With 7 Analysts on board and up almost 140% in the past twelve months this attractive water pure-play is a true ESG

On May 13, H2O Innovations (TSXV: HEO | OTC: HEOFF | FSE: DB: H3O1) announced fiscal third-quarter financial results for the month ending March 31, 2021.

The company started the year off strong with quarterly revenue up 8.6% year-over-year and net earnings hitting C$2.1 million in the quarter, up from a loss of C$3.1 million in the same fiscal period last year.

H2O beat analysts’ consensus revenue and earnings estimates as revenue hit C$39.2 million in the quarter, up from C$36.1 million in the same quarter last year, with revenue increases coming from both organic growth and through acquisitions.

Gross profit margins remained strong at 28%, consistent with the margins last year, and adjusted EBITDA reached C$4.5 million or 11.5% of revenues, compared to C$3.8 million, or 10.5 % of revenues, for the same fiscal period last year.

Most importantly, operational cash flows hit a record C$10.2 million in the quarter up from C$0.9 million in the comparable quarter of the previous fiscal year.

Understanding H2O

H2O is a Canadian wastewater treatment solutions company that designs, builds, and supports facilities based on membrane filtration technologies for municipal, industrial, energy, and natural resources end-users.

H2O operates through three main business segments:

  1. Water Technologies and Services (WTS), which designs and builds custom water, wastewater, and water reuse systems and treatment plants, with more than 750 systems installed in North America;
  2. Specialty Products (SP), which develops specialized chemicals and consumables from its subsidiaries, such as Maple, PWT, Genesys, and Piedmont, and distributes through a network of over 100 partners; and,
  3. Operation and Maintenance (O&M), which operates more than 275 facilities in 12 states in the U.S. and two Canadian provinces.

Figure 1: Three main business segments – Water Technologies and Services (WTS), Specialty Products (SP), and Operation and Maintenance (O&M)

H2O - Business Units

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Solid Pipeline of New Sales and Renewals

Earlier this month, H2O announced winning two new projects and renewed four operation and maintenance contracts in the O&M business segment, with a total value of C$3.3 million. With these contracts, the total O&M backlog increased to C$63.5 million.

The new contracts comprise the operation, maintenance, and management of a Municipal water treatment facility in Texas and the operation and maintenance of an effluent treatment facility at an agriculture-food processing plant in Alberta, Canada.

H2O also renewed four municipal O&M contracts in Vermont with the first contract renewed for over five years, the second and third contracts extended for five years, and the fourth contract was renewed until March 2022.

M&A Driving Growth

As part of its 3-year strategic plan announced in December 2020, H2O commented that it intended to complete between two to four acquisitions within the next 30 months.

In February 2021, the company closed the acquisition of the remaining 76% of Genesys Membrane Products (GMP) in Spain that it originally had taken a 24% ownership stake in through the acquisition of Genesys in the United Kingdom in 2019.

GMP reported revenue of approximately €5.00 million (C$7.75 million) in 2020 of which 24% was already accounted for in H2O financials.

GMP expands the company’s specialty chemical products and laboratory services to an international distributor network that focuses on Latin America, primarily within the mining industry.

In July 2020, H2O announced a C$3.7 million acquisition of Gulf Utility Service (GUS), a U.S. water utilities company. GUS booked revenue of approximately US$5.0 million and EBITDA of US$0.6 million in 2019.

In the recent quarter, over 95% of the revenue growth was from its recent M&A activity; the GUS acquisition contributed C$1.3 million in additional revenue and the acquisition of GMP in February contributed an additional C$1.5 million in revenue.

Biden’s Infrastructure Plan Adding Billions to a Hundred-Billion-Dollar Market

In April, the U.S. legislators passed the “Drinking Water and Wastewater Infrastructure Act of 2021” that authorizes almost US$35 billion over five years to a variety of programs focused on safe drinking water, wastewater treatment, sewer overflows, and stormwater management.

This Act is only the first part of President Biden’s US$111 billion plan for water infrastructure improvements as a component of the American Jobs Plan.

In H2O’s recent quarterly conference call, CEO Frédéric Dugré stated, “we want to reiterate that we welcome very positively the $30 billion water-related infrastructure plan announced earlier by President Biden at the end of April. We believe many opportunities will emerge from this stimulus plan, notably for new water reuse projects in order to fight back the growing water scarcity mode in Southern states.”

Even without these new U.S. government funding initiatives, the global water market is expected to grow from US$854.0 billion this year to US$914.9 billion by 2023, according to the latest report published by Global Water Intelligence (GWI).

GWI’s Global Water and Wastewater Treatment market consist of both operating and capital expenditures by utilities and industrial water users on water and wastewater.

The Water and Wastewater Treatment market experienced renewed activity and high growth due to declining water qualities and growing demand for cost-efficient and environmentally friendly water technologies and services.

However, several challenges hinder the Water and Wastewater Treatment market, including high capital costs for equipment, outdated and inefficient water infrastructures. Companies such as H2O benefit as governments look to reduce costs by shifting operations to third-party Water and Wastewater Treatment companies.

Final Thoughts

As Environmental, Social, and Governance (ESG) investing causes a shift towards finding long-term financial returns that are aligned with social values, H2O remains an attractive water pure-play with a strong balance sheet, a large sales backlog, and profits.

H2O’s stock is currently trading at C$2.40 per share, up almost 140% in the past twelve months. Seven analysts cover the company, all with a “Buy” rating, and price targets ranging from C$3.25 to C$4.00. Currently, H2O has a market cap of C$197.4 million.




Adding dynaCERT to Your CleanTech Portfolio

After spending 16 years and over $60 million to develop its CleanTech technology, dynaCERT Inc. (TSX: DYA | OTCQX: DYFSF | FSE: DMJ) hit major milestones in 2020, with the potential for an even better 2021.

As part of the growing global hydrogen economy, dynaCERT manufactures and distributes Carbon Emission Reduction Technology (CERT) for use with diesel engines.

Its flagship product, HydraGENTM, uses a patented process to generate hydrogen and oxygen on-demand, through an electrolysis system and supply the gases through the air intake to enhance combustion, reduce pollution emissions (by up to 50%), and improve fuel efficiency (by up to 19%).

dynaCERT estimates that a unit will pay for itself in fuel savings in about a year.

Key 2020 milestones included:

  • In May, dynaCERT received a purchase order for 3,000 HydraGEN™ units from KarbonKleen Inc. and signed KarbonKleen as a dynaCERT’s Preferred Service Provider, covering the trucking market in the United States.
  • In August, dynaCERT signed a Dealer Agreement with Sparta Group’s (TSXV: SAY) affiliate TruckSuite Canada Ltd. and received an order for 150 HydraGEN™ units from TruckSuite.
  • In June, the Company closed an C$8.4 million stock offering and, as of its latest financials, had $16.2 million in cash.
  • In July, dynaCERT reopened an updated Assembly Plant in Toronto, Ontario, Canada that was retrofitted with a new semi-automated assembly system that can assemble up to 6,000 units per month, representing potential sales of almost $445 million per year at full capacity.
  • The city of Woodstock, Ontario, Canada signed a deal with dynaCERT to equip Woodstock’s diesel-powered vehicles with HydraGEN™ Technology. Woodstock is the first major North American city to sign an agreement with dynaCERT.
  • dynaCERT also established a 100%-owned subsidiary called dynaCERT International Strategic Holdings Inc. (“DISH”) that will be used to strategically invest in CleanTech companies directly involved with dynaCERT’s solutions, including funding a monthly subscription option to facilitate sales of HydraGEN™ units.
  • dynaCERT also launched its freight management software, HydraLytica™, as a new stand-alone offering into the FreightTech industry. The Company’s PaaS (Platform as a Service) solution aggregates vehicle data to create actionable intelligence and presents the information in an easy to use interface.
  • In order to broaden the company’s appeal to a larger shareholder base, including institutional shareholders, dynaCERT graduated its stock listing to the TSX from the TSX Venture Exchange and, in the United States, graduated to the OTCQX Best Market.

Diesel Engine Market

The diesel engine market is massive – an estimated 1 billion diesel engines operate around the world.

dynaCERT’s technology works with many types of diesel engines used in various industries including construction, forestry, mining, power generation, and transportation (trucks, marine, railroad), to name a few.

dynaCERT has over 45 dealers around the world selling its HydraGEN™ technology to truck owners, commercial fleets, and governments that use diesel engines.

Even with the advent of electronic and hydrogen vehicles, it is estimated diesel engines will still dominate the commercial vehicle market due to factors such as durability, reliability, and low-cost operation. According to a report by IHS Markit, by 2040, 60% of new medium and heavy commercial vehicles sold in the United States will still be fueled by diesel.

Environmental Pressures

After the coronavirus pandemic passes and with president-elect Biden campaigning on a pro-environment platform, greater air pollution restrictions are likely to be enacted in 2021.

Reductions in carbon dioxide (CO2), nitrogen oxides (NOx), and particulate matter (PM) are keys to cleaner diesel engines and dynaCERT’s technology can help lower these toxic emissions.

Two Hundred Million Dollar Market Cap – Billion Dollar Opportunity

In November 2019, famous Canadian mining investor Eric Sprott made his first significant CleanTech investment by investing $14 million in dynaCERT.

With a market cap of only C$205 million and the current billion-dollar size of the market, there is still plenty of upside for dynaCERT’s stock price. The analyst’s estimate target price is C$2.20, which represents a potential return of over 300%.

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Nano One’s Dan Blondal talks about their unique high-voltage cobalt-free battery and many partnerships

In a recent InvestorIntel interview, Peter Clausi talks to Dan Blondal, CEO, Director & Founder of Nano One Materials Corp. (TSXV: NNO) about their recent news about their unique high-voltage cobalt-free battery. Dan Blondal explains how their breakthrough LNM material, also known as high voltage spinel, is a cobalt-free, low-cost cathode material that provides improved efficiency, thermal management and power.

“Our process is to develop the processes for making these cathode materials,” Dan Blondal says in the interview, “the cathode materials themselves, batteries that use the cathode materials, and then license that technology, or joint venture with partners on manufacturing.” He went on to explain how Nano One’s LNM cathode is a leading candidate for next generation lithium-ion and solid-state batteries because its durability and dimensional stability enable a stable interface.

In this InvestorIntel interview, which may also be viewed on YouTube, Dan went on to say “Our DNA is in process innovation,” he continued, “and we look to partner with people who understand how to control supply chain” as well as “understand manufacturing and have the supply channels.”

Asked about partnerships, Dan said: “We have about 20 groups were are actively working with.” They include the Asian development partner announced this August. “Volkswagen is one of our announced partners, but we are also working with a bunch of their peers.” These partners and opportunities are “a big part of the story, and my job is to convert those into real and meaningful deals.”

To watch the full interview, click here.

YouTube (click here to subscribe to the InvestorIntel Channel),

To learn more about Nano One Inc., click here

Disclaimer: Nano One Materials Corp. is an advertorial member of InvestorIntel Corp.




Australian Strategic Materials demerger from Alkane Resources unlocks shareholder value

Australian Strategic Materials Limited (ASX: ASM | ASMMF) (“ASM”) is the result of  Alkane Resources Ltd. (ASX: ALK | OTCQX: ALKEF) demerging their Dubbo rare earths and poly-metallic project in late July 2020 to form a new listed company. The combined market cap of Alkane Resources and ASM now exceeds its previous value as a single company, showing that the demerger achieved its goal of unlocking shareholder value.

The key assets of the newly-listed Australian Strategic Materials (“ASM”) include:

  • The Dubbo Project (flagship) is a 100% owned ‘construction ready’ poly-metallic and rare earths project with potential to become a key global supplier of specialty metals and rare earths. The Dubbo deposit is a proven, large deposit of Zr, REE, Nb and Hf minerals
  • Metals Technology Business – ASM is investing in new technologies related to the separation, purification and metallisation of oxides. Their JV pilot plant with ZironTech is now in operation.
  • Toongi Pastoral Company – The company owns 3,500 hectares of freehold and leasehold land 25kms south of Dubbo, NSW, Australia.

What’s happening now with Australian Strategic Materials

ASM’s strategy is to not only produce rare earths concentrate but to go further up the value chain and produce various strategic metals. Should ASM succeed, it would place them in that exclusive club in the mining industry of being an alternative strategic high value metals producer outside of China.

To achieve this goal of producing metals from their Dubbo Project, ASM is working with their Joint Venture (JV) partner, South Korea’s Zirconium Technology Corporation (“ZironTech”). The JV is now advancing a pilot project to produce various metals by combining their proprietary process with ZironTech’s metallisation technology. ASM has exclusive global commercialization rights under the licence. The pilot plant is now up and running in South Korea.

 

Australian Strategic Materials plans to move up the rare earths and strategic materials value chain

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The latest progress in pilot testing the extraction of strategic metals:

July 2, 2020 – ASM/ZironTech JV produces titanium metal alloy with a 45% power saving. The commercial pilot plant was commissioned on time and on budget, with ~30kg of titanium metal alloy produced. A subsequent run of the pilot plant produced another 22kg of titanium metal alloy, with up to 50% less energy than current commercial production methods. Then in August ASM reported that their JV produced 9.16kg titanium (Ti) metal powder assaying 99.83%.

July 13, 2020 – ASM/ZironTech JV produces high quality neodymium (Nd) metal alloy, with successful laboratory production of ~1kg of neodymium metal alloy.

ASM & ZironTech produce a ~1kg of neodymium (87%) metal alloy using their 45% more efficient reduction process at their pilot plant

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August 19, 2020 – JV produces second key permanent magnet metal, praseodymium (Pr). Commercial pilot plant produces 5.3kg Pr metal assaying 99.3%. JV announces a forward plan for commercial pilot plant production of neodymium, praseodymium and dysprosium metal in August.

ASM & ZironTech produce 5.3kg of high purity praseodymium metal (99.3%)

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“This is a major milestone in ASM’s integrated strategy that includes clean metal production for all products from the development of the Dubbo Project in Central West NSW”, according to ASM’s Managing Director, David Woodall. “This integration of metal production into ASM’s business is consistent with the Australian Government’s objective of adding value within Australia, while ensuring supply security and stability of these critical materials to global and domestic Australian manufacturing sectors.”

The Dubbo Project is a large resource of zirconium, hafnium, niobium, and rare earths (including praseodymium, neodymium, and yttrium). It is the most advanced poly-metallic project of its kind outside China. The Project has an estimated 70-year mine life and can be an open pit design. The Project is ready for construction with all major state and federal approvals and licenses in place. The 2013 DFS resulted in a pre-tax NPV8% of A$1.235 billion, and a pre-tax IRR of 19.3%. The Company has since proposed a two stage production start up so as to lessen the first stage CapEx from an estimated US$930 million to US$480 million. A follow up FS plans to incorporate the new and improved processing techniques from their ZironTech JV.

Closing remarks

Rare earths are not rare in the earth’s crust, however extracting and purifying them is the challenge that has traditionally been an expensive and polluting process, mostly done in China. What ASM and their JV partner ZironTech are doing is revolutionizing the process of rare earth metals production, using much more energy efficient methods that are also less harmful to the environment. It is still early days with their pilot plant testing however results so far with titanium, neodymium, and praseodymium appear to be highly promising.

Effectively ASM is working towards becoming a vertically integrated (“mine to metal”) western producer of high purity strategic/critical and valuable metals. Subject to further testing and funding the plan is to have clean metal processing plants in Korea and Australia. More efficient processing techniques should significantly improve the economics of ASM’s Dubbo Project as well as opening up the opportunities for wider commercialization of their breakthrough technology.

The market seems to agree. Australian Strategic Materials’ stock price has doubled so far in August and ASM is now trading on a market cap of A$264m.




EXRO’s CEO on deal with Clean Seed Capital to advance electrification of farm equipment

“I think what we bring to the table that is really different from anybody else is that we are looking at how we control efficiency through the power electronics, but working with the motor. We are looking at that complete system optimization. By doing that we have got this huge market that is interested in what we are doing. It doesn’t matter if you are into green technology or motors or power electronics. We are kind of covering all three of it.” States Sue Ozdemir, CEO of Exro Technologies Inc. (CSE: XRO | OTCQB: EXROF), in an interview with InvestorIntel’s Tracy Weslosky.

Sue went on to provide an update on Exro’s collaboration and supply agreement with Clean Seed Capital Group Ltd. to integrate Exro’s technology into Clean Seed’s high-tech agricultural seeder and planter platforms, advancing the electrification of heavy-farm equipment. Sue said that Clean Seed is an industry expert in the agricultural segment. Agriculture still has 45% of the industry using non electric methods. With the Clean Seed deal, Sue said, Exro will be able to show scalability of its technology for the entire mobility industry. Sue also provided an update on Exro’s partnership with Motorino Electric. She said that Exro has delivered the first Exro-powered e-Bike to Motorino. Exro’s engineered technology provided a torque and acceleration increase of greater than 25% for the Motorino e-Bike.

To access the complete interview, click here

Disclaimer: Exro Technologies Inc. is an advertorial member of InvestorIntel Corp.




dynaCERT’s revenues begin to ramp up exponentially as a global solution provider for pollution reduction

COVID-19 has shown us what a world without air pollution can be like. As economies reopen and pollution returns, governments and individuals will be demanding greater emissions reductions. China and Europe are already leading the way in 2020 with policies to reduce emissions.

The COVID-19 lockdown resulted in a massive drop in air pollution across China and globally

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If you are new to dynaCERT Inc. (TSXV: DYA | OTCQB: DYFSF), dynaCERT manufactures, distributes, and installs Carbon Emission Reduction Technology (CERT) for use with diesel engines. Their flagship product is HydraGEN™, which is an electrolysis unit that produces H2 and O2 gases which act to optimize the burn, resulting in an up to 19% increase in fuel economy and a +50% reduction in emissions.

dynaCERT’s HydraGEN reduces fuel consumption and drastically reduces emissions:

How dynaCERT’s HydraGEN works to reduce fuel consumption and emissions:

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dynaCERT have already spent $60 million developing the technology to date, including 16 years of R&D to commercialization. They have worldwide patented technology with a unique electrolysis reactor, unique processes, unique electronic control unit, and a unique encrypted data management. They have achieved certification in several global jurisdictions, and have a first mover advantage.

With an enormous global market to address, which includes around one billion diesel engines —  dynaCERT has already made inroads into the initial markets shown below.

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dynaCERT has the following global partners/dealers:

  • Mosolf – Has installations & 23 showrooms throughout Europe. Distribution channels in Germany, France, Netherlands, Belgium, Luxembourg, Poland, Czech Republic.
  • Farhi Holdings – Distributor for Brazil & Israel.
  • H2 Tek – 43 active mining conversations, 15 trial negotiations, 6 trials. Mining projects in: Canada, USA, Peru, Chile, Brazil, Paraguay, Uruguay, Argentina, Russia, Mongolia, and Australia.
  • KarbonKleen – Financing for Mexico assembly with an MOU for 1,000,000 units. KarbonKleen was recently awarded the exclusive dealership rights in the trucking industry in the USA until December 31, 2024 (subject to certain quotas of a minimum of 150,000 HydraGEN Technology units over a little more than 3 years).

Brian Semkiw, KarbonKleen’s Chairman & CEO, stated: “In the past few months, some of the largest fleets in North America have been piloting HydraGEN Technology. These fleets have been experiencing the benefits of the reduced emissions, increased performance and fuel savings across all users and we expect a vibrant expansion of the pilot programmes to full fleet deployment with the subsiding of the Coronavirus pandemic. This investment by DISH and our partnership with Velociti will enable us to meet the anticipated demand with the delivery and maintenance professionalism that large fleets demand.”

Ranked #1 Company across all sectors on the 2020 TSX Venture 50 in February, dynaCERT recently announced (May 14) that they had received conditional approval to graduate to the Toronto Stock Exchange. This is a significant milestone and a plus for the company and its investors as it now allows greater exposure for potential future buyers including institutional investors.

Jean-Pierre Colin, Executive Vice President of dynaCERT, stated: “Graduating to the TSX represents a significant milestone in our efforts to broaden our appeal to a larger shareholder base, including institutional investors, and raise the Company’s profile among the investment community. We expect this graduation to further enhance the liquidity of our stock and enable us to continue building long-term shareholder value.”

As dynaCERT’s revenues are set to grow exponentially from just C$1 million in 2019 to a forecast C$62 million in 2020, and C$224 million in 2021 — dynaCERT is now at a stage of monetizing their many years of R&D.

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With a growing customer base and global partners/dealers dynaCERT should now see a constant ramp up in product orders starting now. The KarbonKleen Mexico MOU for 1 million units and US trucking dealership (150,000 minimum units), the Mosolf European dealership, combined with Farhi Holdings and H2 Tek give a broad and growing global reach to sell dynaCERT’s products, thereby fast tracking sales.

After a rapid rise in 2019, dynaCERT’s stock price has pulled back recently due to the COVID-19 sell off thereby allowing investors who may have missed earlier opportunities a chance to enter at an attractive valuation. The market cap is still only C$145 million, with an analyst’s consensus target price of C$2.00, representing 208% upside, investor Eric Sprott “jumped onboard” as an investor earlier this year.




The Perfect Market Storm: Critical Materials, Cleantech and COVID-19

There seems to be a misguided notion (with some) that isolation means we have more time to waste. Far from reality, I am certain that many of you, like me are looking at your inbox wondering where or how to wade into the depth of quality deals and opportunities upon us…

Would like to kick your morning coffee off with a special nod to our longstanding friends from Avalon Advanced Materials Inc. (TSX: AVL | OTCQB: AVLNF) whose $AVL soared 50% yesterday. We have been supporters of #Avalon since Don Bubar first did an interview with me in 2009 (with Jack Lifton) and introduced me to rare earths. And indeed, there is news flow in the rare earths a-n-d throughout the critical materials sector that is literally ricocheting from source-to-source online…

How to follow?

Jack Lifton, Clint Adam Smyth and I just launched the TechnologyMetals.com site to manage the influx of critical materials’ news (and experts) we are communicating with regularly. Jack’s interview with Dr. David Dreisinger on Search Minerals Inc. (TSXV: SMY) last week was purely outstanding (in my opinion) as he describes David as “the leading authority on solvent extraction process”. This is a hot topic that we touch on in our weekly update that we just started…click here to access a preview

And associated technologies relating to cleantech? We saw Exro Technologies Inc. (CSE: XRO | OTCQB: EXROF) stock move up 30% yesterday! Interviewing CEO Sue Ozdemir on how Exro makes “electric motors faster, stronger and greener” for InvestorIntel on Wednesday: we will get this up live as fast as we can!

Uranium continues to maintain a much-deserved interest, let me point you in the right direction for a quick update – Matt Bohlsen’s piece from last week titled, The DoE’s plan to rebuild the uranium sector and ‘pull America’s nuclear industrial base back from the brink of collapse’… reinforces the sustainability themes we are touting on the Technology Metals Show. Arranging interviews as we speak with Mark Chalmers of Energy Fuels Inc. (NYSE: UUUU | TSX: EFR) and Jeff Klenda of Ur-Energy Inc. (NYSE: URG | TSX: URE) as they “stand to be the major beneficiaries, especially given they started the whole S232 petition back in January 2018” you should see those live on InvestorIntel next week.

And yes, we are following the biotech and life sciences market. If you subscribe to our AI driven market updates on InvestorChannel.com – you can catch the 20 companies, we are following in the race for vaccinations…click here

Speaking of AI technology, we would like to ensure that you are aware of the news that was put out by Predictmedix Inc. (CSE: PMED | OTCQB: PMEDF) yesterday titled — Predictmedix Files Patent for Mass Screening for Infectious Diseases Such As #COVID19

1 YR stock Chart for Predictmedix Inc. (CSE: PMED) – Source: TD Waterhouse

And speaking on the war against the COVID-19, StageZero Life Sciences Ltd. (TSX: SZLS) put out the following news on April 20th StageZero Life Sciences Initiates Testing for COVID-19 In the USA

Remember, click here to subscribe to the InvestorChannel for daily market updates on the Canadian, US and Hong Kong markets – and to follow InvestorIntel’s stock watchlist for Gold, Uranium, Rare Earths and of course, COVID-19…