Home Business Capital Dynamics | Tibet Everest intends to invest 1.7 billion US dollars to develop the Argentine Salt Lake project, the company warns that the project may not be implemented on schedule

Capital Dynamics | Tibet Everest intends to invest 1.7 billion US dollars to develop the Argentine Salt Lake project, the company warns that the project may not be implemented on schedule

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Caijing Capital Market News On November 17th, Mount Everest (600338.SH), one of the three Tibetan swordsmen who “extracted lithium from the salt lake”, signed the “Investment Agreement on the Industrialization of Salt Lake Resources in Salta Province” signed with the Government of Salta Province of the Republic of Argentina. (Hereinafter referred to as the “Investment Agreement” issued a risk warning announcement, stating that there are risks such as failure to implement the project on schedule.

As a “Salt Lake Lithium Extraction” concept stock, the annual share price of Mount Everest in Tibet has continued to rise this year, from the lowest price of 8.49 yuan per share during the year to the highest price of 50.89 yuan per share, with a cumulative maximum increase of about 500%. As of the close of November 17, Tibet’s Mount Everest closed at 29.1 yuan per share, an increase of 10.02%.

Tibet Mount Everest reminded in the announcement that as of the close of November 17, the company’s rolling price-earnings ratio was 46.13, which deviated significantly from the non-ferrous metal mining and processing industry’s rolling price-earnings ratio of 25.40 as of November 17.

Project implementation or risk

According to the announcement, on November 16, Tibet Everest and the Government of Salta Province of the Republic of Argentina signed the “Investment Agreement” at the 14th China-Latin America Entrepreneurs Summit. Argentina invested approximately US$700 million to build an annual production capacity of 50,000 tons of lithium carbonate products in the Angeles Salt Lake in Salta Province. The project is scheduled to start construction before the end of 2021 and is expected to be completed before the end of 2022.

At the same time, Mount Everest in Tibet will invest 15 million US dollars to complete the geological exploration of the Arizaro Salt Lake in Salta Province in 2022, obtain mining rights and environmental assessment permits (EIA); and plan to invest no less than 1 billion US dollars in Arizaro Salt Lake will build an annual production capacity of 50,000-100,000 tons of lithium carbonate products.

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Public information shows that Salta Province is located in the core area of ​​the well-known “South American Lithium Triangle” in northern Argentina, among the 20 lithium salt projects announced by the Argentine Ministry of Mines. At present, there are no lithium salt production projects in Salta Province, and there are only 2 projects under construction.

The Arizaro Salt Lake area has an area of ​​1,600 square kilometers. It is the third largest salt lake in the world and the largest salt lake in Argentina that has not yet been explored and developed. Tibet Everest Resources Co., Ltd. has the exploration rights of 338 square kilometers, and the estimated resource potential is good. It is planned to conduct comprehensive exploration in 2022, and complete exploration and conversion by the end of the year, making preparations for the development and construction of the project.

And on November 17, Tibet Everest gave a risk warning to the above-mentioned “Investment Agreement.” The company stated that the “Investment Agreement” signed this time is a non-binding cooperation agreement reached after preliminary negotiations between the company and the Government of Salta Province, Argentina. “Complete before the end of the year”, “and plan to invest no less than US$1 billion to build an annual production capacity of 50,000 to 100,000 tons of lithium carbonate in the Arizaro Salt Lake” and other related content is still in the implementation process, and there are problems that cannot be implemented and implemented on schedule. Risk of changes in content, amount, etc.

At the same time, Tibet Everest stated that the company’s Angeles Salt Lake project is still in the pre-development preparation stage, and it is not yet able to realize profits in the short term. In addition, the benefits of lithium salt lake development depend on the future terminal prices of the lithium salt market. If product prices drop sharply, there may be a market risk that investment returns may not meet expectations. In the process of subsequent implementation and after the completion of the project, it may be affected by factors such as macroeconomic and industrial environment, and there will be certain operational risks and management risks.

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From the perspective of funding, as of the end of the third quarter of this year, the monetary funds on Mount Everest in Tibet were 103 million yuan, which is a huge gap compared to the total investment of 1.7 billion U.S. dollars.

In this regard, Mount Everest of Tibet said frankly that the company’s own funds cannot meet the investment needs in the short term. It needs to combine the accumulated income of the Angeles Salt Lake project after it is put into production, and carry out other financing related work such as loans, so there are company financial expenses. Risk of increased burden.

Lithium carbonate may welcome the third round of price increases

Public information shows that Mount Everest in Tibet was established in 1998 and landed on the Shanghai Stock Exchange in 2000. It is mainly engaged in mineral resource exploration, mining, ore processing, metal smelting, mineral product trading and related industry investment operations.

Driven by the increase in the penetration rate of new energy vehicles and the demand for batteries, the price of lithium salt has risen. According to CCTV Finance and Economics, since this year, the price of lithium carbonate, a raw material for new energy batteries, has continued to rise. As of November 15, the price of battery-grade lithium carbonate was 195,000 yuan/ton. Year-to-date, the growth rate of lithium carbonate has exceeded 230%.

On November 16, the minutes of the conference call disclosed by the Guotai Junan Nonferrous Metals team showed that the end of the year is approaching and the centralized stocking cycle is approaching, and the purchasing sentiment of manufacturers has increased significantly. Lithium salt prices will usher in the third round of price increases, and the core catalyst for price increases is stocking up years ago. Before the Spring Festival or even at the end of December, the price of battery-grade lithium carbonate may reach 250,000 yuan/ton, and the price of lithium salt may continue to rise in 2022.

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At the same time, Guotai Junan believes that the global lithium supply will increase by about 180,000 tons of LCE (lithium carbonate equivalent) in 2022. This year, global lithium production is about 550,000 tons of LCE, a year-on-year growth rate of about 33%-35%.

Everbright Securities pointed out in the research report that the global supply and demand gap of lithium resources in 2022 is about 34,000 tons of LCE. In 2023, a large number of new ore and salt lake projects will be put into production worldwide, and the gap between supply and demand has narrowed. In the next five years, the CAGR of 30% on the supply side of lithium resources will be lower than the CAGR of 34% on the demand side, so lithium prices still have room to rise.

In the context of the continued upward adjustment of lithium prices, the lithium mining sector once again “takes off in the wind.”

From: wind

On November 17, A-share lithium mining concept stocks rose sharply. Wind data shows that as of the close of the day, the lithium mining index rose 6.91%, and 14 lithium mining concept stocks rose. Among them, Yongxing Materials, China Mineral Resources, Tianqi Lithium, Rongjie, Shengxin Lithium Energy Daily Limit, Tianhua The ultra-net growth rate was 11.5%.

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