Alkemy Capital Investments Share Discussion Threads

[mwj1959] 12/10/2022 20:02

I'll ignore that! I've worked in the industry for over 30 years, so probably hae significantly more experience than you in investing in these sort of companies. It's "option money" in the sense that a small investment can deliver a significant return, but it could also be worthless (under a worse case scenario I admit). Clearly, I hope that won't be the case, but perish the thought that if it did occur my exposure and loss would be relatively limited in the context of my overall portfolio. Investing is about getting the balance between risk and reward right. In my opinion there is significant reward in this stock, but also significant risk and that is what drives the size of my exposure. This is is no way a one way ticket to riches, which is what you seem to think, but I'm happy to have some exposure given the merits of the project.

[sirmark] 12/10/2022 19:10

You have only been registered for a few months, is this your first time investing?

[sirmark] 12/10/2022 19:08

As you keep saying ..."option money" and a negative slant Al other every post. Do you think these stocks are for you?

[mwj1959] 29/9/2022 15:15

Let's hope so. Funding (Capex at just under $300m to get Train 1 operational) as with PA's other venture (PRE - Capex required of just under $500m) remains the key...and the background for this has deteriorated significantly, regardless of the merits of the project. Still option money to me.

[lenses] 29/9/2022 08:30

Rns.

Lot of positive work going on.

Reckon one day soon there will be a big upside shock that almost all will miss.

[mwj1959] 26/8/2022 11:03

Shard Capital (house broker) research report summmary from front page. TP >£6 alongside >£8 target from other house broker. Only really a PI stock at current mkt cap and option money for me...with plenty of upside if it all works out...

We initiate full coverage on Alkemy Capital Investments plc (Alkemy). Alkemy’s 100%-owned subsidiary Tees Valley Lithium (TVL) is developing a world-class, low carbon, lithium hydroxide (LHM or LiOH) refining facility at the Wilton International Chemical Park in the Teesside Freeport, UK. Vying to be the first of its kind in the UK, the plant will process a variety of lithium feedstocks to produce a low-carbon footprint, battery-grade lithium hydroxide product suitable to supply the rapidly expanding European battery market for electric vehicles (“EVs”) and renewable energy storage.
► UK hydroxide project. TVL envisages production of 96,000tpa of battery-grade LHM via staged/modular development, comprising 4 processing trains, each with a 24,000tpa capacity. Train 1 will follow a conventional process route, with subsequent Trains 2-4 employing a lower carbon electrochemical route using substantially fewer chemical reagents by utilising green,renewable power. Metallurgical testwork completed by leading lithium laboratories has yielded
ultra-pure LHM exceeding industry standards and other saleable by-products. LHM is the key input for nickel-rich NMC lithium batteries favoured in European EVs. TVL’s process also provides the option to produce a percentage of lithium carbonate alongside LHM, allowing access to the growing LFP (lithium-iron-phosphate) battery market which requires lithium carbonate.
► Superlative location: a Freeport zone within an established chemicals park proximal to the UK’s 5th largest port provides a range of incentives and direct access to the burgeoning European market, not least renewable power meaning that TVL will be a 100% certified green energy operation from day zero. We visited the site in June 2022 and were impressed by the true “plug & play” credentials. With green energy, ready access to reagents and local skilled labour, the area is likely
to attract more ‘active material’ and battery industries to Teesside.
► Europe needs to play catch up. The ban on petrol/diesel vehicles from 2030 is driving a seismic shift for the demand of electric vehicles. By 2030, the European battery gigafactory landscape will have evolved significantly to an expected 1,400 GWh capacity potentially requiring c.675ktpa of lithium hydroxide. Current LiOH production capacity in Europe is zero. Despite any increase in the use of LFP batteries, LiOH remains likely to retain a significant portion of the market in Europe with NMC batteries alleviating the ‘range anxiety’ of European consumers. But there’s a problem, EVs roll off the production line with a 5–7-year carbon deficit to reach parity with internal combustion engine vehicles due to the significant carbon footprint of mining, processing and transportation.
This is particularly acute for LiOH produced from hard rock sources mined in Australia and refined in China. New EU and UK legislation is increasingly putting scrutiny on OEMs and battery makers to reduce CO2 emissions across the entire lithium supply chain. Carbon pricing mechanisms could add a significant cost to lithium imports into Europe.
► TVL’s solution. TVL’s solution is to lower the carbon footprint of imported lithium by processing a range of imported, low-carbon lithium feedstocks and avoid the bulk shipping of unrefined spodumene concentrates around the world. TVL plans to become a major supplier of lithium hydroxide by 2030. TVL can use a variety of feedstocks, such as lithium sulphate (LSM), a precursor lithium product. LSM can also be accepted from battery recycling, an industry that can only increase in scale. TVL can also process crude/technical grade lithium carbonate from brine and
mica projects, the latter could help to unlock and fastrack Europe’s nascent lithium mica mining projects. TVL has an MOU with leading global metals trader, Traxys, to source and supply lithium feedstock for Train 1 of TVL's planned processing facility in Teesside, significantly de-risking the first development phase of the project.
► Feasibility metrics. April 2022 Feasibility, project economics: post-tax NPV8 of £2.2bn, a post-tax IRR of 32.9%, a 26% EBITDA margin and short payback period. A fast-track timeline is anticipated with commercial production from Q4 2024, with no requirement to develop a mining operation. ► Shard Valuation. Our indicative valuation for the current stage of development is £45m versus the current market capitalisation of £7.8m*. On a per share basis, this equates to 614p/sh FD. ALK is
trading at 0.12x to our risked NAV, with a 742% return to NAV compared to the share price (3-8-22 at close) and 0.18x/463% to today’s 109p/sh intraday. This is based on a highly risked scenariobased NAV driven by our NPV8% of £442m for the first stage (Train 1) of the TVL Project. We see annual revenue and EBITDA at £429m and £98m respectively based on our conservative numbers. Compelling upside is available from higher lithium prices in addition to capacity increases.
Alkemy has an unrivalled opportunity to become a first mover and beat other lithium hopefuls to the punch by directly supplying the European market with low carbon-footprint lithium. There are hydroxide projects in gestation by other companies, but the TVL plant has fast-track credentials to be envied with low capital intensity and a superlative site location. TVL could win this race.

[mwj1959] 08/8/2022 07:17

Lithium sulphate plant announcement another step towards production.

[mwj1959] 04/8/2022 08:30

And options for the board at £1 that are only exercisable if share price hits £5 (broker has a target of £8.40). Would be interested to know who else participated. PA didn't fully take his corner as his holding is now down to just over 42% from 50%.

[mwj1959] 04/8/2022 08:21

Would be interesting to know who else participated in the placing other than directors. I note that PA's holding has now dropped to just over 42% from 50%. As a shareholder it would have been nice to have been able to participate and not be diluted, but I guess doing it the way they did keeps costs down. Agree the £5 option strike is punchy, but I guess that if the project gets off the ground that sort of price should be easily achievable.

[lenses] 04/8/2022 08:06

Options that only kick in above £5. Bold.

[andyview] 04/8/2022 06:26

Oversubscribed placing at a £1, good news

Gla

[mwj1959] 21/7/2022 09:12

Progress today with the announcement of a lithium feedstock agreement with Traxys. No-one seems interested in this stock anymore. Of course mkt cap at <£6m with 50% owned by PA may be a good reason why, but if it works the upside is material for what in my opinion is option money at present.

[mwj1959] 20/6/2022 09:24

Corporate broker / advisor research report with an £8.40 target price.

[...]

[mwj1959] 20/6/2022 09:19

Broker (one of their advisors / brokers)research note with target price of £8.40!
[...]

[cyberbub] 24/5/2022 21:44

This company ticks a lot of boxes for me. But when they only raised £1.5M at IPO, and are carrying out studies and employing staff etc, they must be needing more money pretty soon?

[snickerdog] 23/5/2022 13:51

Agreed, the newsflow today also indicating that something else might follow soon

[flashheart] 23/5/2022 07:04

An excellent RNS this morning.

[mwj1959] 16/5/2022 10:22

hxxps://teesvalleylithium.co.uk/wp-content/uploads/2022/05/Shard-Alkemy-12-5-2022-Class-4-flash-.pdf

Short research report from corporate broker Shard Capital. Emphasises the lower carbon footprint related to the importing of lithium sulphate feedstock compared to GL's use of lithium spodumene.

[lenses] 13/5/2022 12:10

Yes.

Both now have passed scoping on their respective teesside PA sites (redcar and Cleveland). GL plan to import 350kt/y of spod for 50kt/y of hydroxide (found nothing on where trafigura plan to get that). TVL with sulphate/carbonate I guess will need some 150kt for 96kt of hydroxide.

Even with all that both will only get to ~20% of expected 2025 Li battery demand.

[mwj1959] 11/5/2022 08:05

A lithium arms race in Tees Valley!

[lenses] 11/5/2022 07:31

Bit more

hxxps://www.thenorthernecho.co.uk/news/20128785.lithium-deal-set-power-revolution/

[mwj1959] 09/5/2022 14:12

No idea how GL stacks up relative to TVL in terms of timeline to first delivery as little information on the GL website. But my guess would be that they are behind TVL even if GL looks to have the substantial backing of Trafigura, which I'm sure that TVL would have liked. This perhaps reflected in the 5%+ decline in the ALK share price today.

[mwj1959] 09/5/2022 07:55

So Trafigura going with Green Lithium...Today's FT article

Commodity trader Trafigura is set to take a stake in a start-up company behind plans to supply car and battery makers in Europe with lithium from a UK refinery.

As part of the investment, Trafigura, one of the world’s biggest metal traders, would provide Green Lithium with feedstock for its planned 50,000 tonne-a-year plant in the north of England and sell the finished product to customers across Europe.

It would be Trafigura’s first big deal in lithium and comes as Russia’s invasion of Ukraine highlights the perils of being too reliant on one country for commodity supplies.

Trafigura estimates that more than 90 per cent of the world’s battery grade lithium is produced from refineries in China, which also processes the vast majority of cobalt and nickel, other key battery materials.

Socrates Economou, head of nickel and cobalt at Trafigura, said a lot of large “gigafactory&#8221; battery projects were under development in Europe and North America. “The question is where are they going to get the raw materials that go into the batteries.”

Most of the lithium used in electric car batteries is extracted from brines in Chile and Argentina and from rock dug up in Australia which is then processed in China, often using fossil fuels. Europe has no commercial refineries, making the region’s carmakers almost totally reliant on China for supply.

Benchmark Mineral Intelligence, an industry consultant, forecasts 117,000 tonnes of lithium demand for batteries in Europe this year, rising to 250,000 tonnes in 2025 and 600,000 tonnes by 2030. From 2024, manufacturers in Europe will face high tariffs if they do not source raw materials locally.

The agreement with Trafigura is a vote of confidence in Green Lithium, which hopes to secure the approvals required for its project by the end of the year. The company raised £1.6mn in seed funding last year from investors and has also secured a £600,000 grant from the UK government.

It produced its first battery grade lithium hydroxide — the product favoured by carmakers — under laboratory conditions last year and is raising capital to see it through to a final investment decision. It hopes to have the refinery running by the end of 2025.