Summary

• Piedmont Lithium (NASDAQ:PLL) announced signing a five-year contract with Tesla Inc (NASDAQ:TSLA) on Monday.
• Westwater Resources (NASDAQ:WWR) recently sold its uranium assets in New Mexico and Texas to enCore Energy Corp.
• The TSX Base Metals index is currently up 12.56 per cent quarter-to-date (QTD).

Mining stocks rallied this week after the announcement of a contract between Elon Musk’s Tesla Inc (NASDAQ: TSLA or TSLA: US) and Australian company Piedmont Lithium. The S&P/TSX Global Base Metals index, with 27 constituents, is up 12.56 per cent quarter-to-date (QTD). Between September 23 and 28, the index climbed by about 2.5 per cent. While Piedmont Lithium (NASDAQ: PLL or PLL: US) stocks saw a massive jump on Monday, shares of WestWater Resource (NASDAQ: WWR or WWR:US) also climbed substantially during the same period.

Piedmont Lithium and WestWater Resources stocks have recovered well from their March lows during the coronavirus market crash. Both the companies are emerging entities in their respective fields, with market caps under a billion dollar. Let us look into the latest performances of these two companies to understand their growth better.

Piedmont Lithium Limited (NASDAQ: PLL or TSLA: US)
Current Stock Price: US$ 37

Shares of Piedmont Lithium Limited skyrocketed 236 per cent during Monday’s (September 28) intraday session after it signed an initial five-year binding sales agreement with electric car maker Tesla. This comes after Tesla CEO Elon Musk announced at last week’s Battery Day event that the electric vehicle manufacturer is planning to increase its battery capacity for future projects. The deal states that Piedmont Lithium will supply Tesla with about one-third of its spodumene concentrate planned production, which is 160,000 tons per annum, from its North Carolina deposit.

The latest contract with Tesla has boosted Piedmont Lithium’s overall stock performance. From US$ 6.06 on September 1, its share value spiked to US$ 37 on September 28, registering a massive surge of 510 per cent. Its stock price now records nearly 348 per cent year-to-date (YTD) growth and an increase of about 679 per cent in the last six months. In the last 10 days, its shares saw an average trading volume of 5 million.

Piedmont Lithium recorded cash and cash equivalents of US$ 18.8 million in its latest quarter ending 30 June 2020, up from US$ 8.9 million in the March 2020 quarter. Its net cash from operating activities was US$ 1.36 million the June 2020 quarter, registering a slight quarter-over-quarter (QoQ) increase. However, its net cash from investing activities, amounting to US$ 731,000, was down from the prior quarter.

The company expects to generate about 10 per cent to 20 per cent of its total revenue from Tesla project, which comes with an optional extension of five years.

The lithium chemicals company has a market cap of C$ 427 million at the moment. It has a price-to-book (P/B) ratio of 3,700 and a debt-to-earnings (D/E) of 0.18, as per the data on the TSX.

The company is riding on the recent boost to the clean energy sector by governments worldwide. According to a Deloitte study, the electric vehicle demand alone will grow by from ~3% to ~30% by the end of 2030.

Piedmont Lithium’s chief project is located in the Carolina Lithium Belt of North Carolina in the United States.

Westwater Resources (NASDAQ: WWR or WWR:US)
Current Stock Price: US$ 1.97

Shares of Westwater Resources also saw a surge of 32 per cent in Monday intraday trade. Despite recording a six per cent YTD decline, its stock price climbed a remarkable 95 per cent in the last six months. It currently has a 10-day average trading volume of 8.5 million.

Earlier in September, Westwater Resources announced that it will be selling its uranium assets in New Mexico and Texas to oil and gas exploration company enCore Energy Corp. The deal is expected to close by December 2020. However, the company will retain its Turkey-based uranium interests, which are currently subject to arbitration proceedings. Westwater has also applied for a Provisional Patent with the U.S. Patent and Trademark Office for its proprietary graphite purification technology.

The mining company saw a net loss of US$ 2.46 million in its second quarter ending 30 June 2020, which was less compared to US$ 2.77 million in Q1 2020. Its total operating expenses in Q2 2020, amounting to US$ 2.48 million, was also lower than that in Q1 2020. The company had cash and cash equivalents of US$ 2.33 million as of June 2020. Westwater Resources said in its second quarter report that it has not recorded revenues from operations since 2009.

Westwater Resources currently has a market cap of C$ 14.9 million. It has a price-to-book (P/B) ratio of 0.925 and a debt-to-earnings (D/E) of 0.04, as per the data on the TSX.

US-based Westwater develops essential mineral resources to produce clean energy. It also focuses on battery graphite business and has interests in lithium and uranium deposits.