How Small Companies Tap Into Larger Capital Markets

• Commentary: How can small companies access bigger pools of capital, from TSX to ASX to.... the NASDAQ? Weekly gold and silver comments, what we are watching this week.
• Quick Takes: SLM, AL3, EIQ, PFE
• This week in our Portfolios: EXR, GUE, TTM

We all want our little stocks to grow into “big” stocks.

There are a number of things that can happen along that rare “small stock to big stock” journey that help things along.

Last week, we talked about the idea of a small company becoming big enough to be included in a “market index” and how it can help small stocks graduate to the “bigger leagues”.

(here it is in case you missed it Index Inclusion: A Small Cap’s Big Leap)

The “All Ords” represents the top 500 companies on the ASX by market cap.

A company being included into the All Ords unlocks a whole new pool of attention and capital, with more institutional money and passive funds deploying capital at the bigger end of the market.

(Four of our companies in our Portfolio just moved into the ASX All Ords index: CAY, ONE, ALA and DXB)

Attention and capital is a key requirement for a small listed company to progress their project and grow bigger.

So, we got thinking...

What other events can occur in the public markets that lead to increased attention and capital to help a small company progress its project?

Most developed countries have one or more stock exchanges.

When a company is listed on a particular stock exchange, in a particular country, it gives that company access to a group of investors that participate in that exchange.

(basically access to attention and capital from that pool of investors)

These investors can buy shares in that company, either directly through capital raisings OR by buying shares on the open market.

The ASX is well known for its culture that embraces speculative resource plays.

The Toronto Venture Exchange in Canada (TSX.V) had historically been a go-to exchange for junior mining and energy companies seeking public capital.

But over the years, increased regulatory burdens and compliance costs have made it hard for small resource stocks on the TSX.V.

Financing and trading volumes thinned out, and investors have lost interest.

Many genuinely good resource projects on the TSX.V are now languishing and grossly undervalued (in our view).

(we will cover why in more detail in a future note)

One thing we are seeing a lot more of lately, is a shift of projects from TSX-V listed companies onto the ASX.

And with the access to increased “attention and capital” on the ASX facilitating a re-rate to more reasonable valuation and ability raise money to advance their project, some examples include:

• Firefly Metals went from a market cap of ~$20M to ~$550M in five years, after bringing its project from the TSX.V to the ASX.
• Patriot Battery Metals went from a ~$550M to a peak of $1.8BN on the ASX - it was still dual listed on the TSX.V and at one point the ASX listing valued Patriot at 2x-3x what the TSX.V did.
• Our 2024 Small Cap Pick of the Year, Sun Silver (ASX:SS1), listed on the ASX at market cap ~$25M and hit a peak market cap of $160M late last year. The project was acquired from a TSX company for ~$4M while silver was unloved. Silver is currently on an excellent run (more on this later).

So the point is, if a genuinely good project can gain access to the broader “attention and capital” of another stock exchange in another country, project valuations can be re-rated.

The next question is... where might ASX listed resources companies go to access additional and bigger pools of attention and capital?

The NASDAQ is the major US “tech” exchange and is not usually known for resources.

The NASDAQ “is the most active stock trading venue in the U.S. by volume and ranked second on the list of stock exchanges by market capitalization of shares traded, behind the New York Stock Exchange”. (Wikipedia)

The market cap for all companies listed in the US is ~US$62 trillion, compared to the ASX which is ~US$1.6 trillion.

But the US interest in early stage resources/mining projects is nowhere near as big as other sectors...

until recently.

A stock exchange at its essence is a way to allow capital to flow to sectors where demand and attention is strongest.

(have you noticed how many small ASX companies change projects to match the current “in demand commodity" for example?)

Trump has made natural resources (critical minerals) and energy central to policy.

He is also pushing two highly publicised, proposed deals with Greenland and Ukraine to get access to their natural resources.

(Trump has even proposed that resource rich Canada become the USA’s 51st state)

US attention is certainly now suddenly and firmly on securing natural resources.

And in true US style, we think the capital will likely start to follow.

So will we suddenly see the emergence of cashed up, US listed resource companies (SPACS?) on the hunt to acquire assets, projects and joint ventures?

Yes, it’s a big call, and too early to tell (but that’s our job).

This week we saw our US uranium resource and enrichment Investment, Global Uranium and Enrichment (ASX:GUE) secure a 19.9% cornerstone investment from a company listed on...

the NASDAQ.

GUE is going into a new US based uranium project as 50-50 Joint Venture (JV) partners with NASDAQ listed Snow Lake Resources.

Snow Lake is also coming into GUE as a 19.99% shareholder, taking $5.8M of the recent capital raise at 6.5c per share.

(read our commentary on the GUE deal with Snow Lake Resources here)

Snow Lake has a market cap of ~A$50M and recently raised US$16M of cash.

Snow Lake has a lithium asset with a pretty small resource (8.2mt at 1% lithium) and a mix of uranium/lithium exploration assets, but it is still capped at A$50M and has been able to get US$16M cap raises away.

Sounds nice being an exploration stock on the NASDAQ, where capital pools are deep and attention in resources is growing...

Comparable companies with similar assets on the ASX are trading at sub A$10M market caps and are finding it pretty difficult to raise cash in the current environment.

We think there is a chance that NASDAQ-ASX deals become more commonplace as the US markets start to show more of an interest in the resources space.

And the ASX is certainly a great place to find resource projects.

I for one welcome our new infinitely cashed up capital market overlords.

The US wants to get its foot on critical minerals quickly

Within his first few months in office, President Trump has cast a big spotlight on the mining industry.

Trump has said he wants to “bring back mining to the United States”...

Concessions for “critical minerals” are seen as a key bargaining chip in the ongoing negotiations for peace in Ukraine.

He has placed 25% tariffs on commodities like steel and aluminium (which applies to every importing country, even Australia), which will have a strong effect on the supply chains for bulk commodities.

Greenland is “on the table”, with the new US administration making overtures in order to access potentially huge deposits on the large island.

Trump has even talked about “taking over” Canada to access its raw materials...

As the “global superpower” since WW2, the US throws its weight around because it can, and with Trump as president, it’s being a lot less discreet about it these days.

AND now it has critical minerals in its sights.

And while Trump makes moves on the global stage to position the US for mining and mineral dominance, we think that Wall Street could also use its muscle (and deep pools of capital) to gain control over key resource projects that the US needs.

If only there was a stock exchange somewhere that has already spent decades developing all sorts of critical metal projects and energy assets...

One that was in a friendly country...

The ASX perhaps?

ASX resource stocks have had it tough the last few years, and there are genuinely good projects out there that are undervalued.

(we are also looking to Invest them)

In a similar way that quality but undervalued projects listed on the TSX.V have re-rated by accessing ASX investors, we think that ASX projects could benefit by accessing “fresh legs” in NASDAQ investors.

The news announced by GUE this week is what we think is the first sign of things to come.

Resources are becoming front of mind for investors in the US.

And after about 30 years of tech focused investing, it could be the resources sector where Wall Street focuses its attention next.

It’s worth pointing out that none of this is new to the US; the Rockefeller empire in New York was built on the emergence of the US oil industry.

And up until the year 2000, the United States was the biggest producer of copper... now it produces just 8% (Source).

Our view is that a positive shift in US sentiment toward critical minerals and natural resources will trigger a wave of capital flowing out of the US looking for resource projects...

And we think some of it will flow into the ASX, which we think has become the best global “VC (Venture Capital)” market of the early and mid stage natural resources industry.

The ASX has done the bulk of the heavy lifting in the early stage resources sector for the last 30 years (from a project generation and financing point of view)...

We will be watching closely for more proof points on this “US money into the ASX” theory.

(let us know if you see any US listed companies or US money doing deals with ASX companies)

Just reply to this email.

Weekly Gold and Silver comments (yes they keep going up)

Gold and silver both delivered significant price rises this week.

Gold is back breaking all time highs, including spending some time trading above the psychologically important US $3,000 per ounce level.

The gold price had a big 5 days this week:

Silver also spent some time above US $34 per ounce and is looking very strong over 3 months, especially the last 5 days (highlighted):

Silver now looks like it might challenge its 12 year highs of ~US $34.8 in the coming weeks.

Keep an eye on SS1 as the silver price rises - SS1 has a 423M ounce silver equivalent JORC resource in the USA.

For every US $1 per ounce increase in the silver price you can do the maths on what it means to SS1’s in-ground 423M silver ounce equivalent resource value.

Given SS1’s primary focus is on silver, its share price usually tags along to strength in the silver price.

Given SS1’s giant silver project is located in the USA, it might be of interest to US investors...

SS1 already secured a major US cornerstone investor last year after US based Nokomis Capital invested $9.2M for a ~9% stake in SS1

Read our most recent SS1 update here

Gold and silver continue to be the undeniable themes at the moment.

Read our gold and silver ebook here, including the 6 gold and silver stocks we are Invested in:

Download the ebook

Webinar updates across our Portfolio

Aside from watching the gold and silver prices incessantly, news on Trump tariff chaos, and our Portfolio, this week a number of stocks in our portfolio hosted webinars for investors to watch.

While we tried to attend most of them, it's impossible to watch them all during a busy week.

So - now it's the weekend, perhaps it's time to watch one or two - here they are, along with links to our takes.

• EchoIQ (ASX:EIQ) - Watch Here | Our Take
• Global Uranium and Enrichment (ASX:GUE) - Our Take
• Titan Minerals (ASX:TTM) - Watch Here | Our Take
• Pantera Minerals (ASX:PFE) - Watch Here

What we wrote about this week 🧬 🦉 🏹

Elixir Energy (ASX:EXR)

EXR's neighbour, Omega Oil and Gas, is currently flow testing its first horizontal well next door.

This week Omega announced that “the fracture stimulation program at Canyon-1H has been successfully completed with excellent results”

In that announcement, Omega had a picture of a well flaring gas BUT we didn't get any numbers on a flow rate yet.

We are expecting initial flow rate numbers from Omega any day now.

Good news for Omega will be good news for EXR...

Read more: ⛏️ EXR: Flow test results from neighbour Omega any day now...

Global Uranium and Enrichment (ASX:GUE)

GTR acquired a 50% interest in a uranium project in Wyoming ~15km away from $30BN Cameco’s ISR uranium processing plant.

Cameco’s plant is the biggest permitted ISR facility in the USA...

GUE will own the project 50-50 in a Joint Venture (JV) with NASDAQ listed Snow Lake Resources.

Snow Lake is also coming in for a 19.99% stake in GUE by investing $5.8M in the company at the recent 6.5c placement.

GUE by default is now having its newsflow shared to NASDAQ investors through Snow Lake.

Great timing with GUE expecting to close a deal on its 21.9% owned “world leading” uranium enrichment technology before the end of the June quarter 2025...

Read more: ⛏️ GUE: Acquiring advanced Uranium development project in the USA, and a new NASDAQ listed 19.9% cornerstone investor...

Titan Minerals (ASX:TTM)

Over the last 12 hours, gold soared past its previous all time record high price set back in February.

It's been a very strong run to US ~$2,990 per ounce, and it's looking to break through the psychologically significant US $3,000 per ounce mark soon...

TTM already has 3.1M ounces of gold and 22M ounces of silver in JORC resources at its main project in Ecuador.

TTM has 3 drill rigs on site right now and is targeting a major resource upgrade for the middle of this year.

Last week TTM delivered some pretty important drill hits below its resource area.

Read more: ⛏️ TTM keeps hitting new gold and silver - current 3.1M oz gold and 22M oz silver JORC resource is going to grow... how big?

Quick Takes 🗣️

SLM - institutional buying & CEO presenting at PDAC

AL3 - Slow and costly US Navy Shipbuilding industry an opportunity for AL3?

EIQ - our key takeaways from the EIQ webinar yesterday

PFE - $353M Standard Lithium & $105BN Equinor hit major milestone in the Smackover, USA

Macro News - What we are reading & listening to 📰

Gold:

Gold May Rise as High as $3,500 in Third Quarter, Macquarie Says (Bloomberg)

• Macquarie predicts gold could hit $3,500 an ounce in Q3, driven by safe-haven demand.
• Rising US deficit concerns and inflation fears are expected to support gold prices.

Utah GOP lawmakers back bill to allow state to pay vendors in gold, help Americans beat inflation (Just the News)

• Utah lawmakers are advancing a bill to allow state vendors to be paid in gold.
• Supporters say it could preserve purchasing power and push the U.S. toward a gold standard.

Copper:

Peru Readies US Delegation Amid Trump's Copper Tariff Threat (Bloomberg)

• Peru will send a delegation to the US to discuss potential copper tariffs that could disrupt trade.
• Exporters like Peru and Chile hope free-trade agreements will help them avoid new US tariffs.

Albanese steels for food fight after critical offer fails to win over Trump (The Australian)

• The Albanese government offers a critical minerals package to the US in exchange for tariff-free access to US markets, aiming to protect Australia’s food and agriculture exports.
• Trade Minister Farrell pledges to defend Australia’s $75bn food export industry amid fears of new US tariffs.

Battery Metals:

Congo's export ban not enough to clear the cobalt glut (Reuters)

• The DRC’s four-month cobalt export suspension has temporarily lifted prices, but history suggests exports will rebound, leading to renewed oversupply.
• While EV makers reduce cobalt use in batteries, Western nations may seek it for defense applications to counter China’s supply dominance.

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