"Anyway, AVZ is on the up and up, over the next few week and maybe will replicate PLL by the end of this year hitting 50-60 plus cents with 1, 2 or 3 positive announcements"Speaking of Piedmont and Lithium demand in general,
This Stock Is Rising Because Tesla Needs More LithiumStock in exploration-stage
lithium miner Piedmont Lithium has soared—by about 166%—since electric-vehicle behemoth
Tesla hosted its
battery technology day on Sept. 22.
At the event, Tesla painted a picture of future EV demand that implied the world needs a lot more EV-related materials, including lithium.Now Piedmont (PLL) is using its recent share strength to raise money to fund growth.
On Monday, Piedmont announced plans to raise money by
selling stock.
The company wants to sell up to 1.5 million American depositary receipts, or ADRs.
An ADR is, essentially, American stock in a foreign-listed company. Piedmont’s primary stock listing is in Australia, even though Piedmont’s assets are in the U.S. (Australia and Canada have investor bases that typically don’t mind investing in early-stage mining enterprises.)
For Piedmont, one ADR represents 100 shares of underlying stock.
The sale has the potential to bring in roughly $45 million to company coffers, depending on the price discount offered on the sale.
Piedmont has about $19 million in cash on its balance sheet, based on
recent filings.
The company might use the cash toward the hard rock mine it is developing in North Carolina.
Early phases of Piedmont’s mine should cost about $170 million, according to CEO
Keith Phillips.
Piedmont is also getting some money from Tesla.
Piedmont stock soared
more than 200% on Sept 28, days after Telsa’s battery event, when Tesla signed a deal for five years of lithium-ore supply, with a possible extension for another five years. Deliveries from Piedmont to Telsa are expected to start around 2022.
The lithium sector is heating up, and Barron’s recently wrote positively about lithium miners.We prefer Livent, believing higher demand from EVs will drive higher commodity volumes for all miners, as well as higher lithium-linked commodity prices.When we wrote about the miners, we focused on the established players, including SQM (SQM),
Albemarle (ALB), and Livent.
Those three have an aggregate market capitalization of more than $19 billion.
But there are riskier plays.
Piedmont, with a market value of about $340 million, is one.
Lithium Americas (LAC), valued at $1.2 billion, is another.
Those two don’t have sales yet.
Orocobre is another small-capitalization lithium firm, though with some sales.
It produces lithium from brines in Argentina, and has a market cap of about $640 million.
Orocobre stock is down 5% since Tesla’s battery event.
Lithium Americas stock has climbed 42%.
Year to date, Piedmont shares are up about 250%.
Excluding Piedmont, the other five lithium mining stocks are up about 77% year to date, on average, far better than comparable returns of the
S&P 500 and
Dow Jones Industrial Average.
To buy mining startups or exploration-stage companies, investors have to be confident in their ability to understand proven and probable mining reserves, along with how much the companies plan to spend before generating free cash flow.View attachment 2592068Tesla Needs Lithium.There’s only one thing standing between Tesla and world domination—the global supply of lithium.And that’s good news for lithium producers.When Tesla held its battery day on Sept. 22,
CEO Elon Musk laid out plans to build massive amounts of Tesla-owned battery capacity—enough to make about
30 million electric vehicles by the end of the decade, up from roughly 500,000 in 2020.
Such an enormous increase depends upon mass acceptance of
electric vehicles over traditional combustion-engine ones and the creation of the
infrastructure necessary to fuel that many EVs.
But it will also require a massive amount of lithium to make the batteries those cars will run on—a massive challenge in its own right.Right now, the world mines roughly 400,000 tons of lithium a year, enough to power 2 million to 3 million electric vehicles, though only a third of that goes to EVs right now.
That number will have to increase perhaps as much as tenfold to meet Musk’s goal, and that doesn’t take into account other auto makers.Tesla took one step to ensure part of its lithium needs by signing a
sales agreement with Piedmont Lithium (PLL) this past week.
Piedmont stock more than doubled after news of the sales agreement with Tesla broke—as well it should have.
The deal guarantees Tesla will buy about one-third of the startup’s production for up to 10 years.
Though Piedmont’s mine isn’t operational yet, it expects to deliver product to Tesla by 2022 or 2023.
Mining lithium isn’t easy—or easy to grasp.
The supply chain is complicated.
Lithium producers, for the most part, don’t ship pure metal.
Instead, they sell products such as lithium carbonate and lithium hydroxide to battery and battery-cathode
makers like LG Chem.
Miners get the elemental lithium from salt brines left over from ancient seas in places like Chile’s
Atacama Desert, the driest place on Earth, and in hard rock minerals such as spodumene, found in Australia and elsewhere.
Tesla’s recent deal with Piedmont will provide it with 60,000 tons of concentrated spodumene.
That will be converted into lithium hydroxide and turned into a battery cathode, which will be put into a battery cell as part of a Model 3 battery pack.
That 60,000 tons is enough for roughly 150,000 to 200,000 batteries, far short of the amount needed if Tesla gets anywhere near its target.Clearly, there is plenty of growth for existing lithium players.One wild card for producers is lithium product prices.
Industry pricing is a tightly guarded secret, and pricing indexes aren’t used for transactions.
Prices
peaked around 2018 and traded, at some points, for more than $25,000 a ton.
They later fell as new capacity came on line—capacity doubled from 2016 to 2019—and as the economy slipped into recession.
Pricing has flattened out over the past year at about $7,000 a ton.
“The direction of pricing should be up,” Piedmont CEO Keith Philips tells Barron’s.
“How high they go in the next cycle peak is anyone’s guess.”
Higher demand and higher pricing are good tailwinds for lithium stocks.View attachment 2592074Tesla stock higher after ‘best quarter’ ever for the Silicon Valley car makerNext year’s sales expected ‘in vicinity’ of 840,000 to 1 million cars, Musk says
Tesla Inc. stock rose in the extended session Wednesday after the Silicon Valley car maker reported a fifth straight quarter of profit and sales that rose 40%.
The July-September period was Tesla’s “best quarter in history,” Chief Executive Elon Musk said in a call with analysts after the company released the results.
“We continue to grow as fast as we can while focusing on cost control and quality,” he said.
“I think I’ve never felt more optimistic about the future of Tesla than I do today.”
Tesla’s fifth straight quarter of GAAP profitability “raises the likelihood of the stock being added to the S&P 500 in the near term,” he said.
In the letter to investors, Tesla said it has increased its Fremont, Calif., plant’s capacity to build Model 3 and Model Y vehicles to 500,000 units a year, started a second paint shop and is installing “the largest diecasting machine in the world.”
The Fremont plant will reach that full capacity at the end of the year or beginning of 2021, Tesla said.
Tesla said it increased Model 3 production capacity at its Shanghai factory to 250,000 vehicles a year, and it cut the Model 3 price in China to make it the cheapest premium mid-size sedan in that country.
A third shift has been added at its China factory, the company said.
Deliveries of the Tesla Semi, the company’s long-haul electric truck, are also slated for 2021.
View attachment 2592065View attachment 2592071What's good for Tesla / Elon ( love em or hate em ) is good for the Planet imoAfter all, who doesn't want to see "Blue Skies" in future 
Food for thoughtFrank View attachment 2592107
