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Board Interview: Rock Tech – Going According to Plan

Dirk Harbecke about why shares of Rock Tech are a good investment
published online at Börse Global

Despite good substantial news, the stocks of the German-Canadian company are not gaining momentum. CEO and Chairman Dirk Harbecke on the reasons and the operational progress of Rock Tech Lithium.

Börse Global: A positive feasibility study on the deposit in Georgia Lake, an equally positive project study on the lithium converter in Brandenburg and the submission of the second comprehensive partial permit for the converter. And the stock hardly reacts at all. How do you explain that?

Dirk Harbecke: Although the general climate on the financial markets has improved in recent weeks, there is still an immense risk aversion. Since Rock Tech has not yet started production with either the deposit in Georgia Lake or the converter in Guben, its shares are regarded as risky. The stock market always tends to exaggerate, upwards or downwards. Currently the latter is the case.

Börse Global: Can you prove that?

Dirk Harbecke: An example. We submitted the first partial permit for the construction of the converter in Guben on 22 February 2022. This involved buildings, roads and the basic infrastructure. In the four weeks that followed, the share price rose by almost half, even though the Russian invasion of Ukraine started two days after the submission.

Now, on 16 November, we submitted the second partial permit, which is much more comprehensive and includes the construction of the main converter parts. And what is the stock doing? It is not reacting at all. That shows how the sentiment towards alleged risk investments has turned.

Börse Global: But it is also a fact that both the deposit in Canada and the converter in Germany are not scheduled to go into production until 2025.

Dirk Harbecke: That is correct. But we have made enormous operational progress in the past months. For example, the Pre-Feasibility Study on our mine, which we announced in mid-November, underpins our earlier technical studies. With a pre-tax net present value of the project of US$223 million, this deposit alone is worth significantly more than Rock Tech Lithium’s current stock market value. That doesn’t add up at all.

Börse Global: Rock Tech also recently published a study on the converter.

Dirk Harbecke: This is a detailed project study (BPS) on financing and planning. One of the main results was the significant improvement in the economic viability of the converter compared to the previous technical study. The BPS forms the basis for financing discussions with lenders. The study estimates the net present value of the project at 1.2 billion US dollars.

Börse Global: How is the currently extremely high inflation taken into account?

Dirk Harbecke: The BPS calculates with a discount rate of eight per cent per year in the next few years. According to my personal assessment, inflation may remain high in the next few years, but we have priced that in with the eight per cent – simply because of the base effects for commodities. But I think it’s good to have a buffer built into the BPS.