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Experts
Money Talks is Stockhead’s regular drill down into what stocks investors are looking at right now. We’ll tap our extensive list of experts to hear what’s hot, their top picks, and what they’re looking out for.
Today we hear from Peak Asset Management founder and executive director Niv Dagan.
Dagan says materials, specifically lithium, are very hot right now.
Like, so hot.
According to MarketsAndMarkets, the global lithium market is poised to expand by more than 26% CAGR over the period of 2021-2025.
Prices have tripled since 2010 and S&P Global says lithium supply shortages could persist in 2022.
“We are seeing global companies such as Volkswagen, Ford, and General Motors shifting their R&D spending and making net zero emissions pledges – it is hard to ignore the potential impact it has on the lithium mining industry,” Dagan said.
“One of the major trends we are seeing is large enterprises ‘tracking and tracing’ their emissions in real-time and ensuring their lithium mining operations produce as little greenhouse emissions as possible.”
The “circular economy” and the move towards zero emissions is a key focal point for large corporates and will continue to be as we head into 2022, Dagan said.
More and more companies are looking into how they can integrate solar, wind and geothermal power to cut costs and at the same time, capture emissions as another revenue stream, he said.
“Lithium and the circular economy will be the top two key themes for 2022 with the metaverse as the third.”
This ~$8bn lithium and tantalite company is at the top of Dagan’s list.
PLS has had a tremendous year, gaining 219% YTD,” he said.
“It owns ones of the world’s largest, independent hard-rock lithium deposits – Pilgangoora near Port Hedland in Western Australia, which comprises two processing plants for spodumene and tantalite concentrate production.
“The significant scale and quality of its operations has also attracted some of the major players within the industry, such as Ganfeng Lithium, General Lithium and Great Wall Motor Company.”
Another plus, Dagan said, is that PLS has committed to implementing environmentally friendly power solutions as part of its pledge to net-zero emissions in the decade commencing 2040.
“It has also signed a power purchase agreement with Contract Power Australia to construct, operate and maintain a 6MW solar farm.”
In Q1, 2022 Dagan said Peak Asset Management will IPO Patagonia Lithium, which has three projects in JuJuy in northern Argentina – right along strike and adjacent to Allkem (ASX:AKE) previously known as Orocobre, a multibillion-dollar company.
Allkem’s Olaroz Lithium Facility can produce up to 17,500 tonnes per annum of battery-grade lithium carbonate.
According to Dagan, Patagonia Lithium has already conducted sampling on ground at its tenement Mina Formentera, with more than 337ppm from surface and 599 lithium mg/l.
“The concession area is located in one of the wide depressions of the Puna and is amongst the outstanding salar basins of northwest Argentina,” he said.
“It is also around 1,752 hectares and is located in an area dominated by clastic and saline sedimentation.”
Minerals Resources has assets spread across iron ore and lithium.
“Owing to a run-up in iron ore prices, the miner posted stellar FY21 results revealing revenue of $3.7 billion (+76%) and underlying profits (NPAT) of $1.1 billion (+230%),” Dagan said.
“Indeed, Mineral’s spodumene operations continued to drag on performance in fiscal 2021, delivering an EBITDA loss of $5 million.
“But in FY21, the company exported 17,274,000 wet metric tonnes of iron ore; and 485,000 dry metric tonnes of spodumene.”
With a market capitalisation of $9.28 billion, Mineral Resources is one of the largest companies on this list, Dagan said.
Year-to-date the stock has traded up 30%, last sitting around the $49.18 per share mark.
The views, information, or opinions expressed in the interviews in this article are solely those of the interviewee and do not represent the views of Stockhead.
Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.
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