Why the Magnis Energy (ASX:MNS) share price is on a wild ride today

The Magnis Energy Technology Ltd (ASX: MNS) share price is bouncing today after news the company's subsidiary has fully funded its lithium-ion plant.

| More on:
A lithium battery with blue power background, indicating positive share price movement for clean ASX lithium miners

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Magnis Energy Technology Ltd (ASX: MNS) share price is bouncing today after news the company's subsidiary has fully funded its lithium-ion plant. 

Magnis announced that its subsidiary Imperium3 New York (iM3NY) has wrangled together US$85 million to fast-track the development of its lithium-ion battery plant.

Magnis also announced it has increased its investment in iM3NY. At a cost of US$23.6 million, it has increased its stake in the company from around 50% to approximately 63%.

The Magnis Energy share price reached an intraday high of 49 cents on the news, representing a gain of 13%, but it has since dropped back to 41 cents, down 3.53% on the previous session's closing price.

Let's look closer at the announcement the company made this morning.

Lithium-ion plant now fully funded for gigawatt production

The funding announced today means iM3NY can begin fast-tracking the production of its New York-based lithium-ion plant to gigawatt scale.

iM3NY expects the plant to be completed and capable of generating over 1 gigawatt-hour of high-grade lithium-ion battery cells each year by early 2022.

The plant will produce lithuim-ion batteries using iM3NY's exclusive North American technology license agreement with Charge CCCV LLC (C4V), which means the plant will be the only one in North America able to produce the same battery.

Its first-generation batteries will use C4V's patented bio mineralisation technology, combined with its proprietary bi-mineralised lithium mixed metal phosphate process.

According to the company, this will enable iM3NY to produce higher capacity, safer, longer cycling and lower cost batteries compared to all others on the market.

Currently, iM3NY is part of the US Department of Defence's supply chain and supports the electrification of several large US companies.

The company believes the technology will allow it to grow quickly into international markets.

Magnis Energy's chair Frank Poullas stated in today's release that, due to its "aggressive future expansion plans" iM3NY is investigating its potential to list on a US stock market.

Funding sources

The US$85 million of funding has come from a number of sources.

The largest is Riverstone Credit Partners, which provided a US$50 million senior-secured term loan.

The other US$35 million came from equity funding, US$23.6 million of which was through Magnis Energy's investment in the company.

Along with the funding announced today, iM3NY has US$230 million of manufacturing assets in place.

Further, Empire State Development has offered iM3NY performance-based incentives totalling US$7.5 million. These include a US$4 million Upstate Revitalization Initiative grant and US$3.5 million Excelsior Jobs Program tax credits.

Commentary from management

Pullas said today's news comes after 2 years working to finalise the funding:

With offtake agreements signed and a focus on producing greener lithium-ion batteries, we are in a great position to take advantage of the huge growth being experienced in this sector.

iM3NY's chair Dr Shailesh Upreti also commented on today's news:

We now have the funds to turn our project in Endicott, NY into something special. We believe we are in the right place at the right time to capture the enormous growth about to hit the globe for lithium-ion batteries and being in the world's largest economy with one of the country's largest near-term battery plants bodes well for future growth plans.  

Magnis Energy share price snapshot

The Magnis Energy share price is have a roaring year so far on the ASX.

Currently, Magnis Energy shares are up 121% year to date and a massive 770% over the last 12 months.

Magnis Energy has a market capitalisation of around $356 million, with approximately 838 million shares outstanding.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Energy Shares

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price
Energy Shares

Why is the Beach Energy share price racing higher on Thursday?

This energy producer delivered some big news this afternoon.

Read more »

A person is weighed down by a huge stack of coins, they have received a big dividend payout.
Energy Shares

Own Ampol shares? Get ready for your monster dividend payment

Ampol investors are about to enjoy their largest-ever dividend.

Read more »

A man sees some good news on his phone and gives a little cheer.
Energy Shares

Buy Woodside shares for a 20% gain and 4.5% dividend yield

Morgans thinks investors could get big returns from this energy giant.

Read more »

Woman holding $50 notes and smiling.
Dividend Investing

A 36% yield from this ASX dividend share? Here's how these forward-looking investors made it happen

Some savvy passive income investors are earning a 36% yield from this ASX dividend star.

Read more »

A Paladin Energy miner wearing a hard hat and protective gear stands in front of a large mining truck and smiles to the camera.
Energy Shares

Uranium is set to boom, and this is the 'premium' ASX stock to buy

Shaw and Partners' Jed Richards reckons these are the shares to buy for the nuclear energy theme.

Read more »

Happy coal miner.
Energy Shares

How these ASX 200 energy shares could unexpectedly burn brighter

ASX 200 energy shares are facing rising global demand for their products.

Read more »

Worker inspecting oil and gas pipeline.
Energy Shares

ASX energy shares losing charge amid fresh warnings of gas supply shortfalls

Many energy commodity prices fell overnight and this is hitting ASX energy shares today.

Read more »

A miner stands in front oh an excavator at a mine site
Energy Shares

'We have reached a bottom': 5 ASX uranium shares leaping higher this week

ASX uranium stocks have enjoyed explosive share price growth over the past year.

Read more »