"Profit Compoundd" Rules
- 10 May 2021
They timed there announcement well Dimerix DXB Up 40% this morning! to 0.335c
|We are invested in Tempus Resources (ASX:TMR) for its gold exploration project in Canada and were very pleasantly surprised this morning when TMR announced the completion of an oversubscribed capital raise at an average of slightly ABOVE the last market share price and the 15 day VWAP.|
A cap raise at or above or the recent share price is pretty rare in small cap investing and very positive in our opinion.
TMR now has an extra $6.28M in the bank to accelerate drilling for the rest of the current Canadian drilling season and has welcomed some institutional investors onto the register.
The next 120 days are going to be peppered with TMR drill results, and we are hoping TMR delivers some big gold hits and a significant share price re-rate that will attract later stage institutional interest at the higher share price to fund further development.
ASX:TMRTMR isn’t a typical early stage gold explorer. Their Elizabeth project had historical production of over 230,000 ounces of gold, and comes with a permitted, and previously producing mine, a mill, and a tailings storage facility that can be re-started if TMR proves out a decent resource size over the next few months.
Zero Carbon Lithium was a top performer.
Introducing Zero Carbon Copper, Nickel and Cobalt
|It’s no secret that we have been eagerly looking forward to the IPO of Vulcan’s “Zero Carbon copper, nickel and cobalt” spin out company Kuniko (ASX:KNI) - today we add KNI to our portfolio.|
Our latest portfolio addition is:
ASX:KNIRegular readers know that Vulcan went from 20¢ to around $14 on successfully progressing development of a local supply of Zero Carbon lithium for electric batteries in Europe, in close proximity to auto makers that are switching to electric and demanding ethically sourced battery materials.
While Vulcan was probably a once in a decade result, we hope that KNI can emulate just some of Vulcan’s early success in delivering Zero Carbon versions of key electric battery metals copper, nickel and cobalt - located in the mineral rich north of Europe: Norway.
Vulcan holds 26% of KNI and we like that KNI will be instantly able to leverage all the key learning and networks that Vulcan has built in the sector, including partners, offtakers, financiers, investors and advisors.
We expect KNI to open very strongly today off the back of its Zero Carbon battery metals narrative and association to Vulcan, then settle back a few days later like typically happens with most of our new portfolio additions (this is our just opinion based on our observations). So we are going to wait until the dust settles and traders have exited, in around a week, before we share our deep dive into the 12 reasons why we invested in KNI for the long term.
Today we will share a high level summary of KNI prior to our deep dive.
We look forward to following KNI’s journey over the next few years and sharing our opinions and commentary as long term investors on KNI’s progress, as the battery metals theme continues to play out globally, led by Europe. The majority of our holding in KNI is escrowed for 2 years (in hindsight we wish we had been escrowed like this on Vulcan…).
ASX:KNIKNI’s 20c IPO was heavily oversubscribed, so congrats to any Vulcan holders who got an allocation. Vulcan held copper, nickel and cobalt assets in Norway but has spun them out into KNI.
While Vulcan is spinning off its Norwegian assets, it is retaining a 26% interest in KNI. This move allows Vulcan to unlock the projects’ value and inject new capital into an exciting new project and narrative that would otherwise be lost in the $1.6B Vulcan behemoth.
According to the prospectus KNI will list with ~53M shares on issue and $7.5M in the bank, giving it an enterprise value of $3.1M at 20c. ($4.3M EV full diluted with options)
KNI was created by the same team that bought you Vulcan, which has been hugely successful off the back of its Zero Carbon lithium story.
We invested in VUL at 20¢, 40¢ and then $6.50 - now trading at around $14 it’s been our most successful investment ever (we certainly don’t always get things right, but VUL was a cracker).
Quick take: KNI’s “Zero Carbon” Copper, Nickel, Cobalt projectsHere is a summary of KNI’s projects. Field studies are now underway and we expect the KNI to deliver Zero Carbon studies on all its projects in the near future.
Skuterud - The Skuterud tenements are in a part of Norway known for its historically important Co, Cu and Ni production — this mining district was previously the largest cobalt mining area in the world. Mining occurred from 1773 to 1898, with a total estimated production of 1 million tons with 0.1–0.3 % Co, up to 2.0 % Cu and Au up to several parts per million locally.
Feøy – The Southwest Norway tenements, the Feøy Project, encompass a 71km2 area across most of the Feøy islands group and the northern part of Karmøy Island. This part of Norway is known for its historically important Copper and Nickel production.
Copper projects– KNI’s copper projects (Vangrøfta, Undal, and Nyberget) have a long history of production. Sampling by KNI at Vangrøfta yielded up to 16.75% Copper, 3.33g/t gold and anomalous concentrations of cobalt from waste dumps.
Why battery metals? Why Europe? Why Zero Carbon?Europe will have greater than 500 GWh battery manufacturing capacity by 2030 to supply its electric vehicle (EV) market. Every year, that requires 100,000 tonnes of cobalt, 315,000 tonnes of nickel, and 800,000 tonnes of copper… all with a low carbon (CO2) footprint.
Europe is turning green and automakers are demanding sustainable Zero Carbon battery metals — a demand that will soon be regulated. From January 2026, all lithium-ion batteries will have a carbon intensity performance class label, while from July 2027, batteries must comply with maximum carbon footprint thresholds. Any batteries not meeting the new regulation will be banned.
We think that sustainably sourced Zero Carbon versions of key battery metals Copper, Nickel and Cobalt located in Europe are going to be very well received by the market.
Preview: 12 reasons we are invested in KNIWe will share our deeper dive analysis on the 12 reasons we are long term holders of KNI, but in the meantime here is a quick summary:
"The next Vulcan": Vulcan has been hugely successful on the back of its Zero Carbon Lithium story. KNI has the same team as behind Vulcan, with VUL remaining 25.85% shareholders in KNI. The KNI narrative has powerful tailwinds.
Our top investment thematic: Ethical, sustainable locally sourced battery metals in Europe is our top long term investment theme. As the world works towards zero carbon emissions, new investment opportunities like KNI are emerging.
Zero Carbon copper, nickel and cobalt: Investment exposure to 3 key battery metals in one company. Like lithium for Vulcan, battery metals projects such as these are attracting increasing investment in the region, especially if they are sustainable and environmentally friendly. We will cover each KNI project in detail and how they will be Zero Carbon.
Located in mineral-rich Norway: The projects are in close proximity to European vehicle makers that are seeking Zero Carbon EV and Li-ion battery ingredients. Norway’s electricity is almost 100% renewable, so these projects have the potential to be carbon neutral.
Historically producing projects: These are not greenfields projects. We know the mineralisation is there as they come with extensive mining histories that are still to be analysed with modern technology.
Impressive management team and board: The KNI team’s experience and connections (including the same Chairman as Vulcan) are too great to be summarised here, but will be covered in our follow up deep dive in a week or so.
Platform to expand land holdings and projects: Management is open to acquiring further projects that could bring a huge uplift in KNI. KNI’s network would support this as would its team as good people attract good projects.
Busy work program is now underway leading up to the Norwegian winter across its three project areas.
Leverage off the global networks built by Vulcan: Having spun off from Vulcan, the KNI team has established relationships and access to potential offtakers, major investors, bankers, technology, and advisors.
Cap structure leveraged to growth: Low number of shares on issue (~53M million), with VUL retaining one-quarter, meaning that the capital structure is leveraged to success. There are minimal options on issue to dilute shareholders' positions.
Aiming to be best in class ESG: we expect KNI to continuously disclose its Environment, Social and Governance to investors and stakeholders, to attract large ESG funds in the future.
Scandinavia is mineral rich and highly supportive of clean energy projects and positioned to support Europe’s desire to have an autonomous and carbon neutral economy.
Our expected Company Milestones for KNIHere are the company milestones we want to see KNI deliver over the next 12 to 18 months - we have borrowed a few of the early milestones that VUL delivered at the start of its journey:
Ref KNI's please explain:
I didn't realise S3 Consort owned Next Investors. That explains A LOT!! Not just here, but in quite a few stocks I follow.
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I'm now completely off LCL... If management need to engage promoters for the success of a mining company then I'll pass.
Are any of the s3 consortium pics actually genuinely successful (you know...make a profit...) Or all they just more advanced pump groups? Like all pumps... Its about when to get in and out. Typically difficult to do if you do not have inside info.
|📰 This week on Next Investors|
As mentioned, Kuniko (ASX:KNI) was the standout performer of the Next Investors portfolio this week. Shares in the Vulcan Energy spinout listed on the ASX on Tuesday after a heavily oversubscribed IPO, before the stock ended the day up 325% from its 20c listing price.
But that was far from the end of the action for KNI this week. While Wednesday was relatively quiet, Thursday saw the stock jump from its 80c opening price to as high as $3.60 per share after announcing that exploration was underway at its Norwegian battery metals projects.
📰 Introducing Kuniko (ASX:KNI): Zero Carbon Copper, Nickel and Cobalt
Alexium International (ASX:AJX) released its annual results yesterday, demonstrating that its commercialisation strategy is starting to deliver. Over the year, AJX realised key commercial and product-line milestones that significantly expand its market opportunities and establish new revenue streams.
Revenues were up 20% for the year, while costs were down a massive 76% — positive trends that we expect will continue to ramp up over the next few quarters as AJX continues executing on its growth strategy in FY2022.
📰AJX financials released early: the progress is in numbers & more announcements to come says CEO
Vulcan Energy (ASX:VUL) announced on Monday that it has appointed Europe’s biggest bank by assets, BNP Paribas, to help with its Bankable Feasibility Study and structuring project finance to build its Zero Carbon Lithium project.
VUL has already signed multiple offtakes agreements for its Zero Carbon Lithium with battery maker LG Chem and auto-giant Renault, plus a rumoured offtake MoU with another auto-giant, Stellantis.
We also reported that German research house, Alster, has released a new research report with a VUL price target of $19.50. You can read more and find a link to that report here:
📰VUL appoints project finance advisor BNP Paribas. Alster upgrades VUL price target (again) to $19.50
🗣️ Quick takes on key portfolio company events this week:WhiteHawk (ASX:WHK)
Almost nine months into his presidency, it is clear that cybersecurity is a priority for Joe Biden’s administration as it works closely with the public and private sector to address concerns. Biden held talks with some of the USA’s leading technology companies this week to address cybersecurity deficiencies — a “core national security challenge” for the US.
After the meeting, the White House announced that Google had committed to invest $10 billion in cybersecurity over the next five years, while Microsoft said it would invest $20 billion over the same period.
We think that WHK is well placed to take advantage of the growing urgency around cybersecurity protocols in the US.
Read more on Biden’s meeting here and watch his speech on Wednesday:
Time to address comments about us in news and social media.
The more we have been succeeding with our long term stock selections, the more new subscribers we are getting, and many are providing us positive feedback.
But in recent months, we also seem to be attracting some negative attention and comments across media, social media, reddit, stock chat rooms etc from people who don’t understand our service.
While some of it has been constructive and we have used it to improve our service - our policy has been to NOT publically respond to any of the uninformed, unconstructive comments in order to “not give them any more oxygen”.
|WhiteHawk Ltd (ASX:WHK) is a US based cybersecurity technology company servicing US federal government agencies, large corporations, right through to small businesses.|
WHK today announced that it has entered into a co-sell agreement with Dun & Bradstreet’s Public Sector Solutions business regarding Cyber Risk and Vulnerability Reporting.
We have been invested in WHK since early 2019 — it was the first investment in our current portfolio.
WHK hasn’t delivered as many announcements as we were all hoping for this year, which has seen short term investors lose interest and the WHK share price come off from its Jan/Feb highs in the 35¢ to 45¢ range, to recently trade under 20¢.
But the past few weeks have seen a number of announcements from WHK, including a material lift in half year revenue, suggesting that WHK could soon be back on investors’ radars.
ASX:WHKWHK’s newly announced co-sell deal is with Dun & Bradstreet, a leading global provider of business decisioning data and analytics. Its Public Sector Solutions business includes global government organisations, government-controlled enterprises, higher education and healthcare markets, and government-focused businesses (integrators, contractors, advisories).
A quick google shows:
|Next Investor talking up the Uranium Sector, Stock GTR their fovorite to win that race. Uranium, as a commodity, coming into its own. With the likes SPROTT, Uranium Trust, driving the commodity into a frenzy. Buying out supply and putting the Uranium Demand into a head spin. I got my money on this Uranium Market. Still got a long way to go with Uranium, If they don't make bombs with the crap, it can go a long way. (clean energy)|
Aside from VUL raising a whopping $200M and then trading $72M of volume on Friday before its entry to the ASX 300 next week... uranium continues to be the story of the moment.
The uranium price is up 60% in the last two weeks in what has been dubbed by many as the “uranium squeeze” led by the Sprott physical uranium trust, an investment fund that is buying up and holding physical uranium in anticipation of growing demand, driving up the price.
The uranium squeeze appears to be contagious with hedge funds and family offices said to be joining in buying physical uranium, and a lot of financial players are increasingly interested in uranium, from the Middle East to Singapore and Hong Kong.
As Bloomberg reported this morning, the world’s biggest uranium miner, Kazakhstan’s Kazatomprom, is in talks to directly supply the Sprott Physical Uranium Trust, according to its chief commercial officer, Askar Batyrbayev. He added that in addition to Sprott, there’s further competition for the Kazahk producer’s supplies, with Kazatomprom also in talks with China to help build the country’s strategic stockpiles -- designed to hold 23,000 tons by 2026.
(Side note: start doing some reading on the resources potential in Kazakhstan. We are working on a new investment in that country for later this year/early next year… is nice!)
We think the sudden interest to corner the physical uranium market is because uranium is starting to become widely accepted as a potential fuel for clean energy COMBINED with years of chronic under investment in exploration and development while nobody cared about uranium over the last 10 years.
Again a huge congratulations to those that were invested in and long term holding uranium stocks while they were out of favour - hats off to you and well done, especially to those out there sharing their research in their high conviction investments (CP, MC).
Our little uranium explorer GTR has been lifted in the uranium excitement like a kite in a hurricane. GTR expects to be drilling before Christmas so the next few months will be interesting to watch, especially if the uranium bull run has legs. GTR just released the prospectus for their rights issue.
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