Kodal Minerals shares have sunk since the lithium miner announced the completion of the funding from their Chinese financing partner.

The recent sell-off was a classic ‘buy the rumour, sell the fact’ trade and is typical of mining companies securing financing and entering a phase of no news and little development.

Kodal Minerals lacks any catalysts for a meaningful re-rate in the short and medium term. Financing has been secured, and the mine will be built.

All Kodal investors really have to look forward to over the next year is possible announcements on issues and challenges with mine construction. This should be expected, and shares will react accordingly.

Those investors with a propensity for higher-risk junior mining exploration companies have plenty of other companies on AIM to choose from that have announced promising early-stage results and are further evaluating their assets. Kodal investors are jumping ship to pursue these opportunities.

In addition, the current circa £100m valuation seems fair given the value attributed to their Bougouni project and the work required to bring it into production.

The $100m acquisition of a 51% stake in the newly incorporated UK subsidiary holding the Bougouni lithium project naturally infers Kodal’s stake is worth a little under $100m.

Of course, this will change should lithium be produced as planned.

Kodal does have other mining assets, but these are of little value.

Looking to the future and to comparisons with peers producing lithium at meaningful volumes, there is plenty of opportunity for the Kodal share price to increase to match peer group valuations.

However, there is a long road ahead to achieving material production from the Bougouni project. Only at this point will Kodal be attributed the valuation other junior lithium miners command.

Horizonte Minerals announced multiple changes to its board and senior leadership on Monday as it worked to finance the construction of its Araguaia nickel project.

CEO Jeremy Martin, CFO Simon Retter, Non-Executive Interim Chair William Fisher, and Non-Executive Director Owen Bavinton will step down from their roles and the board.

The departures come as the company scrambles to secure financing to complete the flagship nickel project after announcing a material shortfall in the initial estimates of how much it will cost to get the project to production.

Founding CEO Jeremy Martin led Horizonte’s acquisition of two Brazilian nickel assets and oversaw feasibility studies and initial project construction. Martin was instrumental in progressing the asset to construction during his 12-year tenure as CEO.

CFO Simon Retter is also leaving the board after serving alongside directors Fisher and Bavinton since 2011. Horizonte said all departing board members and officers will aid leadership transitions.

The company said the changes are intended to support ongoing financing discussions to finish constructing Araguaia. The departures are likely the result of external pressures on the company from those considering financing options. Indeed, the Managing Partner and Co-Chief Investment Officer of one of Horizonte’s major shareholders has stepped in as interim CEO to find replacements.

The term ‘rats fleeing a sinking ship’ also comes to mind, but it seems cruel given the excellent work the team did in getting the project to the stage they did before the recent financing woes came to light.

The commodity-heavy FTSE 100 slipped on Monday as miners dragged the index lower following further concerning developments in the Chinese property sector.

The FTSE 100 was down 0.3% at the time of writing.

“Renewed worries about the outlook for the Chinese economy caused tremors across global markets at the start of the new trading week. There was a slowdown in China’s industrial profit growth during October, causing markets to speculate its government will have to come up with yet another stimulus measure to avoid the economy spluttering,” says Russ Mould, investment director at AJ Bell.

“Shares in mining companies tend to slip back whenever there are concerns about China, given it is a major consumer of commodities. True to form, the big mining stocks were in the red on Monday.

“BHP dropped 1.1%, Anglo slipped 0.9%, Rio Tinto fell 0.6% and Glencore retreated 0.4%. A 0.9% drop in the Brent Crude oil price to $79.83 pulled down BP and Shell. Prudential’s focus on Asia also saw its shares caught up in the sell-off, down 0.7%.”

The problems with China’s property market do not want to go away. This may cause problems for London’s leading index through 2024.

The FTSE 100 is heavily weighted towards China, and the index’s direction is more often than not driven by Chinese economic data and developments in the property market.

High-profile problems with Chinese property giants Evergrande and Countrywide have proved to be the beginning of a rumbling crisis for Chinese property companies that is souring commodity markets and general investor sentiment.

“China’s property sector troubles look increasingly intractable as one of its huge lenders is now mired in a criminal investigation after declaring insolvency,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“The real estate boom has turned into a slow motion bust, with companies facing spiralling debt problems, and malaise seeping deeper into the financial sector.  Authorities are probing illegal crimes at Zhongi Enterprise Group, which saw the value of its assets collapse as property prices have spiralled downwards. The latest twist in this sorry property tale of super-speculation is likely to hurt wider confidence further, as it burrows deep into household perceptions of wealth.”

Although China dragged the FTSE 100 on Monday, the losses were contained, suggesting investors are becoming conditioned to poor news from China and the slower Chinese economy is largely priced into markets.

Rightmove

Rightmove was top of the FTSE 100 leaderboard on Monday after the property portal shook off a slowing UK property to lift their guidance on key revenue metrics.

“The momentum that we reported in July has continued through the third quarter and beyond,” Johan Svanstrom, CEO of Rightmove, said.

Russ Mould explained the benefits of Rightmove’s business model and the resilience its displays during tougher market conditions; “It has long been argued that Rightmove could do well in both good and bad market conditions.”

“When times are good, it benefits from a steady flow of properties being advertised on its portal. During tougher times, estate agents and home developers need to work harder to attract potential buyers and that means spending more on advertising.”

Rightmove shares were 5% higher at the time of writing.

Swedish battery maker Northvolt is reportedly gearing up for an IPO as it plans to build more gigafactories across Europe to meet the burgeoning demand for electric vehicle batteries and renewable energy storage.

According to reports by the Financial Times, the company could be worth $20bn on listing.

Northvolt is a leader in lithium battery production but made the headlines recently when it announced the development of sodium-ion batteries.

Why is the Northvolt IPO important?

Swedish unicorn Northvolt is one of the world’s largest battery manufacturers and counts companies such as BMW, Fluence, Scania, Volvo Cars and Volkswagen Group as their clients.

The group has received over $55 billion in orders since it was founded in 2016 and employs 5,000 people across Sweden, Germany, Norway, Poland, Portugal, the US and Canada.

The Northvolt IPO is important because it will demonstrate investor appetite for electric vehicle and renewable power storage technology at a time when the pace of growth in EV sales is starting to slow, and major wind projects are canned.

The anticipation around the Northvolt IPO ratcheted up a notch or two last week after the company announced the development of 160 watt-hours per kilogram sodium-ion batteries designed for low-cost energy storage across India, the Middle East and Africa.

Peter Carlsson, CEO and Co-Founder of Northvolt, said, “the world has put high hopes on sodium-ion, and I’m very pleased to say that we’ve developed a technology that will enable its widespread deployment to accelerate the energy transition.”

“It’s an important milestone for Northvolt’s market proposition, but battery technology like this is also crucial to reach global sustainability goals, by making electrification more cost-efficient, sustainable and accessible worldwide.”

Northvolt Sodium Batteries

Northvolt has developed a sodium-ion battery free from nickel, cobalt, graphite, manganese, and, significantly, lithium.

Northvolt’s breakthrough sodium-ion batteries are based on hard carbon anodes and Prussian White cathodes. Prussian White is made from sodium, iron, nitrogen and carbon.

The absence of lithium and other critical metals will reduce reliance on China and make battery storage for renewable power much cheaper.

Sodium-ion batteries can be made using locally sourced materials instead of expensive imported critical metals, lowering overall cost.

The company is still a way off commercialising batteries for use in electric vehicles. Still, as soon as the energy density is improved, some hope sodium batteries will overtake lithium in electric vehicle applications.

Northvolt is not the only company developing sodium-ion technology. Chinese EV maker CATL and London-listed AMTE Power are among many companies working on their own sodium power storage solutions.

When will Northvolt IPO?

No date has been set for the Northvolt IPO, although it has been widely reported the company is eyeing 2024 for their listing.

The Financial Times reported a person familiar with the matter said: “they want to be ready to go, whenever the market conditions are right. They want everything in place.”

IPOs of any size take time to prepare, and the company will want to wait for more favourable market conditions.

Rightmove was the FTSE 100’s best performer in early trading on Monday after the property portal said they were increasing guidance for key revenue metrics as new products show signs of promise.

The UK’s largest property portal now expects average revenue per advertiser (ARPA) to hit £112-116, exceeding previous guidance of £103-£105. The upgrade comes as overall revenue growth continues tracking ahead of expectations at 8-10%.

Rightmove shares were 5% higher at the time of writing.

Demand from new home developers for Rightmove’s advertising products has driven the majority of ARPA growth. Estate agents continue to use mix of Rightmove’s branding and lead-generation offering.

Despite broader uncertainty in the housing market, Rightmove’s market share and network effect continue to support growth. Underlying operating profit is now seen climbing 7-8% for the year.

The portal’s resilient performance has been seen since amid issues weighing on the property market, and investors will be encouraged by the upgrades to ARPA even as UK transactions slip.

Rightmove was also upbeat on non-core activities like commercial real estate. The group’s fledgling mortgages remains on track to meet targets and last week saw the launch of Rightmove’s first mortgage broker offering.

Johan Svanstrom, CEO of Rightmove commented on the results:

“The momentum that we reported in July has continued through the third quarter and beyond. The strength of our performance against an uncertain market backdrop demonstrates the strength of the UK consumer affinity to our platform, the value of the established network effect of our business model, the depth and richness of our consumer data, and the value that our customers place in our products to build their businesses.”

“It also illustrates the resilience of our business model in all phases of the property market cycle. We continue to look to the future with confidence and remain focused on the delivery of our strategic plans, both in our core business and in strategic growth areas. We look forward to providing more detail at this afternoon’s investor day about our plans to capitalise on the significant growth opportunities ahead.”