Tag: Motley Fool

Lying dormant for years, ASX-listed magnesium miners are now springing to life amid concerns of a supply crisis.

Following on from a strong showing yesterday, these companies are rocketing again in early trade. This follows a joint call from multiple industries across Europe to address what could become a ‘catastrophic’ shortage of magnesium.

Let’s take a look at the latest development.

No plans for China to ramp up production

As we previously covered, the sudden boom in interest for magnesium miners follows the fall in output of the alloy element from China. Unfortunately, the world has a substantial reliance on China’s production of magnesium which accounts for 87% of the world’s annual magnesium production.

With China’s efforts to curb domestic power consumption, magnesium supply has dwindled. The side-effect is that Europe is believed to only have enough supply to last a few weeks.

The resulting ramifications could be extensive given that magnesium is a commonly used alloy in car parts, building products, and food packaging.

Despite the impending crunch, an article from China’s Global Times, published last night, isn’t promising for Europe’s magnesium prospects.

According to the publication, China is inclined to rollout restrictions on magnesium operations in the future — regardless of whether there is an energy shortage or not. It seems that’s sending ASX magnesium miners higher today.

Furthermore, many Chinese companies have resumed operations as normal since early October. However, magnesium miners have been instructed to operate at 40% of their normal capacity.

This is likely due to the material’s extremely high energy intensity needed for production. It is estimated that it takes 35-40 megawatt-hours to produce one tonne of magnesium.

ASX magnesium miners today

It seems the shortfall in supply is unlikely to be filled by China following its remarks on magnesium production. As a result, investors are speculating that ASX magnesium miners could be set to benefit from an imbalance in supply and demand.

Here are today’s big movers in the magnesium market:

• Magontec Ltd (ASX: MGL) up 20.83% to 58 cents per share
• Latrobe Magnesium Ltd (ASX: LMG) up 28.3% to 6.8 cents per share
• Korab Resources Ltd (ASX: KOR) is in a trading halt pending an announcement regarding a capital raising

Korab Resources appears to be making use of the heightened interest in the sector. The $9 million company has touted a “shovel-ready” magnesium deposit near Darwin.

All eyes are on the ASX magnesium miners as to what the next move is from here.

The post Why are ASX magnesium miners getting so much love this week? appeared first on The Motley Fool Australia.

More reading

• ASX magnesium shares are going gangbusters. What’s happening?
• Why did the Korab Resources (ASX:KOR) share price rocket 178% today?

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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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Motley Fool Australia Chief Investment Officer Scott Phillips joined Weekend Sunrise on Sunday to discuss the Australian suburbs where housing is most affordable (given the income of those residents), plus how to save, and what we can expect from the ongoing Evergrande saga.

The post Where housing is more affordable; and the Evergrande saga rolls on. Scott Phillips on Weekend Sunrise appeared first on The Motley Fool Australia.

More reading

• Why is the Nitro Software (ASX:NTO) share price on the rise on Wednesday?
• Why are ASX magnesium miners getting so much love this week?
• Why Tesla stock revved even higher on Tuesday
• Is the Appen (ASX:APX) share price dirt cheap?
• Wisr (ASX:WZR) share price slumps 4% despite record quarter

Motley Fool contributor Scott Phillips has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Success begets success — and boy, is Tesla (NASDAQ: TSLA) ever begetting it!

Last week, Tesla stock roared ahead after the electric-car giant reported 57% improvement in sales, 73% more deliveries, and adjusted earnings per share up 145% year over year. The stock leapt again yesterday when Hertz announced plans to buy 100,000 Teslas for its rental car fleet.

But why is Tesla stock up another 5.5% today (as of 10:33 a.m. EDT)?

So what

Since Tesla reported earnings last week, its stock has gained nearly 25% in market cap. Yesterday, the company passed the $1 trillion mark for the first time in its history. Today, there may be no specific, material news behind Tesla’s continued gains, but that doesn’t matter, because the kind of momentum Tesla is currently enjoying can become a sort of self-fulfilling prophecy.

Not to put too fine a point on it, but I honestly believe that right now, Tesla stock is going up because it’s going up.

Now what

Does this make Tesla a “momentum stock,” though — where its rising stock price has no basis in fact?

Not necessarily. As Morgan Stanley pointed out earlier today in a note covered by StreetInsider.com, “the Tesla you see today reflects a very differently resourced, pre-COVID Tesla,” which was, to an extent, constrained by lack of access to cash. It needed to periodically dilute shareholders with new issuances of shares to keep itself solvent and provide the capital needed for expansion.

Today’s Tesla still can sell shares to raise cash quickly, mind you. But its massive stock market valuation means it can now sell fewer shares than might once have been necessary to raise more cash than it once would have ever dreamed possible — and with minimal dilution of its shareholders. And this will permit Tesla to put the pedal to the metal on growth.

How fast can Tesla grow, and what does it mean to shareholders? Morgan Stanley estimates that from now through 2030, every 1 million cars Tesla sells will generate approximately $50 billion in revenue for the business, $10 billion in earnings before interest, taxes, depreciation, and amortization (EBITDA), and add $150 to $200 per share in value to the stock.

In short, because Tesla has passed $1 trillion in value … its stock is now only going to go higher. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Tesla stock revved even higher on Tuesday appeared first on The Motley Fool Australia.

More reading

• Why is the Liontown (ASX:LTR) share price roaring 5% higher today?
• Why ASX 200 tech shares are leading the charge higher today
• Why ASX lithium shares are surging higher on Tuesday
• Core Lithium (ASX:CXO) share price jumps as project construction begins
• Tesla stock price rally places it in the trillion-dollar club

Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Tesla. 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.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Appen Ltd (ASX: APX) share price has been well and truly out of form in 2021.

Since the start of the year, this tech company’s shares have fallen almost 57% to $11.10.

What’s happening?

Appen has been going through a difficult spot this year due to COVID-19 putting a dampener on demand for its services from some of its biggest customers. These have included many of the biggest tech companies in the world such as Google, Microsoft, and Facebook.

However, while the short term has been underwhelming, especially compared to the explosive growth we have all become accustomed to, its long term future remains very positive.

This is due to the company’s exposure to the artificial intelligence (AI) and machine learning markets as a leading developer of high-quality, human annotated datasets. These datasets are critical to the development process for AI models.

Is AI the real deal?

AI gets hyped up a lot, but there’s a very good reason for this. Many experts believe it will be the key driver of the global economy in the future.

One of those is the team at PWC, which called it a US$15.7 trillion game changer.

A recent report comments: “Artificial intelligence (AI) can transform the productivity and GDP potential of the global economy. Strategic investment in different types of AI technology is needed to make that happen […] Our research also shows that 45% of total economic gains by 2030 will come from product enhancements, stimulating consumer demand. This is because AI will drive greater product variety, with increased personalisation, attractiveness and affordability over time.”

Is the Appen share price in the buy zone?

One leading broker that sees a lot of value in the Appen share price at the current level is Citi.

According to a recent note, its analysts have retained their buy rating and $17.10 price target on its shares.

Based on the current Appen share price, this implies potential upside of 53% for its shares over the next 12 months.

This could make its shares dirt cheap if Citi is on the money with this one. Time will tell.

The post Is the Appen (ASX:APX) share price dirt cheap? appeared first on The Motley Fool Australia.

More reading

• These were the best performing ASX 200 shares last week
• Why has the Appen (ASX:APX) share price leapt 18% in a week?
• 3 punished ASX shares that could come roaring back
• Analysts name 3 excellent ASX growth shares to buy
• Why ASX 200 tech shares have outperformed today

Motley Fool contributor 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 has recommended Appen Ltd. The Motley Fool Australia owns shares of and has recommended Appen 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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The Wisr Ltd (ASX: WZR) share price slipped on Wednesday morning, despite the company announcing a record first-quarter performance.

At market open Wisr shares dropped 3.64% to 26.5 cents. They have since regained some of that loss, at the time of writing down 1.82% to 27 cents.

First quarter highlights

Wisr delivered a record performance across key operating metrics. Some key highlights include:

• Record operating revenue of $12.1 million, up 195% on Q1 2021 and up 25% on Q4 2021
• Record loan originations of $132 million, up 113% on prior corresponding period (pcp)
• Total loan originations of $743 million, up 142% on pcp
• Wisr Financial Wellness Platform surpassed 505,000 profiles, up 70% on pcp

In July, Wisr launched a major national brand campaign – For your smart part – to support its brand redesign.

The campaign was a broadcast and digital sponsor of the Tokyo Olympic Games with Seven West Media Ltd (ASX: SWM).

Metrics post-campaign have shown that Wisr was able to reach an astonishing 16.5M Australians, significantly exceeding expectations and Wisr’s expected return on investment.

The company said that the strong campaign helped it achieve the 500,000 profile target a quarter ahead of internal expectations.

The brand campaign drove a big jump in expenses, with a Q1 2022 cash earnings before tax, depreciation and amortisation (EBITDA) loss of $5.5 million compared to a $1.6 million loss in Q4 2021.

Management commentary

Looking ahead, Wisr CEO Anthony Nantes is optimistic about easing restrictions and what that means for consumer financing.

We expect to see increased demand in the personal finance market as lockdown restrictions start to lift and consumer demand naturally rises in the personal loan categories that had been impacted by COVID-19, creating a strong tailwind for us as we head into 2022.

With two Wisr Warehouse facilities in operation and ready to drive significant, sustained growth, we’re in an incredibly strong position to push through our medium-term target of a $1B loan book, accelerate our revenue, path to profitability and operating leverage into H2 and beyond.

Wisr share price snapshot

The Wisr share price has rallied 38% year to date. This is following an impressive growth trajectory of 21 consecutive quarters of revenue growth.

The post Wisr (ASX:WZR) share price slumps 4% despite record quarter appeared first on The Motley Fool Australia.

More reading

• Wisr (ASX:WZR) share price edges higher on another record quarterly result

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Estrella Resources Ltd (ASX: ESR) share price is rocketing after the company announced the discovery of massive nickel-copper sulphides.

At the time of writing, the junior exploration company’s shares are fetching for 4.3 cents, up 19.44%.

Estrella hails nickel-copper sulphides discovery

According to its announcement, Estrella advised that it has intersected a new zone of massive nickel-copper sulphides at Broonhill in Western Australia. This follows the discovery of a 12-metre zone of nickel-copper sulphides including 2-metres of basal massive sulphides.

Estrella stated that reverse circulation (RC) drill hole CBP076 bears all the hallmarks of the 2019 RC hole CBP043. The latter recorded 8 metres of 1.11% of nickel and 0.36% of copper, which led to the T5 Discovery (1.4 kilometres north of Broonhill).

As a result of the latest findings, CBP076 will be cased for downhole geophysics and ahead of diamond drilling. This is expected to commence once the downhole geophysical results have been interpreted.

It’s worth noting that the RC program still has another 2 kilometres of highly prospective basal contact yet to explore. The area has had no historical drilling specifically targeting sulphides on the basal contact.

Estrella managing director Chris Daws commented:

We are extremely excited with the CBP076 intersection of massive nickel-copper sulphides on the contact, which is reminiscent of the intersection achieved by CBP043 in 2019.

It was this historic hole that led the Company to drill and locate the T5 massive sulphides at depth, so we are particularly encouraged by what may come of this find.

In addition, the intersection of further nickel-copper sulphides in an area which already hosts the historic Carr Boyd mine and our T5 Discovery illustrates the significant potential of this region for discoveries.

About the Estrella share price

It has been a disappointing 12 months for Estrella shares, plummeting by more than 71% for the period. Year-to-date, its share price has lost 35%.

Estrella presides a market capitalisation of roughly $50 million and has approximately 1.16 billion shares on its books.

The post Estrella Resources (ASX:ESR) share price jumps 19% on massive nickel discovery appeared first on The Motley Fool Australia.

More reading

• Is the Appen (ASX:APX) share price dirt cheap?
• Wisr (ASX:WZR) share price slumps 4% despite record quarter
• Why the Telstra (ASX:TLS) share price is surging higher today
• Need a COVID test? Now you can buy one at Coles (ASX:COL) or Woolies
• Woolworths (ASX:WOW) share price slides after Q1 earnings update

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Telstra Corporation Ltd (ASX: TLS) share price has been a strong performer on Wednesday.

In morning trade, the telco giant’s shares are up 3% to $3.91.

This means Telstra’s shares are now up 30% in 2021.

Why is the Telstra share price rising today?

Today’s strong gain by the Telstra share price appears to have been driven by a positive reaction from brokers to its Digicel Pacific acquisition this week.

For example, in response to the news, the team at Morgans retained their add rating and lifted their price target on the company’s shares to $4.55.

Based on the current Telstra share price, this implies potential upside of just over 16% for investors.

In addition, with Morgans forecasting a 16 cents per share fully franked dividend in FY 2022, the total return on offer with Telstra’s shares increases to ~20%.

What did the broker say about the acquisition?

Morgans was pleased with the acquisition of Digicel Pacific. And while it wasn’t surprised with move, given ongoing media speculation, it was pleasantly surprised with the way the deal was structured and sees it as a positive for the Telstra share price.

It commented: “Telstra will acquire 100% of PNG mobile operator Digicel. Given ongoing media speculation, this deal isn’t a surprise. However, the financial structure is smarter than we had anticipated. TLS is effectively guaranteed a six-year payback on its US$270m equity contribution with the Australian Government insuring the risks.”

The broker expects the deal to be both earnings per share and free cash flow per share accretive over the first six years. This has led to Morgans increasing its forecasts to reflect this.

“We forecast ~3.5% EPS accretion and ~7% FCF per share accretion for the first 6 years (under protected status). Then payments to government equity kick in,” it added.

All in all, this could make the Telstra share price one to consider right now.

The post Why the Telstra (ASX:TLS) share price is surging higher today appeared first on The Motley Fool Australia.

More reading

• Broker gives its verdict on the Telstra (ASX:TLS) share price following Digicel acquisition
• 5 things to watch on the ASX 200 on Tuesday
• These 3 ASX 200 shares are topping the volume charts this Monday
• Why Beach, Mineral Resources, Origin, and Telstra are storming higher
• ASX 200 (ASX:XJO) midday update: Telstra’s acquisition, Mineral Resources jumps

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Corporation 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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While the Coles Group Ltd (ASX: COL) share price is down, there is news that may excite shareholders in it or Woolworths Group Ltd (ASX: WOW).

From 1 November, both supermarket giants will begin selling at-home, rapid antigen testing (RAT) for COVID-19.

At the time of writing, shares in Coles are trading for $17.16 – down 2.05%. Meanwhile, the Woolworths share price is 4.10% lower to $38.81. To be clear, there is no suggestion today’s news on RAT has any correlation with the share price movement. In fact, for Woolworths, today was also the day the company released its Q1 update.

Let’s take a closer look.

It’s going to be easier to get a COVID test

After the Therapeutics Goods Administration (TGA) approved the use of at-home RAT last month, Coles and Woolworths have announced they will sell the product in their stores from 1 November. This is the date the TGA is slated to begin using these tests.

According to the Australian Broadcasting Corporation (ABC), Woolworths said the kits could already be pre-ordered and would sell for between $10 and $15 per test.

“Rapid antigen testing is helping protect our distribution centre team members across Australia from COVID-19,” a Woolworths spokesperson told the outlet.

While less accurate than PCR testing (the one done at COVID testing clinics), the results are quicker to obtain and it is easier to do. It only requires a person to provide a small sample of saliva, and then results would be ready in 20 minutes.

Coles says it will sell the product in select stores in every state except South Australia and Western Australia.

These new products may give a boost to the supermarket’s revenue. Revenue, of course, can determine how much dividends a company pays. The amount of dividends Coles pays is highly likely to influence the Coles share price.

Coles share price snapshot

Over the past 12 months, the Coles share price has increased 0.29%. Year-to-date, shares in the supermarket are down 7.24%. It is underperforming the ASX 200 when compared to both timeframes.

Since listing on the ASX nearly 3 years ago, shares in the company have appreciated 35.5%. Coles has a 52-week high of $18.94 and a 52-week low of $15.27 per share.

Coles Group has a market capitalisation of approximately $23 billion.

The post Need a COVID test? Now you can buy one at Coles (ASX:COL) or Woolies appeared first on The Motley Fool Australia.

More reading

• Woolworths (ASX:WOW) share price slides after Q1 earnings update
• 5 things to watch on the ASX 200 on Wednesday
• Own Coles (ASX:COL) shares? Here’s the retailer’s latest push for supremacy
• Leading brokers name 3 ASX shares to sell today
• 2 blue chip ASX dividend shares rated as buys

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended COLESGROUP DEF SET. 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 Woolworths Group Ltd (ASX: WOW) share price is falling in early trading as the retail conglomerate reported its Q1 FY22 earnings for the 14 weeks ended 3 October 2021.

Woolworths shares are now changing hands at $38.83 apiece, a 4.05% decrease from yesterday’s close.

Here we dissect the company’s first-quarter performance and see how it might be affecting the Woolworths share price.

Woolworths share price slides despite 50% spike in e-commerce sales

In its first quarter of FY22, Woolworths recognised several investment highlights, including:

• Group sales from continuing operations of $16.07 billion , a 7.8% year on year gain
• Group e-commerce sales of $1.879 billion, a gain of 53.5% from the year prior
• BIG W sales decrease of 17.5% year on year to $920 million
• Australian business-to-business (B2B) revenue growth of 196.4% compared to the same time last year, climbing from $321 million to $952 million
• New Zealand food sales up 13% year on year to $1.96 billion

What happened in Q1 for Woolworths?

The retail giant’s operations saw a net benefit from consumer spending patterns in lockdown as more purchases came through its e-commerce sales channel this quarter compared to the same time last year.

For instance, e-commerce sales of $1.879 billion is a sizeable 54% year on year increase for Woolworths. This coincided with more customers making at-home purchases during prolonged lockdowns in NSW, Victoria and New Zealand.

Food sales in Australia grew around 4% year on year whereas New Zealand food sales grew 9.7%. That’s a significant step above the group’s 2-year growth average of 8.7% in this segment.

This enabled a “record sales penetration of 12.4%” in this segment. This has since levelled as lockdowns begin to wind back.

Offsetting this strength, however, was the lockdown impact on BIG W’s earnings. It saw a year on year sales decrease of almost 18%, or around $200 million.

A flurry of store closures and additional trading restrictions, even when out of lockdown, also had an impact on BIG W’s performance, according to the company.

As such, the Group’s COVID-19 related costs came in at $102 million, or around 0.6% of total sales. Those expenses included “additional hygiene, testing, team and supply chain costs”.

Another key takeout from Woolworths’ performance this quarter was the growth in its B2B operations which saw tremendous expansion of more than 196% this quarter.

In fact, B2B sales grew from $321 million to $952 million in the 12 months to October 2021, supported by B2B e-commerce growth of more than 53% in the same time.

Aside from its financial performance, the company also saw a reasonable uptick in the number of Everyday Rewards members on its books to 13.3 million.

That’s a 5.5% increase over the year. This carried over to see “scan rates [of member cards] increasing to 54.7% of all transactions”. At the same time, weekly Everyday Rewards app users doubled compared to Q1 FY21.

What did management say?

Speaking on the announcement, Woolworths CEO Brad Banducci said:

Q1 F22 has arguably been the most challenging COVID quarter for our business, with the Delta variant causing major disruptions to our supply chain and stores, especially in NSW and Victoria. I again want to thank our extended team for their incredible efforts under very trying circumstances, and our customers, for their understanding and support.

What’s next for Woolworths?

Looking into the future, Banducci added:

As we look ahead, we will continue to prioritise the health, safety and wellbeing of our team and customers. The vaccination roadmap announced last week is an example of this commitment. Our focus is now firmly on Christmas and the festive season more broadly. While the outlook remains uncertain, and there is likely to be challenges in the weeks ahead, we are excited about helping our customers celebrate a much needed festive season in an inspirational, safe and enjoyable way.

The Woolworths share price has climbed more than 15% in the past 12 months, after gaining around 13% since January 1 this year.

The post Woolworths (ASX:WOW) share price slides after Q1 earnings update appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Leading brokers name 3 ASX shares to sell today
• Why is the Woolworths (ASX:WOW) share price underperforming Coles lately?
• Own Woolworths (ASX:WOW) shares? Here’s why the company is in the news
• Why this supermarket is outperforming the Woolworths (ASX:WOW) share price lately

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Vulcan Energy Resources Ltd (ASX: VUL) share price is halted this morning after the lithium explorer’s stock is featured in a scathing report by activist investors.

J Capital Research is an activist market research organisation. It notes it’s “usually on the short side”. J Capital’s website also reads: “We do our best to find and present facts, based on extensive primary research, but we will profit if these stocks decline.”

Overnight, it launched a damning report on Vulcan, claiming the company is misleading the market on the viability of its Zero Carbon Lithium business.

At the time of writing, the Vulcan share price is on pause at $14.99.

Let’s take a closer look at today’s claims.

Scrutiny facing ASX lithium explorer

ASX lithium explorer Vulcan Energy has requested to halt its share price amid claims its cornerstone project’s pre-feasibility study was based on misleading information.

Vulcan responded to the report, saying its claims are inaccurate. The ASX lithium explorer also stated:

It is clear the report is merely an attempt to profit from “shorting” Vulcan.

J Capital Research alleges that Vulcan’s Zero Carbon Lithium project’s assumed flow and recovery rates are “unrealistically high”.

The project’s pre-feasibility study assumes it will see a flow rate of between 100 litres and 120 litres per second. However, J Capital says other projects in the area have flow rates of 8 litres to 80 litres per second.

Additionally, Vulcan believes the project will have a recovery rate of 90%.

J Capital thinks the project’s flow rate will likely be around 70 litres per second with a 70% recovery rate.

The publication believes that would see the amount of lithium expected to be extracted from the project nearly halved.

It also claims the independent consultants who provided the pre-feasibility study data were either owned by Vulcan’s senior management or were acquired soon after the study.

Finally, the publication alleges the company has downplayed community opposition to the Zero Carbon Lithium project. It states the community’s disapproval is a large and unaddressed risk facing the project.

J Capital has also published reports on Nearmap Ltd (ASX: NEA) and WiseTech Global Ltd (ASX: WTC) in the past.

The post Why is this ASX lithium explorer being targeted by activist investors? appeared first on The Motley Fool Australia.

More reading

• Could the Vulcan Energy (ASX:VUL) share price hit $22 by the end of 2021?
• Which ASX 300 shares are leading the way on Monday?
• Why MyDeal, Senex, Superloop, and Vulcan shares are surging higher
• Why the Vulcan (ASX:VUL) share price is jumping 11% on Monday
• Why the Vulcan (ASX:VUL) share price is in a trading halt

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Nearmap Ltd. and WiseTech Global. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. and WiseTech Global. 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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