Strike Resources Limited (ASX: SRK) shares are flying today after the mineral resources company made a major iron ore announcement. At the time of writing, the Strike Resources share price is trading 11.9% higher at 23.5 cents. In comparison, the All Ordinaries Index (ASX: XAO) is currently down 0.22%.

At one point during earlier trade, Strike shares rallied by as much as 21% before retreating to their current level.

Let’s take a closer look at what’s driving the company’s shares today.

Strike strikes it rich

In a statement to the ASX, Strike declared it had shipped 20,000 tonnes of iron ore from its Apurimac Project in Peru since December 2020. In that time, 6,000 tonnes of ore have already been crushed and processed. The ore consists of 64% to 65% iron.

Strike expects the site, which it fully owns, to increase production to 125,000 tonnes per year.

The company claims operational costs of extracting and crushing the ore will equate to roughly US$70 per tonne. In comparison, the current market price of iron ore is US$168 per tonne. Strike claims iron ore’s price can still climb by an additional US$33 per tonne. The website Trading Economics, however, is forecasting the iron ore price to fall to $143.81 in 12 months’ time.

Words from the managing director

Strike managing director William Johnson said the following in relation to the announcement:

Whist the Company remains firmly focussed on developing Paulsens East in the Pilbara into production, current market conditions have provided an opportunity to generate additional valuable cash flow from a mining operation at our Apurimac Project in Peru as well. 

Our local Peruvian team on site have done a tremendous job in marshalling local communities, miners and contractors together. Strike looks forward to replicating this operation several times across different deposits and community groups so we can progressively ramp up production whilst providing sustainable economic employment opportunities for local community members.

Iron ore’s meteoric rise

Iron ore’s commodity price is up 86.7% on this time last year. What is the main reason for this? In a word, China.

Demand for the product from The People’s Republic is booming as the country invests in its infrastructure and steel making capabilities. China alone produces over half of the world’s steel.

As China is the largest customer for iron ore, and it wants more of it, global demand for the mineral is up. As demand for a product increases, then so too must its price. In economics, this is known as the law of supply and demand.

Strike Resources share price snapshot

One year ago, the Strike Resources share price was trading at 3.7 cents. Since then, the company’s value has shot up by nearly 590%. Strike shares reached their 52-week high of 30 cents in January this year.

Based on the current share price, the company has a market capitalisation of around $52 million.

More reading

• Why the PlaySide (ASX:PLY) share price leapt 8% this morning
• ASX 200 down 0.15%: Westpac asset sale, Webjet update, gold miners jump
• Why the Bailador (ASX:BTI) share price is lifting this morning
• What’s going on with the Cimic (ASX:CIM) share price today?
• Cleanaway (ASX:CWY) share price headaches continue with Veolia lawsuit

Motley Fool contributor Marc Sidarous 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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At lunch on Thursday the S&P/ASX 200 Index (ASX: XJO) has failed to follow Wall Street’s lead and is trading lower. The benchmark index is down 0.15% to 6,784.5 points.

Here’s what is happening on the market today:

Webjet update

The Webjet Limited (ASX: WEB) share price is edging lower today following the release of an update ahead of the UBS Sydney event. In its presentation the company updated the market on its transformation progress. Management believes the company is well-placed for a post-COVID world, particularly its WebBeds business. It also noted that initiatives are currently underway to be 20% more cost efficient at scale and that WebBeds is taking advantage of new revenue and cost reduction opportunities.

Westpac asset sale

The Westpac Banking Corp (ASX: WBC) share price is trading lower today despite announcing another asset sale. The banking giant has signed an agreement to sell its Westpac Lenders Mortgage Insurance (WLMI) business to Arch Capital. While Westpac will record a loss on sale in FY 2021, the sale is expected to add approximately 7 basis points to Westpac’s Common Equity Tier 1 capital ratio. Management expects completion to occur by the end of August 2021.

Gold miners charge higher

It has been a great day of trade for gold miners such as Resolute Mining Limited (ASX: RSG) and Silver Lake Resources Limited (ASX: SLR) on Thursday. They are charging higher after a strong night of trade for the gold price following the latest FOMC meeting. At the meeting, the US Fed committed to not increasing rates until 2023. At the time of writing, the S&P/ASX All Ords Gold index is up a sizeable 3.4%.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Thursday has been the Silver Lake share price with an 8% gain. This follows a rise in the gold price overnight after the FOMC meeting. The worst performer has been the SKYCITY Entertainment Group Limited (ASX: SKC) share price with a 4% decline on no news.

More reading

• Westpac (ASX:WBC) share price lower despite announcing another asset sale
• Why Webjet (ASX:WEB) got kicked out of ASX All Tech index
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 dips, CBA launches BNPL, Fonterra reports
• Is the Commonwealth Bank (ASX:CBA) share price a buy or hold?

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Sky City Entertainment Group Ltd. 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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After a slow trading start, the Bailador Technology Investments Limited (ASX: BTI) share price is lifting on positive acquisition news from the company’s subsidiary.

At the time of writing, the Bailador share price has finally slipped out of the starting blocks, trading up 1.43% at $1.42.

Let’s look closer at what Bailador announced today. 

Big acquisition

In its release, Bailador advised that its subsidiary Instaclustr, an open-source software provider, has acquired Germany and US-based Credativ. Also an open-source software provider, credativ brings more than 500 customers to the party and adds to Instaclustr’s software and services suites.

Open-source software is software released under certain licenses that allow free public access to its source code. Both companies mostly market their software, data-infrastructure solutions and support services to businesses.

Bailador said that Instaclustr’s acquisition of credativ had significantly expanded its subsidiary’s size and scale. Instaclustr said the acquisition has added new technologies to its offerings and would improve its engagement with organisations across Europe.

While Bailador said the acquisition added “significant scale”, its valuation of Instaclustr remained unchanged as there was no third-party transaction to value the consolidated entity.

Commentary from management

Bailador co-founder and managing partner David Kirk praised Instaclustr’s position as a standout performer in the company’s portfolio.

The acquisition of credativ adds to the capabilities of the company and further strengthens its strategic position.

The acquisition adds new fast-growing technologies to the current platform and enables the company to continue to benefit from the structural tailwinds of massive growth in data, migration to the cloud and the adoption of open-source technologies.

Instaclustr CEO Peter Lilley added the company looked forward to reaching more businesses after its acquisition.

credativ brings a potent combination of particularly strong technical expertise across key open source data-layer solutions, and proven experience leading enterprises through future-proof implementations and digital transformations using those technologies.

Our mission to enable the world’s ambitions through open source technologies has taken a big leap forward.

Credativ’s former top management have accepted senior executive roles in the expanded group.

Bailador share price snapshot

The Bailador share price is enjoying a fruitful 2021. Currently, it has a year-to-date return of 20.6%. It is also up by 87.9% over the past 12 months.

At the time of writing, Bailador’s shares are trading for $1.42. The technology investment company has a market capitalisation of $172 million and approximately 122 million shares outstanding.

More reading

• 3 little known ASX growth shares to buy

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Bailador Technology Investments Limited. 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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If you’re interested in electric vehicles (EV) and ASX lithium shares then you may already baulk at the idea of hydrogen-powered cars. Perhaps, following in Elon Musk’s footsteps, you even call them ‘fool cells’. 

The day that hydrogen fuels your daily commute is probably a long time away — and may never happen — as hydrogen production is worse for the environment, costs more to recharge, and doesn’t currently power your kettle. This is why Tesla (NASDAQ: TSLA), Volkswagen and the Mercedes-Benz division of Daimler AG have already sworn off the burgeoning technology for their EVs.  

However, companies like Hyundai and Toyota are shipping fleets of hydrogen-powered vehicles to Australia this year. Let’s take a look at the lay of the land. 

The advantages of hydrogen over lithium batteries

Hydrogen currently has four main advantages over lithium batteries: the rate of technological development is faster, the fuel cells weigh a lot less (making them potentially useful for aviation), recharging is far quicker and the time between recharging is far longer.

Hydrogen’s distance advantage is why Japanese manufacturers are already shipping them to Australia to be used in government fleets, and public transport companies across Europe are already investing in hydrogen buses. This advantage alone is enough to keep hydrogen in the game.

But there is another reason why hydrogen could be of interest. It’s a process called electrolysis, where electricity and low-cost metals like nickel and iron can form a catalyst to split hydrogen from water (the H from the ₂O). This not only cleans up the production of hydrogen and makes it more efficient, but it also has the potential to make it an infinitely portable fuel source.

This process, which is continually becoming cheaper and more flexible, holds the promise to one day replace lithium batteries all together, according to some enthusiasts.

Australia’s future in green hydrogen power 

The Australian National University believes that by the end of the decade, Australia will be producing this net-zero emission fuel source for just $2/kg, competitive with current fossil fuels. 

One of hydrogen’s biggest proponents, Fortescue Metals Group Limited (ASX: FMG) Chair Andrew ‘Twiggy’ Forrest, gave an insight into what to expect around hydrogen for the foreseeable future.

“We nudge the wheel, make sure our systems work, reduce costs, free up capital and create demand,” he said in his recent ABC Boyer Lectures.

“Then we encourage that momentum and reduce costs further, creating an even larger, more reliable supply, that again creates more demand. The flywheel begins to spin, on its own, faster and faster. Now, we’re building – at global scale – the flywheel of green energy.

“But let’s not underestimate the challenge,” he warned. “The fossil fuel sector will react to falling green hydrogen prices by slashing the cost of oil and gas until it’s almost zero. At the end, it will be grim – think of a knife fight in a telephone box.”

How have the major hydrogen players performed in 2021?

The year-to-date (YTD) returns on the 4 major hydrogen players on the ASX show how exuberantly the market is responding to the potential future of green hydrogen.

Pure-play hydrogen producer Hazer Group Ltd (ASX: HZR) is up 364.1% YTD with positive results in commercialising hydrogen’s production process, while big-cap oil and gas producer Santos Ltd (ASX: STO) is up 130.4% YTD in light of its exploration of the hydrogen-producing capabilities of the Cooper Basin.

“The Cooper Basin hydrogen concept study builds on our progress towards the 1.7 million tonne Cooper Basin Carbon Capture and Storage Project,” Santos CEO Kevin Gallagher said last year.

“Carbon capture and storage (CCS) is the fastest and most efficient route to a hydrogen economy, using less water, de-carbonising natural gas at its source and eliminating Scope 3 emissions. CCS enables the capture of carbon dioxide from the production of blue hydrogen, making it a ‘zero-emissions’ fuel.

“With over 65 years of experience in the safe production of natural gas, Santos has the operational knowledge, capability and infrastructure to be a leader in the creation of a hydrogen industry right here in Australia.”

The Province Resources Ltd (ASX: PRL) share price is up a whopping 2,258% YTD to 12.5 cents per share, after its acquisition of the HyEnergy hydrogen production project in Western Australia’s Gascoyne region.

Last, but certainly not least, is Twiggy Forrest’s Fortescue, with the Fortescue share price up 96.62% YTD. The blue-chip share is planning on investing billions into hydrogen fuel and is likely to be the most vocal proponent in this space as the company aims for net-zero emissions by 2040.

More reading

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Cimic Group Ltd (ASX: CIM) shares are relatively flat today despite the company announcing a new contract from the Queensland Government. 

In late morning trade, the Cimic share price has trimmed 0.48% and is sitting at $18.72.

Let’s take a look at what the engineering company announced.

Cimic share price fails to respond

Investors appear to be unfazed by the company’s successful win, sending the Cimic share price slightly lower.

According to this morning’s release, Cimic subsidiary CPB Contractors has been selected by the Queensland Government to upgrade the Bruce Highway.

The construct-only contract will see the company provide a number of works between Woondum and Curra. This is considered as a priority road project and will form a part of the national highway network. Once completed, the upgrade will provide a bypass east of Gympie while reducing heavy traffic congestion.

CPB Contractors will deliver 18 kilometres of new highway roads, realignments to local roads, 19 bridges and a new interchange at Curra.

The deal is forecast to generate revenue of $289 million for CPB Contractors. Project works are expected to commence sometime this year, with completion due in mid-2024.

Management commentary

Cimic group executive chair and CEO Juan Santamaria hailed the new contract, saying:

Cimic Group is pleased to be selected to deliver this important project through CPB Contractors. We look forward to working with communities in the Sandy Creek Road to Curra area and supporting the achievement of greater safety outcomes for road users based on our experience in regional projects in Queensland.

CPB Contractors managing director Jason Spear added:

CPB Contractors successfully completed Section C of the Cooroy to Curra upgrade and will apply that local knowledge to delivering this section safely and with the least disruption possible. We are also committed to engaging with local workers and businesses to facilitate skills development, work opportunities and other community benefits.

The Cimic share price has edged around 1% lower over the past 12 months, but is heavily down 25% year to date.

More reading

• ASX 200 dips, CBA launches BNPL, Fonterra reports
• Cimic (ASX:CIM) share price falls despite positive update
• Cimic (ASX:CIM) share price slides after credit rating downgrade
• Telstra (ASX:TLS) share price and others caught in Greensill insolvency
• The worst performing ASX 200 shares last week

Motley Fool contributor Aaron Teboneras 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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Cleanaway Waste Management Ltd (ASX: CWY) shares are slipping in morning trade today. At the time of writing, the Cleanaway share price is trading 3.02% lower at $2.25.

It’s been two weeks of wrangling for Cleanaway since the S&P/ASX 200 Index (ASX: XJO) listed waste management company announced its intentions to buy the Australian arm of France’s Suez SA. The deal was reportedly worth around $2 billion.

Legal rumblings over Cleanaway’s Suez acquisition plans

But in news dragging on the Cleanaway share price, the acquisition didn’t sit well with Veolia Environnement, which already owns 29.9% of Suez SA shares. Veolia is attempting to take over Suez with an 11.3 billion euro ($17.5 billion) bid, which would include the company’s Australian operations.

According to IBISWorld data, Cleanaway manages 22.7% of Australia’s waste treatment and disposal, while number two player Suez Australia controls around 18.3% of that market.

Only five days after Cleanaway’s acquisition announcement, on 9 March Veolia issued a legal warning over the takeover move. Apparently, the threat didn’t deter Cleanaway, and now Veolia has followed through.

Veolia launches lawsuit, naming Cleanaway

According to last night’s press release, Veolia has moved forward with legal action in France to stop the sale of Suez’s assets in Australia and the United Kingdom. The hearing is scheduled for 6 April.

Aside from Cleanaway Waste Management, the following companies are listed as defendants in the Veolia lawsuit: Suez SA, Suez Australia Holding Pty Ltd, Suez UK Group Holdings Ltd, I Squared Capital Advisors (US) LLC, I Squared Capital Advisors (US), and I Squared Capital Advisors (UK Parent) Limited, PLC.

According to the press release, Richard Kirkman, Veolia Australia Managing Director and CEO, said: “Any attempt by Suez to transfer strategic assets would be regarded as hostile to Veolia and contrary to the best corporate and competitive interests of Suez, its shareholders, employees and the market”.

The wrangling continues.

Cleanaway share price snapshot

Cleanaway shares have gained around 36% over the past 12 months, just slightly below the gains posted by the ASX 200.

So far in 2021, the Cleanaway share price is down by around 3.8%.

Cleanaway pays an annual dividend yield of 1.9%, fully franked. Based on the current Cleanaway share price, the company has a market capitalisation of around $4.77 billion.

More reading

• This fundie refuses to invest in gambling and fossil fuels
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• Cleanaway (ASX:CWY) share price on watch after Veolia legal warning
• Thursday’s top performing ASX 200 shares at the end of the session
• Cleanaway (ASX:CWY) share price swept up in >$2bn acquisition rumour

Motley Fool contributor Bernd Struben 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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The Westpac Banking Corp (ASX: WBC) share price is trading lower on Thursday morning despite announcing another asset sale.

At the time of writing, the banking giant’s shares are down 0.3% to $24.60.

What did Westpac announce?

This morning Westpac announced that it will be offloading yet another non-core business.

According to the release, Australia’s oldest bank has signed an agreement to sell its Westpac Lenders Mortgage Insurance (WLMI) business to Arch Capital (Arch).

As part of the deal, Westpac has entered into a 10-year exclusive supply agreement for Arch Capital to provide Lenders Mortgage Insurance (LMI) to the company.

Westpac will also retain responsibility for certain legacy matters and provide protection to Arch Group through a combination of customary warranties and indemnities.

What are the terms?

The release explains that the sale price will be at book value, which will be determined at completion. The transaction also includes small, fixed annual payments to Westpac over the next 10 years.

However, Westpac will record a loss on sale in FY 2021 from the separation and transaction costs, along with an $84 million write down in goodwill that was previously announced with its first quarter update.

Despite this, though, the transaction is expected to add approximately 7 basis points to Westpac’s Common Equity Tier 1 capital ratio.

Westpac’s Chief Executive Specialist Businesses & Group Strategy, Jason Yetton, commented: “The sale continues the simplification of our business and builds on our progress in becoming a simpler, stronger bank focussed on consumer, business and institutional banking.”

Mr Yetton also spoke positively about its partnership with Arch Group for LMI.

He added: “Westpac is pleased to be entering into a long-term partnership with Arch as LMI is an important product that helps the Group make home ownership more accessible for more Australians.”

Completion of the transaction remains subject to various regulatory approvals. However, management expects completion to occur by the end of August 2021.

Today’s decline hasn’t been able to take any of the shine off the Westpac share price performance this year. Since the start of 2021, Westpac’s shares are up an impressive 25.5%.

More reading

• Is the Commonwealth Bank (ASX:CBA) share price a buy or hold?
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• ASX 200 down 0.6%: Telstra upgraded, Webjet rated as a buy, Westpac update
• ASX 200 Weekly Wrap: Calm restored to the ASX 200
• 2 blue chip ASX dividend shares in the buy zone

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. 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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ASX lithium shares are in the spotlight as the Victorian government is set to introduce a world-first tax on electric vehicles.

The charge, which could cost the average owner $330 per year, is set to become law from 1 July. That is conditional on the government’s bill passing the state parliament.

The proposal stands in stark contrast to most other jurisdictions globally. Many nations, states, and localities provide tax incentives and rebates to encourage drivers to buy low or zero-emission vehicles.

ASX lithium miners, such as Lake Resources NL (ASX: LKE), Hawkstone Mining Ltd (ASX: HWK), and Piedmont Lithium Ltd (ASX: PLL) all have boomed recently on the back of ever-growing demand for lithium dependent electric vehicles.

Similarly, cobalt is an essential metal in the manufacturing of lithium-ion batteries. Miners like Cobalt Blue Holdings Ltd (ASX: COB) would be affected by any policy that impacted demand for electric vehicles.

So, the question is, will other governments follow suit? If so, what does that mean for ASX lithium shares and related industries? Let’s take a closer examination.

Why is the Victorian government taxing electric vehicles?

The charge, which will see owners pay 2.5 cents per kilometre travelled in zero-emission vehicles and 2 cents on hybrid cars, is being justified as a way for all drivers to pay for roads.

“Everybody who uses a road should pay their fair share to maintain them,” said Victorian Treasurer Tim Pallas.

As electric vehicles use no fuel and hybrid vehicles use a minimal amount, owners avoid paying fuel excise taxes that fund road infrastructure.

Zero-emission automobiles make up less than 1% of all Australian cars – well below nations in Europe, where the figure is approximately 4.7%. Federal government modelling expects the figure to increase from 5% – 25%.

Mr Pallas agrees. “We’ll get to a point where essentially there’ll be no revenue capacity for the state to manage the use and maintenance of our roads,” he said.

Will others follow Victoria’s lead?

In Australia, maybe. The South Australian government beat Victoria in introducing legislation to tax electric vehicles but shelved the plans to see what impact it would have in its neighbouring state.

According to The New Daily, the ACT, Tasmania, and Western Australia do not intend to introduce such a tax. However, New South Wales and Queensland have left the possibility open.

A discussion paper on electric vehicles released by the Federal Government in February examines the proposed Victorian tax and does not discredit it or rule it out on a federal level.

The paper, entitled Future Fuels Strategy, discusses strategies to increase uptake, including:

• investing in charging for infrastructure;
• trialling electric vehicles within the Commonwealth fleet, and;
• managing increased demand on the electricity grid.

The government, however, is not considering any form of increased fuel standards or financial benefits.

What is the general stance at a global level?

Australia is just a small player in total global car sales. Nations worldwide and the private sector are using their resources to encourage more electric vehicle sales, not fewer.

In the United States, for example, the government provides a tax credit of up to US$7,500 for each purchase of an electric vehicle. The European Union is targeting 30 million electric vehicles on its roads by 2030.

China requires 12% of all vehicles manufactured in or imported to the country to be electric.

Even General Motors Company (NYSE: GM) plans to stop selling cars with combustible engines by 2035.

While it’s impossible to predict, all indicators (even in Australia) point to electric car sales continuing to increase. Of course, more electric vehicles equal more demand for lithium, cobalt, and other metals required in battery manufacture.

ASX lithium and cobalt stock price snapshots

At the time of writing, the Lake Resources share price is trading 2.82% lower at 35 cents per share. In contrast, the Hawkstone share has lifted 2.78% to 3.7 cents, and Piedmont shares are selling at $1.04, up 1.96%. 

Over the course of 1 year, the share prices of each of these companies have increased between 173% and 338%.

The Cobalt Blue share price is currently up 1.23%, trading at 41 cents. Its share price has increased by 310% since this time last year.

More reading

• These are the top performing ASX lithium stocks in 2021 so far
• Why Lake Resources, PainChek, Z Energy, & Zip shares are rising today
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• Why the Piedmont Lithium (ASX:PLL) share price is zooming 9% higher today
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Motley Fool contributor Marc Sidarous 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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The Volpara Health Technologies Ltd (ASX: VHT) share price is on course to record a strong gain on Thursday.

In morning trade, the healthcare technology company’s shares are up a solid 4% to $1.35.

Today’s gain means that the Volpara share price has now risen by over 18% since this time last year.

Why is the Volpara share price storming higher today?

Investors have been buying Volpara’s shares today after it announced the publication of the results of the second round of Project DENSE in Radiology.

The DENSE trial, which is based in the Netherlands, started collecting patients 10 years ago. It is the first randomised controlled study on the clinical utility of breast MRI supplemental screening for women with extremely dense breasts. The study is using the company’s Volpara Density software to assess breast density.

The first results from DENSE trial in December 2019 showed a significant reduction in interval cancers in those women being selected for breast MRI using Volpara Density, but with a relatively high false-positive rate.

Second time around, although the incremental cancer detection rate was lower than that of the first round, the false-positive rate was only 26.3 versus 79.8 per 1000 screening examinations.

Volpara’s CEO Dr Ralph Highnam was pleased with the results and particularly the reduction in false positives being reported.

He said: “The first results from DENSE showed a dramatic decrease in the number of interval cancers by varying screening based upon VolparaDensity. These follow-up results demonstrate that as screening programs settle into these new protocols, the number of false positives is significantly reduced and makes the new protocol much more viable.”

“We are incredibly proud to be part of this work, which has been a 10-year journey for us and the investigators but is showing a real benefit to women,” Dr Highnam concluded.

More reading

• 3 ASX Healthcare shares feeling a little under the weather
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends VOLPARA FPO NZ. The Motley Fool Australia has recommended VOLPARA FPO NZ. 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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Vital Metals Limited (ASX: VML) shares have been placed in a trading halt on Thursday, pending an announcement of a capital raise. According to its website, the company is on the verge of transitioning from a rare earths explorer to a producer.

The Vital Metals share price has soared from the 1 cent range twelve months ago to a close of 8 cents on Wednesday. 

Transformational year for Vital Metals  

Vital Metals has achieved a number of significant milestones during its journey from explorer to producer. 

On 22 September 2020, the company signed a binding term sheet to negotiate definitive agreements for the construction and operation of a rare earth extraction plant to produce a mixed rare earth carbonate. 

By 22 December 2020, Vital Metals had entered into a binding term sheet with REEtec for an annual volume of 1,000 tonnes of rare earth oxide over five years. Both parties have an option to increase this offtake volume up to 5,000 tonnes over ten years. 

Vital’s strategy is to develop its flagship Nechalacho project in two stages. Stage one of the operations focuses on the current development and construction of the site to begin producing rare earth oxide, while stage two aims to expand its current resource and project size. The company announced that drilling for stage two had commenced on 16 February 2021. 

By 26 February, Vital announced it was on track to commence rare earth production at its Nechalacho project by Q2 CY21. This would make Vital the first rare earths producer in Canada and only the second producer in North America. 

Trading halt for capital raise 

Vital Metals shares have entered a trading halt on Thursday regarding a capital raise. The company anticipates that it will resume trading by Friday 19 March.  

In the company’s half-year accounts for 31 December 2020, it had $6 million in cash and cash equivalents and delivered a net loss of $4 million. 

More reading

• Why the Vital Metals (ASX:VML) share price just hit a 5 year high

Motley Fool contributor Kerry Sun 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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