Governments have pushed the use of electric vehicles around the world, and all these electronic vehicles use lithium-ion batteries, approximately 24% of cars in the recent Paris motor show were electric. It is expected that the market will be heading towards a supply crunch as the outlook for commodity market remains bullish. However, does this demand for lithium implies the demand for lithium stocks, let us find out.
Galaxy Resources Limited (ASX: GXY) – For a consideration of US$15 million, the company has signed final transfer deed under which the brine extraction rights held by Galaxy over five remaining Salta tenements are assigned to POSCO. From the negative net margin of 43.3% in 1HFY17, the company has reported a positive net margin of 13.0% in 1HFY18. While compared to a negative operating margin of 10.8% in 1HFY17 the operating margin, has increased by 20.1%. Galaxy has a high P/E of 40.130 and EPS is of 0.061 AUD which signifies future growth. The stock traded at a market price of $2.405 after falling as much as -2.236% on December 11, 2018. The stock has undergone a performance change of -28.07% over the past twelve months.
Pilbara Minerals Limited (ASX: PLS) – With the receipts from customers which amounted to $16.4 million the company as of September 2018 had $2.4 million net cash which was mainly from the operating activities. As compared to a loss of $25.95 million in 2017, the loss for the year 2018 has reduced to $19.42 million. The company has top class raw material projects in the world with high quality, low cost, and long life. The market capitalization of the stock is around $1.33 billion at the current market price. The stock traded flat at a market price of $0.760 on December 11, 2018. The stock has undergone a performance change of -18.72% over the past twelve months.
Altura Mining Limited (ASX: AJM) – The company’s new offtake agreement replaces the existing offtake with Shaanxi J&R Optimum Energy Co. to some extent and JRO’s minimum offtake has been reduced from 100,000dmt to 50,000dmt. From a loss of $6,165,006 in FY17 to $12,816,965 in FY18 the company reported that the group net operating loss grew which was due to the net foreign exchange loss and the corporate and the administrative cost paid by the group. Return on equity also declined from -15.1% in FY17 to -17.1% in FY18 while Debt to equity ratio increased from 0.28 in FY17 to 1.57 in FY18 which is a negative sign. The stock traded at a market price of $0.175 on December 11, 2018. The stock has undergone a performance change of -49.32% over the past twelve months.
Lithium Australia Limited (ASX: LIT) – Located in the Archean Yilgarn Block, 450 kilometers north-east of Perth, the company has expanded its extensive holdings in Western Australia by completing formalities on an option over the Youanmi Lithium Project. The company has successfully manufactured lithium-ion batteries from the products of its SiLeach process. The consolidated entity’s working capital surplus was $13,697,269 as at 30 June 2018 compared to 2017 working capital surplus of $2,726,613 which is a positive. The stock traded flat at a market price of $0.095 on December 11, 2018. The stock has undergone a performance change of -47.22% over the past twelve months.
Kidman Resources Limited (ASX: KDR) – For the extraction and mining project the results of the feasibility study have strengthened the case for the JV that it had entered with the SQM. About the US$100 million capital expenditure facility Kidman and SQM are continuing to progress discussions on legally binding agreements further to the funding term sheet announced on 25 October 2018. The company has a big market opportunity as EV batteries will be the fastest growing of the end uses and are expected to equate to approximately 70% of lithium demand in 2025. The stock traded flat at a market price of $1.355 on December 11, 2018. The stock has undergone a performance change of -5.96% over the past twelve months.
Core Lithium Limited (ASX: CXO) – At an issue price of A$0.05 per share to raise approximately $3 million excluding cost, the company has received commitments to place approximately 60 million new shares. To increase the confidence of some of their existing resources the company continues to explore the larger Finniss Project area actively. The net loss of the Group, from the year ended 30 June 2018, was $2,094,330 as compared to 2017 of $1,933,689, i.e. an increase of $160,641. However, the stock traded up at a market price of $0.054 on December 11, 2018. The stock has undergone a performance change of 12.77% over the past six months.
Mineral Resources Limited (ASX: MIN) – With the Mining Services Division expected to contribute between A$240 million to A$260 million, the EBITDA guidance is between A$280 million and A$320 million. The group has an interesting P/E ratio of 9.790 and EPS of 1.453 AUD which compares well among the peer basket. The company also has a solid financial performance with revenue up by 16% to $1.7 billion generating EBITDA of $506.7 million up by 9%. The company’s NPAT hence increased by 35% to $271.8 million. The stock however traded down at a market price of $14.130 on December 11, 2018. The stock has undergone a performance change of -13.24% over the past twelve months.
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