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Summary
- Sherritt’s shares are up 33 per cent this year after the company announced higher production guidance for 2021.
- Stocks of Sherritt have surged by 214 per cent in one year, and the company is set to announce its Q4 results on February 10.
- Lithium Americas’ stock has gained 398 per cent in one year, led by EV rally, and risen 58 per cent year-to-date (YTD).
The global rally in Electric Vehicle (EV) stocks had a direct impact on battery stocks as well. EV manufacturers require metals such as nickel, cobalt and lithium to produce batteries that power these green vehicles. These metals witnessed an explosion in demand last year, a momentum that extended in 2021. Battery stocks such as Sherritt International and Lithium Americas also gathered pace.
Nickel and cobalt producer Sherritt International Corporation (TSX:S) reported its guidance for 2021 on January 25. The mining company’s 2021 estimates for total nickel production is in the range of 32,000 to 34,000 and cobalt production is between 3,300 to 3,600 tonnes (on a 100% basis). The miner’s share of capital spending at its joint venture Moa and the Fort Site is pegged at US$ 44 million in 2021.
On the other hand, Lithium Americas Corp (TSX:LAC) raised US$ 400 million on January 22, from its latest offering of over 18 million common shares at US$ 22 per stock. The lithium stock has been trading with an average volume of 1.62 million on the back of this offering.
Both the stocks have been trending in the Canadian markets since Monday. Let us delve into the market fundamentals of these two batteries stocks:
Sherritt International Corporation (TSX:S)
Current Stock Price: C$ 0.55
The mining corporation engages in the production of nickel and cobalt with its joint venture Moa in Cuba. It also has operations in North America.
Its scrips have rocketed over 214 per cent in one year, with an average volume of 1.84 million for the last 10 days. The metal producer’s shares have swelled 33 per cent year-to-date (YTD).
The company paid off its debt of US$ 301 million in the third quarter (Q3) last year, ended on September 30, 2020. Its stake in nickel production at the Moa JV was 3,750 tonnes in Q3 2020, down 9 per cent year-over-year (YoY), while cobalt production dropped 6 per cent YoY to 409 tonnes. The company estimates working capital of US$ 44 million for replacement of mine and factory gears in 2021.
Sherritt International Corporation is likely to announce its Q4 2020 results on Wednesday, February 10, 2020.
Image Source: Kalkine Group @2021
Lithium Americas Corp. (TSX:LAC)
Current Stock Price: C$ 24.75
The lithium miner is one of the top price performers on the Toronto Stock Exchange (TSX). The Vancouver-based corporation has operations in Argentina and Nevada, US.
The lithium producer’s shares stocks have garnered over 398 per cent growth in one year and up 58 per cent YTD. It holds a price-to-book ratio of above 22.
The company reported a net loss of US$ 6.5 million in Q3 2020, against a net gain of US$ 69.0 million same quarter last year. The company’s net gain in Q3 2019 was high due to the dilution of its stake in its lithium project at Caucharí-Olaroz, Argentina.
Lithium Americas is expected to announce its Q4 2020 earnings on March 12, 2021.
