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That trend will continue for at least the next decade.
Europe is leading the charge in adopting EVs and ZNWD will be one of the key providers of the precious lithium to be sourced locally. Otherwise, the automakers will incur massive tariffs on their car sales, while being banned from selling ICE vehicles!
Over 90% of my portfolio is now in battery metals. DYOR.
Why is a placing bad? Given how hot lithium is now, institutional investors like it when a junior has to raise new capital as they can invest significant amount of money.
As an example, have a look at Lake Resources (ASX:LKE). It raised A$20m in new capital. The round was oversubscribed at a premium and investors who missed out had to buy on the open market. The share price has doubled in the past 2 days. So it's all about the terms of the placing and I am pretty sure institutional investor demand will be significant for more advanced lithium projects like ZNWD.
Folks
This is being "walked down" by the market makers. Just look at the spread between the BID and the ASK.
Market makers love that game especially on very low volume. It catches forced sellers to accept a much lower BID. Don't fall for their games.
We should get new drill results in the coming weeks and I expect them to be as good as beforehand, especially for the underground one. We are only a few months from an updated resource estimate and becoming a commercial producer. So don't get twitchy and be tempted to sell at those prices!
Yes, 1/3 of the resource sits on the German side.
Germany is one of the main supporters of the EV revolution in the EU.
I doubt the German automakers will want to keep sourcing their lithium from China as it is just not green enough.
There are still many moving parts but I believe we will eventually get there. Apart from Vulcan Energy, this is the only other lithium project in Germany.
Here it is
https://www.europeanmet.com/wp-content/uploads/2021/01/Shard-Capital-EMH-15-1-2021.pdf
The share price chart shows how ZNWD has not risen as much as EMH and SAV. Most importantly it’s at DFS stage and is more advanced. There’s a disconnect and a clear case of market inefficiency.
Potential some short term traders exiting.
I believe there were also some options exercised at 8p. So those could be selling too for a quick buck.
Otherwise, I don’t see any fundamental reason for the sell off this week.
I’ll add more if it drops further.
Wedge Zone also seems to have quite significant high grades, which we can easily forget. They are currently drilling this zone.
296.1 g/t gold over 4.9 metres from test hole PGL-0003, including 1,147.1 g/t gold over 1.2 metres
https://www.lse.co.uk/rns/PUR/drilling-results-from-underground-and-surface-qmzkobpfq1unnjk.html
Boombaby
It's the high grade zone in PUR's resource base and could transform the company even further.
They plan to drill further in H2 2021 to expand that zone. The initial discovery is included in phase 1 mine, which is now operational and will enter commercial production by end of Q1 2021.
Tiptree
That's a given. That's why I've been putting as much cash on lithium, graphite and nickel stocks with operations in the Western world. The Biden administration has already declared those metals as critical elements to national security. Most companies with US exposure shot up overnight because of this.
The same thing is happening in Europe. Similar to the UK, the EU is very keen to develop all of its locally available lithium projects. Local automakers will have no choice but to source locally by 2027! There is simply no way ZNWD will not enter production.
What annoys me is that some EMH posters think Cinovec is the holy grail and no other projects are comparable but they are actually missing the point that ZNWD and others are simply undervalued in comparison. I will keep accumulating at those levels.
DYOR.
I simply couldn't resist - topped up again this morning. Never expected to be able to buy sub 15p! hehe.
Thank you to the sellers this morning. Selling lithium stocks now is simply a schoolboy error IMO. Biden takes office today and guess what: lithium and other critical elements are high on the agenda. Same thing in Europe. The west just does not want to be dependent on China anymore.
It may be hard to believe for EMH holders but ZNWD is actually more advanced than EMH. They already have a DFS with IRR numbers pre and post tax. The IRR is 21.5% post tax, which is comparable to what Piedmont has for their DFS.
Given the demand for lithium in the coming years, battery grade lithium prices will increase. The DFS has some sensitivity tables, which shows how the project IRR shoots up with higher prices (see page 16 of the link below).
https://wp-zinnwald-lithium-2020.s3.eu-west-2.amazonaws.com/media/2020/10/02113210/NI43-101-Zinnwald_Feasibility-Study_Summary.pdf
I own both EMH and ZNWD but calling ZNWD overvalued is unjustified IMO. DYOR.
Prophet
We can also look at things the other way round - this is the beginning of a fabulous bull market for precious metals and commodities in general. Load up and hold on for the ride.
Serendipidity
I am not a geologist or miner but I'm happy to share my 2 cents for what it's worth.
1. ZNWD is at DFS stage whereas EMH is at PFS stage. There's a big difference between the two. The fact that ZNWD has already has a DFS is a strong and positive sign for me because as a shareholder, I have good confidence whether this project will be profitable or not. I suggest you read the following article:
https://stockhead.com.au/primers/your-guide-to-mining-feasibility-studies/
2. Given ZNWD has a DFS, you can take a look at the NPV, which is EUR 428m (GBP 380m), which is several times higher than the current market cap. The DFS was produced in early 2019 when Li prices were potentially higher. So you need to apply a discount to the NPV but I think we can safely say ZNWD is NOT over-valued and in fact is significantly undervalued if you believe it will enter production.
Malik, Others: Please feel free to chime in on this point.
For those who are not aware of the impending surge in lithium across the EU in the coming years, this is a good reminder. The key sentence is "Under the terms of the EU/UK deal, the entire EV battery supply chain must be domiciled within the EU by 2027, if an EV is to qualify for tariff-free trade." 2027 is only 6 years away...https://www.thearmchairtrader.com/new-market-analysis-eu-uk-deal-sets-ambitious-target-for-ev-battery-production/
Red Lake acreage is like gold dust. It's the main high grade district in Canada.
Among the juniors, only GBR has similar acreage to PUR, i.e. on the actual main gold bearing greenstone belt.
PUR and GBR are the main juniors with multi-million oz resource base and are prime takeover targets in due course.