Our Latest Investment: Nico Resources (ASX: NC1)

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 1,785,838 NC1 shares at the time of publishing this article. The Company has been engaged by NC1 to share our commentary on the progress of our Investment in NC1 over time. This information is general in nature about a speculative investment and does not constitute personal advice. It does not consider your objectives, financial situation, or needs. Any forward-looking statements are uncertain and not a guaranteed outcome.

We think the world is about to enter an “every commodity” bull run.

(driven in part by the recently opened “Pandora’s box” of countries withholding metals supply to slow down their adversaries’ military, productivity or AI advancement efforts)

If this “every commodity” bull run happens, we suspect nickel and cobalt prices will run hard, off their low bases.

Especially considering all the nickel needed for the billions of autonomous AI robots forecast to be built to save time in people's homes, turbocharge productivity in the economy...

...and deliver military dominance on the battlefield.

Our latest Investment is Nico Resources (ASX:NC1).

NC1 owns 100% of one of the largest undeveloped nickel projects on the planet.

An initial reserve of 1.56 million tonnes of contained nickel, capable of producing approximately 40,000t of nickel and 3,000t of cobalt annually...

For at least 42 years.

NC1 just raised $3.76M at 30c/share, which equates to a market cap of $41M.

... but back in 2022, when everybody loved nickel for electric vehicle batteries and the nickel price was spiking, NC1 traded as high as $2 per share.

(Nickel is a key ingredient in batteries - for electric vehicles, autonomous AI robots and general energy storage.)

Our new Investment in NC1 is essentially like a leveraged bet on the nickel price surging, and the economics of NC1’s asset improving significantly in parallel.

We think NC1’s Tier 1 asset is something that a major mining company would want to own at some point - given the long term stable cash flows it could spin off once in production (more on that asset and economics later).

(the past performance of NC1 is not and should not be taken as an indicator of future performance)

After 3 years in the proverbial “sin bin” of investor portfolios, we think battery metals like nickel are about to make a big comeback... we’ll explain why in a second.

Especially in a rapidly deteriorating geopolitical landscape where countries that were previously reliable suppliers are now withholding or limiting critical metals to “slow down” adversaries in key strategic areas.

And a country can’t build an autonomous AI robot army without thousands of tonnes of nickel...

We think countries could soon rethink selling/sharing their nickel supply for strategic and military reasons.

Probably even just to hobble adversaries’ efforts for robot driven productivity gains in their economy... why not, right?

Here’s a video from Chinese company UBTECH’s “World’s First Mass Delivery of Humanoid Robots” released a few weeks ago:

(there’s probably about a tonne of nickel in this image - our estimates only - please don't hold us to this)

So whether the guys in this video will end up holding a vacuum cleaner in the home, carrying a box in a warehouse or waving around an AK-47 on the battlefield....

The autonomous AI robots are coming...

And they are going to need a lot of metals - especially nickel.

And if the nickel price DOES really pop again in 2026... we think companies like NC1 with Tier 1, global scale projects should rise again.

The nickel price just ticked up for the first time in years over the last few weeks, and we think it could be at the start of its comeback.

(source)

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.

Nickel is the most volatile commodity of the base metals suite - and historically, base metals moves up tend to follow/lag precious metals moves up.

This current early nickel price move feels similar to the start of 2024, when the silver price just started creeping up for the first time in years, and we added our first two silver stocks.

Although we could be wrong - nickel might not move violently upwards like we have seen with silver recently...

The other key thing that attracted us to NC1 is the clean capital structure.

After the shares from today’s cap raise are issued NC1 should only have ~136M shares on issues and very few options.

Plus a strong team, led by Non-Exec Chairman Peter Cook - one of the legends of the Australian mining industry, who has made us money in the past (more on him and his string of multi-billion dollar success stories down below).

Today we will run through:

• why we just Invested in NC1, taking a long term view,
• our “Big Bet”,
• outline our Investment Memo, and;
• what we want to see NC1 execute on over the coming 12 months.

But first, here are the 9 reasons why we Invested in NC1:

9 reasons why we Invested in NC1

1. NC1 has one of the biggest undeveloped nickel-cobalt projects in the world

NC1 has a JORC resource of ~1.68 million tonnes of nickel and 132k tonnes of cobalt, making it one of the top four largest undeveloped projects in the world. NC1’s project was granted Major Project Status by the Australian government in 2024.

2. Current market cap is only ~$41M.

During the 2022 nickel and battery metals bull run NC1’s share price was close to $2 per share and its market cap ~$160M+. Now NC1’s market cap is ~$41M and its share price 30c per share.

We also think NC1 currently trades at a steep discount to its comparable peers such as Alliance Nickel, Ardea Resources, and Australian Mining based on project reserves and grade.

3. We are backing mining legend Peter Cook (“Cookie”) here.

Before today’s placement industry legend Peter Cook owned ~11.8% of NC1 shares and is the Non-Exec Chairman.

NC1 came out of his other success story Metals X (more on Metals X below).

Another spin out from Metals X was Westgold Resources, now capped at over $6BN.

Cookie is also Non-Exec Chairman of one of our best performers from 2025 (TTM) which was up ~132% over the last 12 months.

We are backing Cookie in NC1 to deliver as he has for decades in a string of companies.

4. Lowest cost quartile once in production

NC1’s project, once developed, would have operating costs in the first quartile of projects around the world on a nickel equivalent basis. This means the project would be among the 25% cheapest producers once in production.

5. We think future demand for nickel will be underwritten by a mega thematic (humanoid AI robots)

We think “robot metals” will be the next big investment thematic in the resource sector.

The age of the robots is upon us, and billions of humanoid robots are expected to live, work (and fight?) alongside us over the coming years.

They are all powered by similar batteries to Electric Vehicles. We also think securing strategic nickel supply from allies to build AI robot armies will soon be a thing.

6. We think NC1 is the most leveraged nickel exposure on the ASX (basically a giant call option on nickel prices)

When commodity prices run, it's the companies with the biggest resources that are usually leveraged the most to the underlying price moves.

If nickel prices were to go parabolic, we think NC1 will be the preferred nickel development exposure the market looks for (which could re-rate the company’s share price from where it is today).

7. Project is advanced with a PFS completed in 2022 and a DFS on the way

NC1’s Pre Feasibility Study (PFS) showed a Net Present Value of ~$3.34BN using ~US$20,000 nickel prices.

We think that NC1 has had to streamline and make its project as efficient as possible which should mean the upcoming Definitive Feasibility Study is NC1’s best foot forward from an achievable development plan perspective.

8. Spin out from ~$1BN tin miner Metals X

NC1 was born as a spin-out from Metals X, which means the asset was “vend” out by a corporate and not by private vendors.

Metals X still hold their shares in NC1 which tells us the capital structure for NC1 is fairly tight (with a sticky vendor).

9. Tight and clean capital structure

NC1 only has 136M shares on issues (post cap raise) and very few options on issue, which means the share price can move quickly, plus several large and (presumably) sticky shareholders (Chairman Peter Cook with ~11.8% and MetalsX with ~7.5%)

Ultimately, we hope the above reasons contribute to NC1 achieving our Big Bet which is as follows:

Our NC1 Big Bet:

“NC1 re-rates to $500M+ market cap in a market where the nickel price is rising & as a result, NC1’s project is being considered a takeover target by majors looking for nickel exposure”

NOTE: our “Big Bet” is what we HOPE the ultimate success scenario looks like for this particular Investment over the long term (3+ years). There is no guarantee that our Big Bet will ever come true. There is a lot of work to be done, many risks involved, including development risk, country risk and commodity price risk - just some of which we list in our NC1 Investment Memo.

Success will require a significant amount of luck. Past performance is not an indicator of future performance.

Where NC1 fits into our broad Investment strategy

At the start of last year we released our “strategy for 2025”.

We stuck to that Investment strategy over the course of last year, and so far it’s working out pretty well.

Gold and silver, defence metals etc were all the market darlings for 2025, and the first few weeks of 2026:

(Source - our 2025 Investment Strategy 11th Jan 2025)

The only thing we didn’t manage to add to our Portfolio in 2025 was a high quality, countercyclical, beaten down, later stage battery metals project - or should we say...

Robot Metals

“Robot metals” is a new big macro tailwind that we think will support nickel price sentiment and NC1 over the next couple of years.

... billions of autonomous robots are expected to be built over the coming decade.

It just so happens the same “battery metals” that were loved, then hated by the market go into batteries that power autonomous AI robots.

Robots that are expected to soon be in the home, in factories and in the military...

The country to win the AI and AI robot race will likely become the new global superpower, both from robot driven productivity gains and robot driven military dominance.

(So securing metals supply domestically OR from allies has become urgent and of strategic importance).

So the autonomous AI robots are coming...

“Billions and billions” of them, according to Elon Musk.

Elon’s company Tesla has a “late 2026 or early 2027” launch date planned for his similar Optimus robot.

Tesla is just one of many US companies entering the AI robot market - the West's answer to what appears to be China’s head start in mass producing autonomous AI robots.

Elon isn’t the only one who thinks “the robots are coming”:

(Source)

Tesla’s choice of battery chemistry for its robot strategy could mean that those billions of robots need millions of tonnes of nickel...

NC1 has already proven its nickel can be turned into battery grade product (MHP):

(source)

Currently (before the robots take over), the majority of nickel demand goes into stainless steel (64-70% of demand), EV batteries take about 15%, and 9-12% if taken up by high performance alloys for aerospace, defence, energy, and marine applications.

70% of the demand for cobalt is taken up by EVs, which is expected to grow to 90% by 2030.

Indonesia is the world’s dominant supplier of nickel, holding the largest reserves and producing nearly two-thirds of global supply.

Indonesia’s dominance is driven by its massive ore deposits and a 2020 ban on unprocessed ore exports that spurred massive investment in domestic processing, largely by Chinese companies.

This created a huge nickel processing industry for EV batteries, though the Indonesian government plans to cut production in 2026 to support prices and manage environmental concerns.

As we said above, our Investment in NC1 is basically a bet on the nickel price surging, and global supply not keeping pace with new demands such as autonomous robots...

Which might be the tailwinds needed to get NC1’s Tier 1 nickel asset out of the development stages and into production.

More on NC1’s Tier 1 nickel asset

NC1 owns a giant 187.3Mt nickel-cobalt resource in outback Australia.

(the project has an estimated 1.698Mt of nickel and 106kt of cobalt)

NC1’s asset is genuinely “Tier 1” in terms of size/scale - that term gets thrown around a fair bit with small caps, but this is a real monster - once built, it will produce nickel for over 40+ years...

“Tier 1” assets are typically long life, low cost, with high operating margins - they are the type of mega projects that major mining companies take on (or buy).

Big companies like them as they can be "company-making" mines that generate high, reliable returns regardless of the mining cycle.

NC1’s 100% owned project is the fifth largest undeveloped nickel-cobalt asset in the world (outside of Indonesia) - and is the highest grade out of the top 5:

(source)

So given its size and grade, it’s definitely a Tier 1 asset typically owned by majors, not junior companies like NC1.

We remember saying similar words a few years ago when we first Invested in Canyon Resources (ASX: CAY) and its Tier 1 bauxite asset at a $62M market cap. Now CAY is capped at ~$623M, allowing for the as yet completed tranche 2 placement from the recent capital raise.

Other “giant projects” we have successfully Invested in, expecting a price run in the commodity (that came), include SS1 for silver, and VUL for lithium.

(The past performance of those companies is not an indication of the future performance of NC1)

NC1 just raised $3.73M at 30c. At that share price, NC1 is capped at $41M.

NC1 was once capped as high as ~$160M back in 2022 when the nickel price was running off the back of the EV boom.

NC1 was actually a spin-out of the now $1.06BN Metals X who held ~8.4% of NC1 prior to this raise. (source)

The other spin out from Metals X was Westgold Resources in late 2016 - Westgold now has a $6.5BN market cap.

The Metals X CEO Brett Smith said on a recent podcast that “it's a great asset”, “one of the best undeveloped nickel-cobalt assets in the world” when asked about NC1.

He also said “like all of the laterite jobs, it just requires a huge amount of CAPEX to get it started”.

But the one thing still living rent free in our heads is when Brett says "it'll eventually get built”...

IF/when it does, we expect NC1’s valuation could be materially higher than where it is today.

We are following industry legend Peter Cook into NC1

The one man in common with Metals X, Westgold Resources and NC1 - is NC1 Chairman, industry legend, and all round nice guy, Peter Cook, or “Cookie” as he is affectionately known.

We are also following him into NC1 here.

Peter Cook is Non-Exec Chairman of our best performing stocks from 2025 - Titan Minerals (ASX: TTM).

TTM was up 132% in 2025...

(past performance is not an indication of future performance)

As well as Metals X and Westgold, Cookie was also involved with Breaker Resources which got taken over for $130.7M in 2023.

Cookie has won a bunch of big industry respected awards like the GJ Stokes Memorial Award presented at the annual Diggers & Dealers conference in Kalgoorlie last year.

Previous winners of awards like that were Gina Rinehart...

He has also taken out Mining Executive of the Year (2001, 2017) from GMJ/Mining News, the Asia-Mining Executive of the Year (2015), and the Gavin Thomas Mining Award (2019).

Cookie owned 11.8% of NC1 prior to today and actually added to his position in 2024 and 2025:

(source)

(source)

We think it’s time to go long nickel...

We think the nickel market was one of the most hated in the market over the last few years.

The perfect time to pick up a genuine, Tier 1 undeveloped asset that we can hold long term.

One that offers a lot of leverage to nickel prices (size/grade/scale) that could one day have corporate appeal from some of the biggest companies in the world.

NC1’s project is the fifth biggest undeveloped nickel equivalent resource in the world and of the top four, it has the highest grade... (outside of Indonesia).

While it may not be a part of the nickel story – the east/west bifurcated metals market thematic could one day be at play in the nickel sector too.

(source)

Speaking of corporate appeal – NC1’s project is actually a few hundred kilometres away from BHP’s Musgrave nickel operations that were put into care and maintenance in 2024.

NC1’s project has already had a Pre Feasibility Study (PFS) completed in December 2022 and returned project economics of:

- Net Present Value (NPV) = $3.34BN.

- Payback period of 4.9 years

- Internal Rate of Return (IRR) = 18.02%

All from CAPEX of ~$2.9BN, using a nickel price of ~US$20,000 per tonne.

The same study also showed that if nickel prices traded at US$30,000 per tonne, the project’s NPV would almost double to $6.5BN...

(Source)

We think NC1’s asset offers the most leverage to nickel prices in the junior end of the market.

That PFS done back in 2022 showed the project’s NPV increases by ~A$800M for every 10% rise in the nickel price above US$21k per tonne:

(Source)

The reason why NC1 trades where it does today is because of how sensitive the project is to nickel prices – and because nickel prices have traded lower than its base case price for the past ~3 years.

(Though they have been creeping up of late – the nickel price is slightly below, and cobalt prices slightly higher than the numbers used in that 2022 PFS).

The reason we are backing NC1 is because if the nickel price ever goes to US$25,000, $35,000 or $40,000 per tonne...

The project is one of those that the market could see as the quickest and easiest way to get leveraged nickel exposure.

AND as a potential alternate supply option if supply out of the major producers (like Indonesia) is ever challenged.

Interestingly, we have been hearing about potential supply shocks out of Indonesia a fair bit more over the last 12 months:

(source)(source)(source)

All it takes in today’s less globalised version of the world for a few export bans or countries to threaten export controls and we could be looking at a completely different nickel industry.

Where the west especially is susceptible to supply shocks...

And there’s cobalt too

NC1’s project also has the ability to produce a fair bit of cobalt too (~3,000 tonnes per annum).

Cobalt is another critical mineral susceptible to supply shocks with ~75% coming from the Democratic Republic of Congo (DRC).

If there is anything we have learnt in the post COVID world is that the Western supply chains can't handle supply shocks for critical materials.

NC1 also has a Definitive Feasibility Study on the way...

We like that NC1 has been forced to do its DFS in what has very clearly been a “bear market” for nickel assets.

Basically, NC1 has been forced to cut costs wherever possible, and make the project capital efficient enough for it to stand on its two feet in the toughest of nickel markets.

NC1 has also had years to refine its project’s metallurgy - meaning the processing will be as efficient as possible too.

Here is an overview of the planned development:

(source)

Given that costs were already in the first quartile of any nickel assets globally - we think any improvements could make the project stand out even more:

(Source)

Now all eyes on that DFS that’s being worked on (fingers crossed nickel prices are up another 20-30% by then).

Nico Resources
ASX:NC1

Investment Memo 1: Nico Resources (ASX:NC1)

Memo Opened: 20th January 2026

Shares Held: 1,785,838

What does NC1 do?

Nico Resources (ASX:NC1) owns 100% of one of the biggest undeveloped nickel-cobalt projects in the world.

NC1’s project has a resource of over 1.56 Million tonnes of nickel - with a mine life of 40+ years.

What is the macro theme behind NC1?

Nickel and cobalt are critical raw materials in the production of electric vehicle batteries.

They are also critical raw material for building humanoid AI robots.

We expect that the electrification of global car fleets along with a build out of billions of AI robots will result in exponential increases in nickel demand.

Our NC1 Big Bet

“NC1 re-rates to $500M+ market cap in a market where the nickel price is rising & as a result, NC1’s project is being considered a takeover target by majors looking for nickel exposure”

NOTE: our “Big Bet” is what we HOPE the ultimate success scenario looks like for this particular Investment over the long term (3+ years). There is no guarantee that our Big Bet will ever come true. There is a lot of work to be done, many risks involved, including development risk, country risk and commodity price risk - just some of which we list in our NC1 Investment Memo.

Success will require a significant amount of luck. Past performance is not an indicator of future performance.

The 9 Reasons We Invested in NC1

1. NC1 has one of the biggest undeveloped nickel-cobalt projects in the world
   
2. Current market cap is only ~$41M.
3. We are backing mining legend Peter Cook (“Cookie”) here.
4. Lowest cost quartile once in production
5. We think future demand for nickel will be underwritten by a mega thematic (humanoid AI robots)
6. We think NC1 is the most leveraged nickel exposure on the ASX (basically a giant call option on nickel prices)
7. Project is advanced with a PFS completed in 2022 and a DFS on the way
8. Spin out from ~$1BN tin miner Metals X
9. Tight and clean capital structure

What do we want to see NC1 do next?

Objective 1: Drill out and upgrade defined resources

We want to see NC1 drill out and upgrade its current resources. We are especially looking for increases to the categories of the resources.

Milestones:

🔲 Drilling commences

🔲 Drilling completed

🔲 Resource upgrade completed

Objective 2: Definitive Feasibility Study (DFS)

We want to see NC1 deliver its DFS - and hopefully improve on the numbers released in the PFS in 2022.

Milestones:

🔲 Processing flowsheet optimisation

🔲 Mine plan/infrastructure optimisation

🔲 Definitive Feasibility Study completed

Objective 3: Project funding solution

Ultimately we want to see NC1 reach FID and finance the build of its project.

Between now and then a cornerstone coming in and backing the company could de-risk financing materially (similar to what we saw happen with our Investment Canyon Resources and Eagle Eye Asset Management).

Milestones:

🔲 Final Investment Decision

🔲 Project Debt

🔲 Project Equity

🔲 Strategic partner comes into NC1 or NC1’s project

What are the risks?

Commodity price risk

The performance of commodity stocks are often closely linked to the value of the underlying commodities they are seeking to extract. Should nickel prices remain low for extended periods of time, it could hurt NC1’s share price.

Market risk

Broader market sentiment could deteriorate, and shares as an investment class trade lower, taking NC1’s share price with it. Alternatively, there could be further sector specific pain ahead where junior explorers suffer a lot more than the broader market.

Funding risk/dilution risk

As a pre-revenue small cap company, NC1 is reliant on capital markets to advance its projects. If something negative happens at a macro or company level, NC1 could struggle to access capital on favourable terms.

These capital raises may take place at a discount, and result in the issuance of new shares which incur dilution to existing shareholders.

Delay risk

Should any or all of the above risks materialise, NC1 could wind up stuck in “development purgatory” where newsflow dries up and the project remains stagnant for a prolonged period of time, hurting the share price. Additionally, if delays occur in terms of material newsflow, the market could turn on NC1.

Other risks

Like any small cap development company, NC1 carries significant risk, here we aim to identify a few more risks.

The company’s flagship project will require a large capital expenditure spend to get into production. There is no guarantee NC1 are able to raise those funds.

There is no guarantee that the upcoming Definitive Feasibility Study (DFS) will deliver the economic metrics required to secure financing, or that the project can be built within the estimated costs given the current inflationary environment either.

NC1’s valuation is heavily leveraged to the nickel price and market sentiment. If the current supply glut from Indonesia persists or demand from the battery sector softens, nickel prices may remain suppressed. This could impact the project's economics and potentially re-rate the stock lower.

NC1’s project utilises High Pressure Acid Leach (HPAL) technology, which historically carries technical execution risks and complex ramp-up periods. Additionally, operating in the remote Musgrave region introduces logistical and infrastructure challenges, such as securing water and energy, that could cause delays.

Finally, while the project has "Tier 1" potential, there is no guarantee that a major partner or acquirer will step in.

Investors should consider these risks carefully and seek professional advice tailored to their personal circumstances before investing.

What is our Investment Strategy?

Our plan is to hold the majority of our position in NC1 for 3 to 5 years, which should be enough time to see a pick up in nickel prices and how that might affect NC1’s share price.

After 12 months we will apply our standard de-risking strategy.

We may look to sell up to 20% of our holding if the company delivers on one or more of our Investment Memo objectives and/or the share price materially re-rates in line with our minimum hold conditions.

We intend to maintain a position in NC1 for 3 to 5 years.

Any sell downs will be in accordance with our trading and hold policy disclosure.