Market Report: Tesla order gives David Lenigas' lithium miner a lift

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Striking a supply deal with electric car-maker Tesla is the holy grail for lithium miners.

So when two AIM-listed lithium explorers conditionally signed up Elon Musk’s group as their first customer, their shares soared.

Rare Earth Minerals revved up 0.22p or 24% to 1.12p and Bacanora Minerals raced 17.5p or 25% higher to 88.75p.

It was thought that Wall Street darling Tesla would only source the lithium hydroxide needed for its car batteries in Nevada, where it is building its “Gigafactory”, but it looks as though it has set its sights further afield.

Tesla claims that by 2020 the giant battery factory will be at full capacity and will produce more lithium ion batteries annually than were made in the whole of 2013 worldwide.

Rare Earth Minerals and Bacanora are developing the Sonora Lithium project in Mexico but it is still several years from production so the deal is conditional on a number of factors.

So who’s behind the companies? None other than Gatwick Gusher tycoon David Lenigas, who called it a “landmark transaction” and hopes this will kick-start a number of deals with other clients.

Shore Capital analyst Yuen Low said: “We view this agreement as an important step in the commercialisation of Sonora and we expect it will make raising the funds for its construction very much easier.”

Brent crude’s rebound to around $47 (£31) a barrel helped Shell up 26p to 1685.5p and BP up 1.55p to 352.75p.

The FTSE 100 though was relatively flat, down 1.59 points to 6190.44, with low trading volumes ahead of the Bank Holiday weekend.

Dealers were wary that a big shift from the Dow on Monday — when markets here are shut — could see them lose big, hence the tentative trading.

Tesco, down 2.65p at 188.8p, was the biggest blue-chip casualty on reports it plans to pocket a $844 million dividend from Homeplus to cut the asking price in the sale of its Korean arm.


Satellite operator Inmarsat rose 6.5p to 942p as it launched its third satellite in its £1 billion plan to offer customers access to faster internet.

Equipment rental firm Lavendon Group bucked the industry trend as its shares jumped 14.74p to 180.74p on strong half-year results.

UTV Media, which owns TalkSport and whose presenters include Colin Murray, shrugged off heavy losses from its fledgling Irish TV business to rise 2.72p to 170.72p.

Bullish comments from Panmure Gordon encouraged traders to gobble up shares in online takeaway specialist Just Eat, 4.6p richer at 389.4p.

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August 29, 2015 |
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