluctance to commit to the nation’s equities following the Chinese authorities’ crackdown on Didi.

I tend to concur with Yu’s reasoning. Looking ahead, Yu believes that “sentiment {towards Chinese EV stocks)  could be bottoming going into year-end.” That, of course, should be beneficial to Xpeng and its shareholders.

Furthermore, for Q4, Yu believes that Xpeng’s delivery guidance in the 35,000 to 40,000 range, and he predicts that the company will deliver 15,000 vehicles in December.

Those estimates are realistic, and would bring Xpeng’s full-year volume to almost 94,000 deliveries, representing a 247% YOY increase. Yu raised his price target on XPEV stock from $51 to an even more ambitious $57.

The Bottom Line

I like the sound of $57, but long-term investors can aim even higher than that if they truly believe in the company. And why wouldn’t they? Just look at those delivery numbers and the surges in the automaker’s deliveries.

They’re outstanding and suggest that XPEV stock deserves to be much higher.

So if you own the stock, just be patient and be prepared for a spectacular ending to Xpeng’s  record-breaking year.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

The post A $57 Price Target Could Be Just the Beginning for Xpeng appeared first on InvestorPlace.

Author: David Moadel

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Energy & Critical Metals

Neo Lithium Reports US$1.13 Billion After-Tax NPV For Tres Quebradas

Neo Lithium Corp. (TSXV: NLC) shared on Tuesday the results of its feasibility study for the production of lithium carbonate at
The post Neo Lithium Reports…

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Neo Lithium Corp. (TSXV: NLC) shared on Tuesday the results of its feasibility study for the production of lithium carbonate at its Tres Quebradas lithium brine project in Catamarca Province, Argentina. The results highlighted US$1.13 billion after-tax NPV8%.

Compared to the previous pre-feasibility study, the results of the feasibility study show mine life extends to 50 years from 35 years. After-tax IRR is expected to be at 39.5% and the payback period is expected to be after 2.25 years from the start of the production.

The property is estimated to have an annual average production of 20,000 lithium carbonate tonnes. Furthermore, the property is expected to incur cash operating costs of US$2,954 per lithium carbonate tonne.

On capital costs, the property’s initial spending came to US$370.5 million, and sustaining capital spending is expected to be US$143.5 million for the life of mine.

The study also reported measured & indicated resources of 1.75 million tonnes of lithium carbonate at 800 mg/L cut-off and 5.37 million tonnes of lithium carbonate at 400 mg/L cut-off.

Proven and probable reserves for the property are reported to be 0.77 million tonnes of lithium carbonate equivalent for the first 20 years of production and 1.67 million tonnes of lithium carbonate equivalent for the life of mine.

Earlier this month, the mining firm announced that it will be acquired by Chinese mining company Zijin Mining Group Co. in a $960 million all-cash deal.

Neo Lithium last traded at $6.26 on the TSX Venture.


Information for this briefing was found via Sedar 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 Neo Lithium Reports US$1.13 Billion After-Tax NPV For Tres Quebradas appeared first on the deep dive.




Author: ER Velasco

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Energy & Critical Metals

United Lithium Achieves 99.1% Pure Lithium From Spodumene Concentrate

United Lithium (CSE: ULTH) this morning posted further results from testwork being conducted to produce lithium carbonate, also known as
The post United…

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United Lithium (CSE: ULTH) this morning posted further results from testwork being conducted to produce lithium carbonate, also known as Li2CO3. The technical grade of the lithium carbonate, as well as the recovery of Li2O is said to be excellent. The results follow the successful testing of proprietary floatation tech.

The lithium carbonate under the test process was produced from spodumene concentrate, with the testing producing a final product with a purity of 99.1%. Lithium rich pegmatite was sourced for the program from Canada, with spodumene specifically selected due to it being classified as the “most important commercial lithium mineral due to its high Li content and favourable processing characteristics.” The processes of calcination, acid roasting, and water leaching were used to produce the lithium carbonate from the spodumene.

Following the successful tests, the company is now proceeding to test for the product of lithium hydroxide from the spodumene concentrate. Pilot plant testing meanwhile will begin in early 2022, which will test lithium rich feed materials. The results of such testing will then be utilized for an economic assessment for the viability of producing lithium from both spodumene and petalite feed.

“Test work to date has demonstrated that it is possible to modify traditional processes and shortcut lithium carbonate production using innovative out of the box thinking. United Lithium aims to commercialize a sustainable and robust process flow sheet for lithium concentrate production, high grade lithium carbonate and potentially high purity battery grade lithium hydroxide, with the ability to accommodate multiple feed materials with minimal modifications,” said CEO Michael Dehn on the development.

United Lithium last traded at $0.70 on the CSE.


FULL DISCLOSURE: United Lithium is a client of Canacom Group, the parent company of The Deep Dive. The author has been compensated to cover United Lithium on The Deep Dive, with The Deep Dive having full editorial control. Additionally, the author personally holds shares of the company. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.

The post United Lithium Achieves 99.1% Pure Lithium From Spodumene Concentrate appeared first on the deep dive.


Author: Jay Lutz

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