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This ASX Stock is Now Cheaper than Where We Last Invested


Published 25-FEB-2021 10:19 A.M.


2 minute read

A few weeks ago we invested more in Vulcan Energy Resources (ASX:VUL) via the placement at $6.50 - as a long term hold.

VUL just raised $120M led by Goldman Sachs. Australia’s richest person Gina Rhinehart invested almost $50M.

VUL is now fully funded for the medium term and picking up the pace with a nice pile of cash - we are watching for rapid fire news flow over the next few weeks and months.

VUL’s share price has just come back to around the placement price, which often happens for a little while as the market digests the newly issued stock.

We are long term holders in VUL - here is why:

“Once in a generation” paradigm shifts are where vast generational fortunes are made.

Over recent centuries, the biggest wealth creation events on a global level have been:

  1. Water and steam power to mechanize production;
  2. Oil, gas and railroads;
  3. Internet and mobile;

And now - the coming years will be all about:

4. Green transport and industry - carbon emission free.

The world is rapidly making the switch to Electric Vehicles (EVs) before our eyes - it is reported this will be a $5 trillion undertaking (yep, that’s TRILLION with a T).

What was going to take 30 years has now been accelerated by COVID - governments around the world are locking in massive climate neutrality projects to pump money and jobs into a COVID battered economy.

The European Union is leading the charge here, with its Green Deal - a set of policy initiatives with the aim of making Europe climate neutral by 2050.

The Green Deal includes an objective to mobilise at least €1 Trillion to support sustainable investments over the next decade.

As a result of this massive shift in how we generate energy, the EU is scrambling to secure enough raw materials to make “green” batteries on home soil.

As part of the Green Deal, sweeping new EU regulations for EV batteries are rapidly being put into place:

  • CO2 footprint transparency requirements.
  • Sustainable and ethical sourcing will be required.
  • The EU will seek to achieve self-sufficiency in sustainably produced batteries and battery raw materials.

VUL is perfectly placed to capture value in this new green revolution - we have invested with a 3 to 5 year investment horizon.

Our Top 2020 Pick VUL has:

  • Biggest lithium resource in Europe - lithium being the key ingredient in electric vehicle batteries
  • This lithium resource sits in the heart of Germany - the centre of automakers and the world’s fastest growing lithium market.
  • A best in class green, zero carbon, socially responsible project.
  • Elon Musk is building a gigafactory next to Berlin and has said that lithium supply must be localised.
  • Just a few weeks ago VUL raised A$120M led by Goldman Sachs, Gina Rinehart and ESG investors.
  • Shares are now consolidating around the capital raising price.
  • The company is fully funded up to the DFS.

General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

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S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

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