Why is this innovative metal stock up 3x YTD?

Australia is among the top producers of futuristic metals fulfilling modern electrification needs. Alongside a favourable political climate, Australia also has an already existing well-developed resources industry.

It is predicted that, by 2035, more than half of all new passenger vehicles produced will be electric. Fueled by the rising demand for electric vehicles (EVs) and Energy Storage Systems (ESS), more metal extractors are diversifying towards futuristic, sustainable metals like lithium, titanium, and Vanadium.

While EVs and ESS target sustainable solutions for electrification, the raw materials used in them are extracted from mining, which is not an eco-friendly process, it is therefore becoming important that mining businesses develop a clean value chain. It will help them align the business to the global calls for 'zero emissions'.

Keeping this in mind, we bring a sustainable resources value chain business that has seen its stock price zoom up 3x since January 2021.

Neometal Ltd. (ASX:NMT) headquartered in Perth is an ASX listed industrial metals company.It is focused on innovatively developing opportunities in advanced materials targeting the energy storage megatrend. Its advanced projects are focused on lithium, titanium and Vanadium development. NMT has three core projects that align with the global transition to clean energy value chain: Lithium-ion Battery Recycling, Vanadium Recovery, and Barrambie Titanium and Vanadium Project. 

NMT also owns an exclusive material recovery process used to recover nickel, cobalt and other valuable materials from used lithium batteries. In addition, through its operations, NMT recovers high-purity Vanadium from processing by-products of Scandinavian steelmakers.

How have NMT shares performed for shareholders?

NMT is a small cap stock on ASX where its shares are traded at a price of 89 cents per share on 17 September 2021. Shares of NMT have moved up over 206% YTD. Furthermore, its last three months’ returns have been over 81.5%. 

NMT Price chart YTD comparison with S&P200 Index chart, Image Source: REFINITIV

NMT recently announced a MOU with H2 Green Steel (a Swedish company) for evaluation of potential Vanadium in steel by-products commonly known as Slag. The Slag supply agreement is for a potential 10-year Slag supply.  It complements the existing agreements for planned vanadium production at NMT.

Recent key developments at Neometals Ltd.

  • Neometals, in its June quarter update, had highlighted that it is preparing for a London Stock Exchange AIM market dual listing.
  • It is not just expanding operations in Europe but has also recently signed an MOU with an Indian company (Manikaran Power Limited) to jointly fund lithium refinery developments.
  • Under its JV, Primobius with SMS group GmbH, it has agreed to fund pacing up of commercialisation of lithium-ion battery recycling operations.
  • On 18 August 2021, NMT shareholders approved the demerger of Widgie Nickel Limited, a dedicated nickel exploration and development company holding Mt Edwards nickel assets, for proportionate shares in a demerged company.

How is NMT poised for future growth?

  • NMT has moved its business focus from mining to innovative project developments.
  • It is now focused on eco-friendly material recovery and recycling.
  • Its business has exposure to commodities that are in trend such as, Lithium, Cobalt, Nickel, and Vanadium.
  • NMT is also expanding recycling operations in the metal segment, especially for extracting pure Vanadium from Steel scrap in Canada and Europe.
  • Its Eco-friendly processes are headed towards a zero-carbon footprint business

Bottom line-

NMT has a fast mover advantage amongst peer, as it has already streamlined its business to become ESG compliant. NMT shares are also responding well to its operational updates on ASX.  However, investors have to be extra cautious while studying resources companies’ as commodities are highly cyclical in nature.  

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