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What’s behind the rise and fall of Clean TeQ Holdings Limited shares

Manganese Mining

Clean TeQ Holdings Limited (ASX: CLQ) shareholders collected big gains from a company that looked set to cash in on rising demand for cleaner energy sources.

As governments around the world pledged to tackle pollution concerns through various measures in 2017, such as increasing incentives for the uptake of electric vehicles, the hopeful miner of key battery making ingredients watched its share price skyrocket.

In early 2015, Clean TeQ’s shares were trading for about 6 cents but had climbed above $1.60 towards the end of 2017, representing a gain of more than 2,550% over that period.

Clean TeQ’s shares have since tumbled and are now going for about 58 cents.

What happened?

The simple answer is: not much.

There have been reports of cost blowouts or complications with offtake agreements but essentially it appears that Clean TeQ has proved it is a company whose share price is highly susceptible to the whims of the news cycle.

Clean TeQ said its mission was to produce metals that “are highly geared to disruptive changes in technologies and markets, particularly in global energy and transport”.

The company said it was focussed on nickel and cobalt, key battery making ingredients, and planned to build one of the biggest cobalt mines in the world.

But Clean TeQ’s shares have been trading for more than 10 years with the company yet to turn a profit.

Clean TeQ reported a loss exceeding $12 million for FY17 which followed the company’s loss of about $6.5 million for FY16.

It’s difficult to tell when, or if, Clean Teq will start turning a profit and allow investors a clearer picture by which to evaluate the company with a market cap of around $460 million.

As such, if you’re looking for exposure to companies that are positioned to profit from rising demand for cleaner energy sources, it would be better to consider companies such as  Galaxy Resources Limited (ASX: GXY) or Orocobre Limited (ASX: ORE).

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Motley Fool contributor Steve Holland has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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