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Fast start for KNI with more news on Zero Carbon Battery metals


Published 11-OCT-2021 13:02 P.M.


10 minute read

Kuniko Ltd (ASX:KNI) is exploring for battery metals in Norway, and its main point of difference from the thousands of other metals explorers is that it is 100% focused on delivering its metals using a “Zero Carbon” process, locally in Europe.

KNI’s plan is to discover and extend key battery metal resources in Norway by applying modern exploration techniques to historically mined projects, then apply Zero Carbon extraction methods.

Local, sustainably sourced battery metals are highly attractive to major European car makers and the many new European battery factories.

Today KNI confirmed it was granted 58 additional exploration licences, covering a combined area of approximately 523 km2 in Norway.

We like that KNI has been fast out of the blocks with news, progress and updates AND increasing their exploration portfolio while waiting for initial EM surveys on its first three projects (we are very keen to see these first survey results, hoping they return some EM targets to drill).

Their first new project is 15km from their current cobalt license and is prospective for nickel, copper and cobalt, as well as platinum group metals.

The second project provides an opportunity to expand KNI’s Zero Carbon battery metals portfolio to include lithium, tantalum and tin (Li-Ta-Sn).

The new projects acquired by KNI appear to be continuing its strategy of acquiring historically mined projects and applying modern exploration techniques to expand the historical resource.

KNI also said it is expecting results of geochemical and geophysics analysis on its three initial projects by the end of this month.

ON KNI’S INITIAL PROJECTS: KNI reported a few weeks ago that since completing a soil and rock chip sampling program in August, it has commenced a significant program of airborne geophysics, comprising magnetics, electromagnetics (EM), and radiometric components, (“modern exploration techniques”) across its three original project areas.

WHAT WE ARE WATCHING FOR NEXT: In our opinion, a huge result for KNI would be if the current EM surveys on any of their initial 3 projects reveal large EM conductors BELOW OR NEARBY any historically mined areas. Read our full commentary on what we want to see next here. Today KNI says these results will be coming in the next few weeks. Fingers crossed!

AND we will now be watching for any news on the progress of the two new project areas.

Always remember that investing in small cap exploration is risky, and KNI may not find anything.

HEAR IT FROM KNI MANAGEMENT - KNI will be giving a free webinar presentation on October 21st - you can register here. We don’t know exactly what time KNI will be presenting yet but if you register then you will likely be updated on the timetable of the day.

KNI is a spin out from Vulcan Energy Resources - regular readers know that Vulcan went from 20¢ to around $14 in less than 18 months 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.

Vulcan is currently capped at over $1.4BN.

Vulcan holds 26% of KNI.

We like that KNI will be instantly able to leverage all the key learning and networks that Vulcan has built in the sector AND in Europe, including partners, offtakers, financiers, investors and advisors (assuming KNI’s actually discovers commercially extractable metals of course).

KNI has a number of battery metals exploration projects in Norway.

Why Norway? 98% of Norway's electricity comes from renewable sources, and it leads the way with take up of electric cars - 70% of new cars in Norway are electric. Plus KNI’s projects have been historically mined, so this is a head start compared to green fields exploration. So Norway is an excellent place to be looking for battery metals and do it in a Zero Carbon way.

The production of Electric Vehicle batteries currently requires the mining of metals from all over the world - this requires digging up metals and processing them, generally from remote locations far from battery plants. This causes a lot of carbon emissions before an EV leaves the factory.

KNI is aiming to change this - delivering Zero Carbon battery metals sourced in the EU, supplying local EV makers. There’s a huge and growing market here - the EU one of the fastest growing EV markets in the world. 1 in 12 cars sold in the EU between April and June this year ran on batteries alone. If you count hybrid cars - the sales are 1 in 3.

EU battery makers are desperate to get their hands on a local supply of metals with zero carbon emissions going into their mining.

Today KNI confirmed it was granted 58 additional exploration licences, covering a combined area of approximately 523 km2 in Norway.

This is good because it adds more to KNI’s portfolio of battery metals exploration in copper cobalt and nickel AND it also adds key battery metals lithium, tantalum and tin.

New KNI project #1: Ringerike Project

  • Battery Metals: Nickel, copper, cobalt and platinum group elements.
  • Historical Work: Exploration around the historic Ertelia Mine targeting nickel-copper massive sulphides resulted in encouraging grade intersections including 1.3 m @ 1.97% nickel and 0.58% copper, 3.85 m @ 20.84 g/t gold, including 0.5 m @ 150.2 g/t gold.
  • Comment: The source of this mineralisation has not yet been identified, which is the equivalent of finding a loose thread of wool, but not tracing it back to the wooly jumper where it it originated from... (sorry I’ll try and think of a better analogy next time) - basically most mineral intercepts originate from a “source” where the majority of the mineraistion sits, this is yet to be found on this project, which KNI hopes to do.
  • Next Steps: KNI will compile all historical data from the project to expand the geological understanding of the occurrences and develop an exploration plan to be implemented during 2022.

New KNI project #2: Nord-Helgeland Project

  • Battery Metals: Located in the north of Norway, prospective for Lithium, Tantalum and Tin (Li-Ta-Sn)
  • Historical Work: Originally described by Geological Survey of Norway geologists in the context of caesium exploration potential in 2004, no modern exploration techniques applied.
  • Comment: KNI still needs to determine how prospective this land is before they finalise the exploration license with landowners.
  • Next steps: KNI has already taken some rock samples and they have been sent for laboratory analysis. The results will be combined with geological studies to help develop the work program for 2022 and progress final license approvals.

KNI is one of our largest holdings - KNI had such a strong run after its IPO that we were waiting for the price to settle before we do a deeper dive on why we invested, for now here is a summary reminder:

Here are the 12 reasons we invested in KNI:

  1. "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. We saw that with KNI’s share price performance since ASX listing - going from 20c to as high as $3.60 - KNI’s share price appears to have stabilised around the $2 level now.
  2. 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.
  3. Zero Carbon copper, nickel and cobalt: KNI gives us 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. UPDATE: Now added Lithium, Tin and Tantalum to the KNI exploration portfolio.
  4. 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 potential to be carbon neutral.
  5. 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 systematically explored using modern technology.
  6. Impressive management team and board: The KNI team’s experience and connections (including the same Chairman as Vulcan).
  7. 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. UPDATE: This happened today.
  8. Busy work program is now underway: KNI is very active now ahead of the Norwegian winter across its three project areas.
  9. Leverage off the global networks built by Vulcan: Having spun off from Vulcan, the KNI team has the established relationships and access to potential offtakers, major investors, bankers, technology, and advisors.
  10. Cap structure offers leverage to success: There is a low number of shares on issue (39 million), with VUL retaining one-quarter, meaning that the capital structure is leveraged to success. There are currently no options on issue to dilute shareholders positions on a successful result.
  11. Aiming to be best in class ESG: With a Zero Carbon mandate, we expect KNI to continuously disclose its Environment, Social and Governance to investors and stakeholders, to attract large ESG funds in the future.
  12. Scandinavia is mineral rich and highly supportive of clean energy projects: The region is positioned to support Europe’s desire to have an autonomous and carbon neutral economy.

Kuniko Company Milestones

✅ ASX Listing
✅ $7.8M IPO Raise @20¢ per share
Portfolio Initiation
KNI Share Price Run

🔲 Key Board Appointment
✅ Norwegian Based CEO Appointed (Antony Beckmand)
🔲 Key Consultant Appointment
Existing Project Landholding Expanded 1
🔲 Existing Project Landholding Expanded 2
🔲 New Project Acquired 1
🔲 New Project Acquired 2
🔲 Zero Carbon Studies
🔲 ESG Disclosure and Progression
🔲 Unexpected Positive Announcement 1
🔲 Unexpected Positive Announcement 2
🔲 Funding at Higher Share Price 1
🔲 Funding at Higher Share Price 2
🔲 Unexpected Positive Announcement 3
🔲 Favourable European Regulations

Skuterud Project - Cobalt

✅ Field Studies - Geochemical Sampling
🔲 Assay Results (Geochemical Sampling)
🔄 Geophysical Program
🔲 Drill Targets Identified
🔲 New Milestones Added

Feøy Project - Ni-Cu-PGE

🔄 Field studies - mapping/sampling
🔲 Geophysical Program
🔲 Geochemical Surveys
🔲 Drill Targets Identified
🔲 New Milestones Added

Copper Projects

Romsas, Undal and Vangrofta

✅ Field studies - mapping/sampling (Vangrøfta)
🔄 Geophysical Program (Vangrøfta, Undal)
🔲 Geochemical Surveys
🔲 Drill Targets Identified
🔲 New Milestones Added

NEW: Ringerike Project (copper, nickel, cobalt, PGE)

✅ Acquire licenses
🔄 process historical data
🔲 Announce 2022 exploration program

NEW: Nord-Helgeland Project (lithium, tin tantalum)

✅ Rock samples collected
🔄 Lab testing
🔲 Landowner approval
🔲 Announce 2022 exploration program

Investment Milestones in Kuniko

✅ Initial Investment: @20¢ (Majority Escrowed for 2 Years)
🔲 Increase Position
🔲 Increase Position
✅ Price increases 500% from initial entry
✅ Price increases 1000% from initial entry
🔲 Price increase 2000% from initial entry
🔲 12 Month Capital Gain Discount
🔲 Free Carry
🔲 Take Profit
🔲 Hold remaining Position for next 2+ years

General Information Only

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