Magnis Resources Limited

MNS Details

Progressing well on developments for Lithium-Ion Battery Plants:Magnis Resources Limited (ASX: MNS) has recently announced that the primary manufacturing location for the New York State Lithium-ion Battery (LIB) Gigafactory Consortium will be the Huron Campus. The consortium partners (including New York based Charge CCCV (C4V), Primet Precision Materials, C&D Assembly and Australian based Boston Energy and Innovation and Magnis Resources) have already entered an agreement with officials from the Huron Campus. The Huron Campus has been said to have technology, specialised equipment, an experienced team, and nearly 100 years in logistics business expertise. Further, the building earmarked for the manufacture of the consortia’s batteries totals 60 acres. The internal scoping study on LIB manufacture (15GWh) in New York and other jurisdictions was initiated by Magnis and C4V. The study was completed to assess the key project aspects, including battery market forecasting, raw materials supply, material technologies, manufacturing processes, key stakeholders and financial viability. Magnis had also updated about the strong support from the Queensland State Government and Townsville City Council for the Townsville Lithium-Ion Battery Plant for which site selection process was said to be nearing completion. Last quarter’s updates indicated that Magnis had signed an MOU with ROSATOM for its Nachu Graphite Project in Tanzania (in relation to finance and offtake). The group’s cash position as at March 2017 has been A$1.54M and this excluded funding from option conversions which provides Magnis with the financial flexibility to fund operations in the current quarter. The stock surged over 7% in last three months (as at May 26, 2017) but fell about 5% on May 29, 2017. Given the prospects,we maintain a “Buy” recommendation at the current price of $ 0.63


MNS Daily Chart (Source: Thomson Reuters) 

Orocobre Limited

ORE Details

Witnessing short-term pressure: Orocobre Limited’s (ASX: ORE) stock has fallen about 3.5% on May 29, 2017 and has been among the stocks being shorted recently. The company’s Chief Executive, Richard Seville has raised few concerns over the short selling of ORE’s stock and the opaque nature of such selling by investors which may lead to distortion of ASX market trading. On the other hand, the stock price surged a bit on May 26, 2017 while the group announced that it has received VAT refund and additional cash security deposits in Australia which back Sales de Jujuy S.A.’s (SDJ) Argentine working capital facility. Total of ~US$19.8m of VAT refunds have been received by SDJ to date including US$2.7m of additional VAT refunds received recently. The company reported 19% Quarter on Quarter (QoQ) growth in total revenue at US$32.1 million for Q3 FY17 and expects a significant rise in production for H1FY18. 


Hydrocyclones at Olaroz Facility (Source: Company Reports)
 
The Olaroz Lithium facility had also reported for a quarterly production which was in line with revised half-yearly guidance. There might be short-term pressures but overall growth prospects at the back of lithium market scenario look promising. We maintain a “Hold” recommendation on the stock at the current price of $ 3.64


ORE Daily Chart (Source: Thomson Reuters)

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