Next Investors logo grey

Vulcan ASX Bags $120M Bucks from Big Name Backers and Banking Behemoth


Published 04-FEB-2021 10:22 A.M.


4 minute read

Where do we even begin...

Vulcan Energy Resources Ltd (ASX:VUL), Our 2020 “Top Pick of the Year” has just raised $120M.

Australia’s richest person and famous mining magnate Gina Rinehart has corner stoned VUL’s capital raise.

Yep, you read that correctly.

This investment into VUL came via “Hancock Prospecting” - the most successful Australian private investment company in history.

This is in addition to son John Hancock, who already took a substantial position (over 5%) in VUL a couple of weeks ago.

VUL aims to produce Zero Carbon Lithium in Europe, and supply to EU electric vehicle battery makers.

VUL’s phenomenal run has seen it evolve into a Tesla-like share price story on the ASX - a market favourite that just keeps rising and rising on the back of the hottest global investing themes in decades: The Electric Vehicle Boom and ESG investing.

Today’s news far exceeds all our expectations.

Now that VUL has $120M in the bank to underpin its valuation and new backers with extremely deep pockets and global connections, VUL has never been closer to becoming that market darling stock like Tesla or Afterpay - or could it become the “Green Fortescue Metals Group”?

Local and International ESG funds featured heavily in VUL’s cap raise, including BNP Paribas’ BNP Energy Transition Fund. BNP Paribas is the 8th largest bank in the world by total assets.

VUL’s strong ESG (Environmental, Social, Governance) credentials is what originally attracted us to invest, and today is the perfect proof point that ASX listed ESG focussed companies can grow to attract big swathes capital from international ESG funds.

And the big names just keep coming...

VUL’s cap raise was led by Goldman Sachs - you might have heard of them... the largest international investment bank in the world.

The serious money has officially entered the game.

So we have Australia’s richest person Gina Rinehart, International ESG funds in a $120M round led by Goldman Sachs.

And you know who else invested in this round?

We did.

Probably not as exciting as some of the other names involved but we are long term investors in VUL, and we have also invested in this round too.

Our investment application amount was significantly scaled back and we heard from other people that their scale backs were pretty savage too - which means there was significantly more money wanting to enter VUL than the $120M that was accepted.

VUL now has MORE than enough cash to take it past its definitive feasibility study and support it right into a ‘Final Investment Decision’ - meaning it is highly unlikely there will any capital raise over the next couple of years at least.

So whether you are a retail investor, a high net worth or an international fund, The ONLY way to get VUL shares in the next few years is to buy them on the market.

VUL has only around 100M shares on issue and they are tightly held by the top 20 holders.

We are expecting a price surge in the coming days as the funds and investors who got scaled back in the cap raise chase VUL stock on the open market, especially given the top shelf names that came into this cap raise.

We have been saying for weeks that occasionally a story like VUL becomes a market darling, like Tesla or Afterpay.

With this amount of cash in the bank underpinning the VUL share price, fresh new backers with pockets deeper than any of us can fathom and an ESG project in the electric vehicle space (the hottest investment themes of the decade) we think VUL is in the prime position to achieve this coveted market darling status.

We want to congratulate our long term readers who invested alongside us in what has been the stock of a lifetime so far, and it appears this first 12 months is only the beginning of what will only become a much bigger story.

In summary, today’s news solidifies VUL with capital to last the next few years - the announcement has far exceeded our expectations and we believe there will be a price run up on this news, specifically around the heavyweight names that have participated in the cap raise.

We are holding this one for the long term.

Here is a quick stroll down memory lane of a few past articles we wrote about VUL incase you are new to the story and want to learn more:

Nov 2019 - 12c Can Vulcan’s Zero Carbon LithiumTM Deliver Emission-Free Cars?

Feb 2020 - 22c REVEALED: Our Top Stock Pick for 2020

May 2020 - 28c Momentum Building in VUL - Our Top Pick of 2020

July 2020 - 52c Our Top Pick Up 100% Since Our May Update – Now with Institutional Backers

Sep 2020 - 84c Tesla Unveils Strategic Battery Plans: What This Means for Our Pick of the Year

Nov 2020 - $1.05 Is VUL Presenting a Buying Opportunity?

Dec 2020 - $2.10 Why are We Staying Up to 3am Tonight?

Jan 2021 - $4.50 Decade of ESG: Six ESG Stocks on the ASX

Jan 2021 - $5.50 Our Key Takeaways from VUL’s PFS - What will the VUL share price do next?

Jan 2021 - $6.70 VUL has Evolved into a Tesla Like Share Price Story

General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.