Gold, Silver, Critical Metals… and Now Oil & Gas? The 2025 Small Cap Rally Heats Up

Commentary: A fourth concurrent macro theme enters the game? What’s up with gold and silver - another big overnight finish at new highs. Back to Africa?

Disclosure: S3 Consortium Pty Ltd and its associated entities may hold direct or indirect interests in securities referred to in this publication and may receive fees or other forms of consideration from entities mentioned. These interests and arrangements may create a potential conflict of interest in the preparation of this material.

The information contained in this communication is provided for general information purposes only and may relate to speculative investments. It does not constitute financial product advice, and has been prepared without taking into account your personal objectives, financial situation or needs. You should consider obtaining independent financial advice before making any investment decision.

It’s starting to feel like the early beginnings of the 2020 bull market...

It’s now week 8 of a buoyant mood in small ASX stocks.

Most stocks are going up.

Even 2020 “bull market darling” IVZ burst out of a long hibernation in spectacular fashion this week.

IVZ was up over 300% in two days on extraordinary trading volumes...

IVZ announced an incredible deal where the members of the Qatar ruling royal family have basically promised to fully fund IVZ’s entire Zimbabwe oil & gas project into development and production.

And invested US$25M for 19.9% of IVZ.

AND IVZ will get a 10% free carried interest in a new, Qatar-funded Joint Venture mandated to find and develop African oil & gas projects (in return for IVZ operating it).

Renewed interest in small stocks started with gold, then was supported by silver, then solidified with the USA critical metals theme.

Will IVZ’s deal bring attention and capital back to a fourth concurrent theme - oil & gas?

We have always said that for a proper, sustained return of a small cap stock bull market we need multiple macro themes to be firing at once.

(not just a false start “flash in the pan” in just one sector like we saw with uranium back in late 2023)

With multiple sectors now firing up at the same time, more and more investors will now be sitting on paper profits and feeling good about putting new money to work.

Traders and flippers will likely have made some good, quick money... and be feeling enough hubris to instantly and aggressively redeploy it back into the market.

And anyone watching from the sidelines will be feeling the itch to get back in.

(even our favourite SubReddit asx_bets seems to be coming alive again).

So eight weeks in, gold, silver, US critical metals and possibly now oil & gas are heating up at the same time, so we are thinking we could be entering a new small cap bull market...

(please indulge us for a minute with the boasting below... at least it's better than the last three years of our depressing comments on how gloomy the markets have been).

On the 28th of June we predicted a return of positive conditions in small stocks:

(source)

So far so good - week 8 and it looks like it wants to keep going.

Here are two other things it looks like we also MIGHT get right based on last night’s gold and silver’s price runs and new highs:


1. We called a possible gold price run at the start of 2023 and have been going overweight in gold stocks since then (source).


In 2024 gold did deliver a big price run.

And last night gold FINALLY closed above the trading range its been stuck in since April this year and finished the week at a new all time high of US$3,446 per ounce (all time high weekly close):

If gold's move last night is in fact the start of a proper “break out” of the “April to yesterday” trading range then we could see a quick move higher, which would be great for our gold stocks...

(and our early 2023 decision to accelerate adding gold stocks to our Portfolio)

Let’s see what happens next week before we get too excited...


2. Silver was our call at the start of 2024 (source), some of our biggest positions are now silver stocks (SS1, MTH and WCE)

Last night silver convincingly closed at new 14 year highs, almost kissing US$40 per ounce a couple of times in the early hours of our morning:

We recently predicted a possible “generational price run” in silver and that if silver breaks above $US40/oz we think it will be “game on” for silver and silver stocks (read it here)

If the silver price does go nuts (which it might not) the good thing about a run into silver stocks is there just aren't many silver stocks on the ASX - meaning any flood of capital will have less places elbow its way into.

(meaning more buying shoehorned into a smaller number of stocks)

The USA Dept of Interior recommending silver to be designated as a “critical metal” this week should help too...

Ok that's enough patting ourselves on the back for now - while the commodity price gods have currently made it appear like we know what we are doing, commodity prices can go up OR down and we could end up being wrong...

Next week is a new week and anything can happen.

More on gold and silver prices further down.

IVZ explodes out of hibernation with one of the best deals we have ever seen...

Here’s one thing we definitely did NOT predict.

Without a doubt the biggest news in our Portfolio this week (and probably for the whole year so far) was the strategic partnership with a senior member of the Qatari Royal Family and Invictus Energy (ASX:IVZ).

We first invested in IVZ back in September 2020...

IVZ was looking to make a giant oil and gas discovery in one of the few underexplored basins in the world, in Zimbabwe.

IVZ is targeting an estimated 5.5 billion barrels of oil equivalent (BOE) over the prospective resource with a “string of pearls” basin margin play.

(we liked IVZ because it reminded us of our first ever big win, Africa Oil Corp, back in 2012)

This week's IVZ announcement had three parts to it:

• A senior member of Qatar’s ruling royal family has invested A$37.8M into IVZ at a 79% premium (9.5c) to the previous closing price (5.3c) to acquire a 19.9% stake in IVZ,
  
  
• PLUS they will provide up to US $500M in conditional future financing to bring IVZ’s Zimbabwe assets into “commercial production”.
  
  
• AND IVZ will get a 10% free carried interest in a new, Qatar funded Joint Venture mandated to find and develop more African oil & gas projects.
  
  

And that Joint Venture wants to become “the largest private Qatari E&P [Exploration and Production] company with interests outside of Qatar”.

That has to be the best deal we have seen any ASX small cap oil and gas stock do in years (if not ever) - especially that last component... how big could that Joint Venture get? Who knows.

The market definitely liked the news, IVZ was up ~135% on the day of the announcement and closed the day at ~13.5c.

After 24 hours digesting the news (and probably re-reading the announcement a few times) the market likely got a much better sense of how big the news was, and IVZ hit a high of 18.5c on Thursday:

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

It's been almost 6 years for us now on the IVZ journey.

We held the majority of our IVZ position even after the unexplained sell off after IVZ’s last successful Mukuyu-2 well.

It went from ~20c to a low of ~4.5c over the last 24 months, so it was a tough hold - but then again so were most stocks in the market during this “bull market hangover” time.

After this week's announcement, IVZ is a much more comfortable long term hold - including to see how that new Joint Venture plays out.

And especially given that IVZ now appears to have access to all the funds it needs to drill, test, develop and get its Zimbabwe assets into production - so no more discounted cap raises with oppies?

Will the IVZ news bring a wave of interest into oil and gas explorers?

We think the IVZ deal could bring market interest back into the small cap oil and gas sector again.

There haven't been many big drilling events happening in the small cap oil & gas space this year and with other sectors running, it has meant that most capital has avoided the space all together.

(we miss following those big, swing for the fences oil & gas drilling events)

Oil & gas explorers appear to be pushing back drilling major wells into 2026-2027 and valuations are low - which we think is a good time to add a few oil and gas names to our Portfolio.

Email in any good ASX oil and gas stocks you think we should take a look at.

Given the general level of investment into the continent proposed by Qatar, we think there could be new interest companies with assets in Africa...

Especially given the mandate for the Joint Venture between IVZ and its new Qatari Joint Venture partner.

The new JV’s mandate is to “acquire and invest in upstream producing and near-term development oil and gas assets across Africa”

Naturally, this led us to look over our Portfolio and check what other African oil and gas explorers we are holding.

We have two other companies in our Portfolio with African oil and gas assets:

1. Grand Gulf Energy (ASX:GGE) which recently acquired a licence application offshore in Namibia - GGE’s application is still pending.
   
   
2. 88 Energy (ASX:88E) which is farming into an onshore block in Namibia.
   
   

(Scott if you are reading this why not swing some of that new Qatari African oil & gas JV money you are in charge of into GGE or 88E via some on market buying? ... not investment advice.)

Both assets are at a very early stage and we have a feeling the desired bet size for the Qatari’s will be in the hundreds of millions (if not billions) so the chances IVZ’s new Joint Venture looks at these two is very low.

We also hold Condor Energy (ASX:CND) whose chairman is Scott Macmillan (IVZ’s MD).

CND’s main asset is offshore in Peru so it has no assets in Africa, BUT now that Scott is a proven mega deal maker and rolling with Middle Eastern networks us mere mortals can barely fathom, maybe he can pull off some sort of mega deal with CND just like he did with IVZ?

Middle East capital to flow into other sectors in Africa too?

Another interesting takeaway from the IVZ deal was its new Qatari JV partner had just come back from a trip around Africa pledging over US$103BN in investments across the continent:

(source).

(yep, “Al Mansour holdings” is IVZ’s new major shareholder and JV partner)

The following article specifically said “A Qatari sheikh has been jetting across Africa this month, meeting presidents and pledging investments that dwarf some of the target countries’ GDPs”

(Source)

Those pledges were into industries outside of oil and gas including “agriculture, livestock, food security, tourism, housing, cybersecurity, and airports”

This new attention and capital flowing into African resource projects could generally be good for some of our other African resources Investments.

In particular:

1. Canyon Resources (ASX:CAY) which holds one of the biggest undeveloped bauxite assets in the world in Cameroon. CAY is aiming to be in production in the first half of 2026...
   
   
2. Minbos Resources (ASX:MNB) which is currently developing its phosphate fertiliser project in Angola - looking to help secure the country's agricultural supply chains.
   
   

So are gold and silver prices going higher?

Gold and silver were the standout performers this week from a commodity perspective.

Gold hit a new all time high and Silver a new 14 year high...

Both are also looking like they want to break out into new highs.

Caution: We are NOT technical chartists, and they might not break into new highs. Past performance is not an indicator of future performance.

For the technical analysts (chart whisperers) out there, do those look like setups before a breakout higher?

Is silver in a generational 50 year “cup and handle formation” forming before breaking out to new highs?

(let us know what you think of our charting efforts)

(read what on earth this means from somebody who sounds like they know what they are talking about here or watch a chartist explaining it here).

Is gold putting in a “bullish flag formation” before a next leg up?

While we have no idea what these terms actually mean, we are sure there are some expert technical analysts reading this who can weigh in on what they think happens next.

HOWEVER Our key takeaway is that many chartists and traders out there DO pay attention to and act on these bullish chart patterns...

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

One macro analyst we follow - Otavio Costa - also thinks silver is about to go on a generational run:

It's also worth remembering Otavio is a gold and silver bull, he has been saying this for a while and could be wrong.

No one really knows where prices for gold and silver are heading...

What could help silver along from a fundamental perspective (where we are more comfortable to comment) is that the US Department Of Interior is considering adding silver to the US critical minerals list.

This news came out on the 25th August (a few days ago).

IF this happens it could lead to a rush into silver names (especially inside the US) of which there aren’t many out there...

(Source)

Here are the silver stocks we are holding at the moment:

• Sun Silver (ASX:SS1) - has the biggest pre-production silver asset on the ASX and in the USA (which could also host a giant antimony resource). SS1’s current resource estimate sits at 480M ounces silver equivalent.
  
  
• Mithril Silver and Gold (ASX:MTH) - 373k ounce gold, 11M ounce silver JORC resource estimate in Mexico. MTH is looking to have three rigs on the ground and grow that resource to ~2.5-3M ounces gold equivalent over the next 12-14 months.
  
  
• West Coast Silver (ASX:WCE) - looking to extend the Elizabeth Hill silver mine (which was the highest grade silver mine in Australia when it was last in production in the 1990’s). WCE is trying to extend the leftover resources at the mine and hopefully make a repeat discovery on its regional targets.
  
  

We’ve been adding gold stocks since 2023 - here is what we are holding in gold:

Producers:

• Kaiser Reef (ASX:KAU) - KAU produced ~4k gold ounces from its recently acquired Henty mine in Tasmania. KAU also owns a processing plant and operating mine in Victoria. We did notice KAU put the Victorian producing asset into a “strategic review” so it will be interesting to see what happens there.
  
  

Developers:

• James Bay Minerals (ASX: JBY) - 1.37M ounce gold JORC resource estimate in Nevada, USA, next door to a joint venture between Barrick and Newmont (N.G.M).
  
  
• Haranga Resources (ASX:HAR) - just acquired ground with replacement costs >$90M in the Mother Lode region in California, USA. That name gives you all the clues you need on the presence of gold in the region. HAR’s ground is where the original Californian gold rush happened. HAR will be the first company to do systematic exploration on the project in decades...
  
  
• Titan Minerals (ASX:TTM) - which has a 3.1M ounce gold, 22M ounce silver JORC resource estimate at one of its four projects in Ecuador. TTM also has a Joint Venture with a subsidiary of Gina Rinehart’s Hancock Prospecting on its copper project in Ecuador. (We could have included TTM in our silver list too).
  
  

Explorers:

• BPM Minerals (ASX:BPM) - just acquired a project in the similar region as the 5.4M ounce tropicana mine owned in a Joint Venture between Regis Resources and AngloGold Ashanti.
  
  
• Resolution Minerals (ASX:RML) - Drilling right now, next door to US critical minerals (and gold) stock $3.1BN Perpetua Resources. RML is trying to make a discovery that resembles Perpetua’s giant 6.6M ounce gold, 200M lb antimony resource.
  
  
• TechGen Metals (ASX:TG1) - has multiple assets spread across WA and a minority interest in a gold project in NSW. TG1’s next big drilling program is on a copper-gold target in WA.
  
  
• Lightning Minerals (ASX:L1M) - just acquired a gold-copper project in Queensland. L1M’s plan was to be drilling within 8 weeks of its last quarterly report so we could see an update on this fairly soon...
  
  

So... it was a great night last night for gold and silver prices - we looking forward to see what they do next week.

And keeping a firm eye on what IVZ will do next too...

Have a great weekend,

Next Investors