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Highlights
- Metal and mining companies have been impacted by shutdown of mining operations during the Covid-19 lockdown.
- The boom in the commodity market led to the rise in stock price of companies involved in mining and exploration activities.
The UK stock market has got a boost from the UK unemployment data. The official data by the Office for National Statistics (ONS), reported unemployment rate declined to a 4.7% in the three months to June and also reported a rise in job vacancies.
The top gainer from the FTSE 100 index was the metal and mining stock, BHP Group Plc, which was up by over 8% after it confirmed sell of petroleum assets to Woodside Ltd. The metal and mining companies has been impacted severely following the start of pandemic as these companies rushed to close down the mining operations to stop the spread of coronavirus. But, as the economies and industrial activities picked-up globally after the lockdown restrictions were lifted, resulting into revival in demand for various commodity and basic metals. The boom in the commodity market saw a significant rise in the steel and iron ore prices along with the rise in stock price of companies involved in mining and exploration activities.
Let us look at 2 FTSE listed lesser-known mining stocks that could give potential to the investors:
Horizonte Minerals Plc (LON:HZM)
The company operates in the exploration and development of minerals like nickel, cobalt in the Brazil. The company is currently developing two nickel projects, Araguaia and Vermelho, which are 100% owned by the company. The company’s stock has a dual listing on the London and Toronto Stock Exchange.
The company is in the final stage of preparation to start operation at its Araguaia Project. The project financing is completed, with credit committee approval expected to come in the third quarter of 2021 for the senior debt facility. Also, the company continues to maintain a strong cash position with a total cash balance of £22.2 million after it raised equity funding of £18 million in February 2021.
The company plans to supply nickel and cobalt extracted from its mines to the electric vehicle (EV) battery manufacturer. Going forward, the future is electric, and the raw materials used in making electric batteries like nickel is limited to few companies like Horizonte Minerals Plc. The company expects that Araguaia Project at its full capacity could produce 52,000 tons of nickel per year, which will help the company position itself as a leading nickel producer and supplier to the EV battery market and other industries like stainless steel.
Horizonte Minerals Plc’s current market cap stands at 111.36 million as of 17 August 2021 and has given over 54 per cent return to its shareholders in the last one year.
Related Article: 3 FTSE 100 Metals and Mining Stocks to Watch Amid Surge in Metal Prices
Bushveld Minerals Ltd (LON:BMN)
The company operates the mining and processing of vanadium ore along with the operations in the energy storage solution. It owns two of the four operating vanadium facility, and produce more than 3600 mtV of vanadium, which is close to 3% of the global vanadium market. The vanadium products are used in various industries like chemical, energy and steel.
The company reported a revenue of USD 90 million and EBITDA loss of USD 14.9 million in the period ended 31 December 2020, largely due to the drop in vanadium prices and production shutdown due to Covid-19. During the second quarter of 2021, the group’s production was at 886 mtV, and on track to achieve the 2021 production guidance of 3,400 mtV and 3,600 mtV. Also, the company’s sales were at 820mtV at a price of USD 36/kgV, a rise of 17% in price compared to first quarter.
The company last year completed investment in the Vanadium Redox Flow Batteries manufacturer Invinity Energy Systems plc and Cellcube. The Vanadium Redox Batteries are used for energy storage and has important application in the power plants and electric grids.
Bushveld Minerals Ltd.’s current market cap stands at 143.15 million as of 17 August 2021.
