Pioneering English Channel Test Flight Reveals Take off for This Resource

Ever since the 1950s humans happen to be flying over the world in planes with jet engines.

That might be coming to an end sooner than you think. Electrical flight is now so sophisticated that a plane powered electrically is less than three years away from production.

The technology behind this is going to run for years…and will almost certainly take one key resource with it.

In case a person didn’t see the story, large European manufacturer Airbus has a 2 seat airplane called the At the Fan. A test pilot travelled it over the English Channel in July.

It’s a model, but already Airbus has the day for production and commercialization after 2017.

Here’s why this matters…

Lithium-ion electric batteries allow the plane to travel. Admittedly, not far yet. However the Economist had this to say last week…

‘Lithium-ion ones allow the E-Fan to fly for about an hour with a 30-minute reserve. That may be fine for a flying training, but not for a passenger airliner. Electric batteries, though, are steadily enhancing and, because aircraft possess long service lives (the Boeing 747 first flew in 1969), aerospace engineers work on projects set nicely into the future.’

Lithium ion battery usage is expected to increase dramatically with the electrification of transport. There is a good chance you already use lithium batteries in your mobile phone, laptop and many other devices.

But the monumental demand for more lithium will come from electric transport and residential batteries for solar panels. Which has lithium on the brink of a boom that supply can no longer keep up with need.

Tesla’s gigafactory has plans for lithium electric battery production on an astonishing scale. Tesla is planning to produce more lithium-ion batteries in this one factory than the entire world combined.

Chris Reed, managing director of Neometals [ASX: NMT], sees the electrification associated with transport as a megatrend, and made the next decision:

He’s divested his company of other commodities to focus only on lithium and titanium production.

Neometals includes a market cap of $95 zillion and trades for 20 cents. It’s an explorer focusing on becoming a producer of lithium battery supplies. The company is forecasting lithium electric battery production to almost triple over the next 5-7 years.

The most common lithium compound used in making lithium batteries is lithium carbonate. However lithium hydroxide is replacing this. It results in a far better battery.

The US and Canadian government authorities are spending millions toward lithium hydroxide plants. Premium electric vehicle manufacturer TESLA motors has opted to use lithium hydroxide for their batteries.

This offers Neometals well placed as it has trademarked a low cost technology for lithium hydroxide digesting. That sounds exotic and strange. It simply enables the company to produce the high quality lithium hydroxide which batteries require.

That should provide the company an edge. It’s all area of the incredible tech breakthroughs we keep reminding our Cycles, Developments and Forecasts readers about as frequently as possible. There’s opportunities as well as development happening all over the world. You can see how to take advantage of that here.

Even better for Neometals, the US dollar lithium prices are strong and the low Aussie dollar is helping them tremendously.

But what is the chart telling you?

Neometals Limited daily chart

Source: STEX

This company listed in Dec last year.

You can you see how it trades below 4 pennies and just goes sideways through January through to March. Then in early April it broke over four cents and quickly made a run to a top of 11 and a half pennies.

It’s possible as an independent investor to catch breaks like that in stocks like these. Again, are you able to see from the chart that from early August a person already knew good news was coming?

It broke over the higher it made April. Begin to see the line we’ve put in the chart.

They say you can’t forecast markets, but you can broadly know what’s coming for a stock, if you can read a chart that is. The market understood good news was coming.

The stock price did make a significant low on August 25. This had little to do with NMT as a company along with a business.

It was the 12.5 % plunge of the Dow jones Jones in the US.

That’s history right now. What now?

Well the company launched news on September 21.

A new resource estimate on their Mount Marion Project reveals the 60% increase in contained Lithium.

You can see the price has run up into the announcement.

This is where charting analysis gets important. The fundamentals for Neometals as well as lithium looked good.

But we industry the charts, not the story.

And you just have to be just a little bit cautious now in terms of buying.

If you are already holding NMT shares, you could do this your own risk analysis and choose if you should sell.

That is not to point out that NMT won’t go higher. It’utes just that the high of 22 and a 1/2 cents is likely to a short term top.

The market may at times move quickly, and increases don’t mean a thing until they’re in the pocket.

Good buying and selling.

Regards

Terence Duffy and Callum Newman

From the Port Phillip Publishing Library

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