AMVMF - AMG Critical Materials: Stronger Than Ever In The Lithium Bear Market

2024-05-23 17:46:04 ET

Summary

• AMG's share price has declined -57% since mid 2023 due to the negative development of lithium prices (-81% from its peak).
• The market has had a dramatic reaction to lower lithium and vanadium prices, but the company seems to be executing really well, despite the circumstances.
• In 2025 we can expect growth in the lithium division due to a +44% production capacity expansion and AMG's lithium hydroxide refinery's first 20,000-ton module coming online.
• Within 5 years or less, AMG believes it can book $500 million EBITDA. That means it is now quoting at 2x its EV/EBITDA prospects.
• Due to its strong liquidity position (almost $600 million) and growth prospects, AMG might be the best way to play a potential rebound of the lithium and vanadium market.

Introduction

AMG Critical Materials ( AMVMF ), also known as AMG, plays a crucial role in the production and processing of critical rare earths. No less than 11 materials, out of the 34 that are considered “critical” by the EU, play an important role in AMG's activities.

AMG has an interesting ESG-profile, as its activities are reducing millions of tons of CO2 per year. In 2023, its activities had a positive impact of 110 million tons on global CO2 emissions. That is the equivalent of 30 million gasoline passenger cars driving around for 1 year.

So how does AMG do this? Well, for example, it ensures that lighter materials can be used in the aviation and automotive sectors thanks to its process technologies. AMG is also the world's largest recycler of vanadium-containing refinery waste....

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