The Euro Manganese Inc. (ASX: EMN) share price looks like it will ring in 2021 over 180% higher than 12 months ago. At the time of writing, the yearly gains are posted at 182%.
The small Canadian mining endeavour has set out to mine manganese in the Czech Republic via its Chvaletice Manganese Project. According to management’s latest discussion and analysis, “The company’s goal is to produce high-purity manganese products in an economically, socially and environmentally-sound manner.”
So how come the Euro Manganese share price shot up over 180% this year?
First of all, what’s a high-purity manganese product?
Our journey begins with the growing popularity of electric vehicles. Electric cars need batteries. There are two big battery players in the market. Lithium manganese cobalt oxide batteries (abbreviated NMC) that run off of mainly nickel, manganese and cobalt. Then there are lithium iron phosphate (LFP) batteries, which tend to run cheaper. That’s why Tesla likes them.
As mentioned in management’s commentary, Euro Manganese is particularly focused on high-performance NMC Li-ion batteries claiming that high purity sources of manganese and other battery raw materials ensure that the batteries meet increasingly demanding performance, safety and durability standards.
What are analysts saying about the Euro Manganese share price?
In a research report released earlier this week, Morningstar calculated the Euro Manganese share price to be fairly valued, rating the company three out of five possible stars. However, the report also includes a ‘very high uncertainty’ rating which isn’t going to please some potential investors.
With a market cap of around $72.5 million, Euro Manganese is a microcap company. A lot of analysts don’t care about companies so small, which limits the coverage. However, if the share price continues marching upward like it has been, analysts are more likely to take notice.
What’s the final word?
Mining can be quite a risky game, especially for the little guys. This is often associated with amount of work that has to go into mapping, feasibility studies, government negotiations and other road blocks. Land acquisitions and environmental impact assessments can also slow things up. The list goes on, really.
Investors seem to be happy with the progress Euro Manganese is making, otherwise the share price wouldn’t have seen such a sweet 12 months. Going into 2021, the company will be tested to see if this momentum can continue.
The current Euro Manganese share price is trading at 39.5 cents, down 2.47%.
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Motley Fool contributor Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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