Introducing Kuniko (ASX:KNI): 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:

Regular 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...).

KNI’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 projects

Here 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 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 KNI

We 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:

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.
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: 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.
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 analysed with modern technology.
6. 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.
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.
8. Busy work program is now underway leading up to 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 leveraged to growth: Low number of shares on issue (39 million), with VUL retaining one-quarter, meaning that the capital structure is leveraged to success. There are no options on issue to dilute shareholders positions.
11. 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.
12. 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 KNI

Here 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:

✅ ASX Listing
✅ $7.8M IPO Raise @20c per share
✅ Portfolio Initiation
🔲 Key Board Appointment
🔲 Key Management Appointment
🔲 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

Our Project Milestones for KNI:

Here is our early milestone expectations of KNI’s for each individual project across copper, nickel and cobalt - we will update these in our deep dive commentary later:

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
🔲 Geophysical Program
🔲 Geochemical Surveys
🔲 Drill Targets Identified
🔲 New Milestones Added

Investment Milestones

Here is our usual investment milestones and strategy for KNI:

✅ Initial Investment: @20c (Majority Escrowed for 2 Years)
🔲 Increased Position
🔲 Increased 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

Last minute bonus content: Battery metals getting attention (and investment) from Bill Gates and Jeff Bezos

Like lithium, battery metals projects including KNI’s are attracting increasing investment in the region. The Bill Gates and Jeff Bezos-backed KoBold Metals is injecting £11M (A$20M) into the geological evaluation and drilling of a new major nickel, copper and cobalt project in Greenland, which it is set to develop with AIM-listed Bluejay Mining.

What we are watching for next

We are looking forward to following the KNI story as investors for the next few years, we hope that it can emulate some of the success that Vulcan had.

In short, up next we expect some early results of rock chip sampling and commencement of modern exploration techniques on KNI’s historically producing assets. We will provide more detail once the things have settled down post IPO launch in about a week’s time via our deep dive note.

See you then