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Energy & Critical Metals

Lordstown Motors: Good Bargain or Falling Knife? Analyst Weighs In

Electric vehicle (EV) stocks have battled against market conditions in 2021, possibly none more so than Lordstown Motors (RIDE). The cash-strapped electric…

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Electric vehicle (EV) stocks have battled against market conditions in 2021, possibly none more so than Lordstown Motors (RIDE). The cash-strapped electric truck startup has endured a torrid time, having made it known it lacked sufficient funds to bring its truck, the Endurance, to market. As a result, investors have driven away, and shares have shed 74% of their value since the turn of the year.

The company’s latest actions to address the cash issues were behind another violent drop.

Lordstown has agreed to sell its Ohio plant to Hon Hai Technology (Foxconn), in a deal worth $230 million. Foxconn will also purchase RIDE stock worth $50 million at a price of $6.8983 per share. As shares were trading at $8.79 a piece last Friday’s open, investors evidently baulked at the arrangement, sending shares down 35% over the past three trading sessions.

Foxconn will now develop the Endurance under contract manufacturing, which will bring it a step closer to becoming a contract manufacturer for EV makers. The company has already signed on the dotted line to be Fisker’s vehicle assembler and probably has an eye on the Apple Car opportunity – for whom it already supplies iPhones.

And for Lordstown? As RBC analyst Joseph Spak notes, the company could use the “much needed cash infusion.”

“To us,” the analyst went on to say, “Given our view that the near-term unit opportunity for RIDE may be limited owing to competition, the move to not be vertically integrated and shift to a less capital intensive model helps.” Near-term liquidity should also get a boost, as the shift “reduced fixed capex to a more variable piece price model.”

Spak thinks RIDE should have enough cash to get to mid-2022, based on the $280 million generated from this transaction and the equity line of credit (ELOC). Working with Foxconn and leveraging their supply chain is a “positive,” but at the end of the day, RIDE will “need to sell Endurance vehicles.” With “competitive challenges” coming from both legacy auto makers and other startups, the company could ultimately have a hard time doing so.

Nevertheless, the shift to the new business model merits a price target raise and the figure moves to $5 from the prior $1 target. Spak, therefore, expects the share price to stay rang-bound in the coming months, given the share price currently stands at $5.2. There’s no change to Spak’s Underperform (i.e., Sell) rating. (To watch Spak’s track record, click here)

Overall, the Street’s view on RIDE presents a strange conundrum. On the one hand, based on a single Buy rating, 3 Holds and 3 Sells, the stock has a Moderate Sell consensus rating. However, the average price target of $6.67 represents possible upside of nearly 28%. It will be interesting to see whether the analysts upgrade their ratings or reduce price targets over the coming months. (See Lordstown stock analysis)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

The post Lordstown Motors: Good Bargain or Falling Knife? Analyst Weighs In appeared first on TipRanks Financial Blog.

Author: Marty Shtrubel

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Energy & Critical Metals

Burundi’s first grid-connected solar farm reaches commercial operation

A pioneering 7.5MW solar PV plant has reached commercial operation in Burundi, increasing the country’s generation capacity by over 10%.
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A pioneering 7.5MW solar PV plant has reached commercial operation in Burundi, increasing the country’s generation capacity by over 10%.

It’s the country’s first substantial energy generation project to go online in over three decades, supplying clean power to tens of thousands of homes and businesses.

The plant near the village of Mubuga supports international efforts to increase renewables and climate finance, especially for the world’s most vulnerable communities.

Have you read?
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UK Minister for Energy, Clean Growth and Climate Change, Greg Hands, said: “Today’s launch of Burundi’s first grid-connected solar farm will light up the nation’s energy system. It will strengthen the national grid supply and propel forward a promising future for the country in clean, green energy.

“Set to increase Burundi’s power generation capacity by 10%, this pioneering project, backed by UK government funding, is a fantastic example of countries working together ahead of COP26. Investing in a green future benefits the economy and the planet.”

The six-year process of building the solar plant was led by energy developer and independent power producer Gigawatt Global.

Financing for the construction of the project was provided via a consortium including pan-African private equity investor Inspired Evolution, the UK government-funded Renewable Energy Performance Platform (REPP – managed by Camco Clean Energy), and Gigawatt Global.

The construction loans are being refinanced by the US International Development Finance Corporation (DFC).

Additional support for the project was provided directly and indirectly from the Energy and Environment Partnership (EEP – a fund set up by Finland, the UK and Austria), the Belgian Investment Company for Developing Countries (BIO), Trinity International has advised the Gigawatt Global and Inspired Evolution equity teams since 2017. Engineering, procurement and construction services were provided by French firm Voltalia, and political risk re-insurance is provided by DFC.

Gigawatt and Voltalia Teams. Image credit: Gigawatt Global

Gigawatt Global CEO Josef Abramowitz said: “We thank our impact investors and strategic partners, as well as the Burundi government, for joining forces to accomplish this historic milestone on the road to climate justice and fulfilling many of the UN’s Sustainable Development Goals.”

Abramowitz, who was nominated by 12 African countries for the 2021 Nobel Peace Prize for his pioneering commitment to green energy access, continued: “Green energy projects that serve the most vulnerable communities should be prioritized by the international community.”

The Burundi field recently received the award for “Project of the Year” from EEP.

Gigawatt Global is also building a community centre powered by solar energy that will offer local access to productive use of electricity.

The centre will focus on community development through women’s empowerment and youth and employment programs, along with various educational components being developed with local and international NGOs.

The post Burundi’s first grid-connected solar farm reaches commercial operation appeared first on Power Engineering International.

Author: Pamela Largue

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Base Metals

Monsters of Rock: Lithium shares flush with positive sentiment to dominate the gains

Lithium miners were the kings, queens, jacks and aces of the bourse on an avalanche of positive news around the … Read More
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Lithium miners were the kings, queens, jacks and aces of the bourse on an avalanche of positive news around the sector.

The biggest trigger was probably the incredible rise in value for Tesla overnight, which soared beyond a US$1 trillion valuation on news Hertz would order US$4 billion worth of electric vehicles from the automaker.

As the leading electric vehicle maker in the western world, and with a big presence also in China and energy storage, Tesla is one of the biggest end users of lithium products globally.

Its boss Elon Musk, now the richest man ever, has a fair bit of sway on the market as well.

On top of that Pilbara Minerals (ASX:PLS), up 525% over the past 12 months since spodumene prices bottomed out at under US$400/t (it sold a batch for upwards of US$2000/t last month), gained 7.66% after formally announcing plans to develop a lithium chemical plant in a JV with South Korea’s POSCO.

Core Lithium (ASX:CXO) declared the start of construction on its Finniss Lithium Mine in the Northern Territory. That will be shipping concentrate from the end of 2022.

$550 million capped Neometals (ASX:NMT) was up 14% after announcing its battery recycling demonstration plant in Hilcenbach, Germany, had been fully commissioned.

The one time lithium miner is up 405% over the past year.

Vulcan Energy (ASX:VUL), Sayona (ASX:SYA), Liontown (ASX:LTR) and Orocobre (ASX:ORE) were among the lithium miners to dine out on the day’s news, while rare earths miner Lynas (ASX:LYC) was also up.

On the flippity flip, iron ore miners were weak with Fortescue (ASX:FMG) and Rio Tinto (ASX:RIO) cancelling out a gain from BHP (ASX:BHP), while Mineral Resources (ASX:MIN) cancelled out the gains it made with yesterday’s announcement the Wodgina lithium mine would be coming back online with news it ate a 48% price discount on iron ore sales in the September Quarter.

MinRes’ average realised prices fell from US$178/t to around US$78/t between the June and September Quarters.

The bright green is all lithium baby. Pic: Commsec

 

Base metals inventories falling, but can it be sustained?

Base metals were back up on Monday, with production cuts in energy starved China and Europe hitting primary supply.

Inventories held by the major exchanges are being chewed up.

While price moves among the miners was muted, nickel rose 3.2% to climb back over US$20,000/t overnight after hitting US$21,000/t briefly last week.

“Nickel rallied after Eramet disclosed a 19% drop in ferronickel production from its operations in New Caledonia,” ANZ analysts said in a note.

“The market is also showing signs of tightness, with cash contracts closing at their biggest premium to futures in two years. LME inventories are down nearly 50% since April.”

LME stockpiles for copper hit their lowest level since 1974 last week, but Commbank analyst Vivek Dhar says it is too early to say whether the market is as tight as it seems, or whether some traders are hoarding to capitalise on high prices.

The market is expected to be in a small deficit at the end of this year to a 328,000t surplus in 2022 on rising supply (about 1.3% of global demand).

Mined supply is expected to increase 2.1% this year and 3.9% in 2022, but Dhar warned copper miners had a history of underwhelming.

“The rising forecasts for copper mine production reflect 5 major copper projects due to arrive by the end of 2022,” Dhar said.

“That compares with just two major copper projects in the last 4 years.

“Given the track record of mine disruptions (i.e. labour strikes, power and water scarcity and geopolitics) and the decline in copper grades, elevated copper mine production growth forecasts don’t tend to last long.

“We think it’s worth considering that new mine supply may take longer than currently expected to hit the market.”

The post Monsters of Rock: Lithium shares flush with positive sentiment to dominate the gains appeared first on Stockhead.







Author: Josh Chiat

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Energy & Critical Metals

Chart of the Day: Plenty of immediate upside targets for Ionic Rare Earths

Let’s get into it. Iconic Rare Earthss (ASX:IXR) is a bullish set up from a technical perspective. It’s in an … Read More
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Let’s get into it.

Iconic Rare Earthss (ASX:IXR) is a bullish set up from a technical perspective.

It’s in an uptrend. The moving averages are sloping up.

It’s shown us that when it wants to the market can get a hold of it – as evidenced by the fierce run from 1.5c to 6c at the start of this year.

 

Chart of the Day: Ionic Rare Earths (ASX:IXR)

There are no immediate gaps on the chart to worry about that need to be filled.

The company surpassed 4c resistance yesterday on increasing volume, which was a positive sign. However, after touching 4.5c in intra-day trade, it has now settled back to close at 4.2c, leaving a daily selling candle.

That infers that a test of 3.8 – 4c may be on the cards.

In our view that would make attractive buying.

Given the negative response to the scoping study in late April, there are plenty of immediate upside targets, the most immediate being 4.7c, with further potential to those March highs above 6c.

Back the other way, and we don’t need to hold this below 3.5c.

The company is well funded – reporting over $11m on balance sheet at their last quarterly – with an updated quarterly anticipated before the end of the month.

We are long as of yesterday, and will manage the trade to the above risk, looking for 4.7c first, with potential to above 6c if things go their way.

Steve Collette of Collette Capital Pty Ltd (ABN 56645766507) is a Corporate Authorised Representative (No. 1284431) of Sanlam Private Wealth (AFS License No. 337927), which only provides general advice.

Collette Capital only makes services available to professional and sophisticated investors as defined by the Corporations Act, Section (s)708(8)C and 761G(7)C.

The Collette Capital Wholesale IMA Strategy has returned +24.83% p.a. net of all fees as at the end of September 2021 since inception in January 2015 (using the Time Weighted Return method of calculating returns).

Learn more at www.collette.capital

The post Chart of the Day: Plenty of immediate upside targets for Ionic Rare Earths appeared first on Stockhead.


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