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We Just Invested More in this Stock ... ... plus what's happening with VUL and EXR?


Published 18-FEB-2021 12:44 P.M.


4 minute read

We just increased our investment in Minbos Resources (ASX:MNB).

MNB has announced the completion of a $7.3M cap raise at 8c, which the company said was oversubscribed.

MNB is developing a phosphate (fertiliser) project in Angola with a 6 million tonne mining target and a 21 year mine life.

According to MNB, this will be the last cap raise before the definitive feasibility study (subject to unforeseen issues), which means anyone wanting to build a significant position will need to do it buying on market.

The key highlights and why we invested more:

  • MNB’s scoping study delivered an after-tax Net Present Value of $US159 to 260M on just ~$US22 to 28M pre-production capex;
  • There is enough natural phosphate rock for more than 20 years;
  • Phosphate Fertiliser prices have doubled since MNB submitted its bid to the international tender;
  • Transformational social impact of the project attracting strong interest from ESG investors and DFI finance.

MNB has a market cap of $30M at 8c, and is moving closer to project development.

In our opinion, this makes MNB one of the stocks in our portfolio most leveraged to upside.

Check out MNB’s latest presentation here or you can read our most recent commentary.

VUL to Collaborate with Dupont

VUL’s Zero Carbon Lithium® exists to decarbonise the currently high carbon production footprint of lithium-ion batteries used in electric vehicles.

Dupont is the world’s largest chemical company worth US$37.6 billion and are experts at all things water, engineering and processing.

VUL was our 2020 Top Pick of the Year — and what a performance it delivered.

We invested more in VUL a couple of weeks ago at the placement price of $6.50 — we are long term holders in VUL and believe we are at the beginning of the European Union electric vehicle boom. We think VUL will be like a kite caught in the EU EV hurricane.

VUL just announced a collaboration with Dupont Water Solutions to advance its Zero Carbon Lithium extraction — a process which pulls hot, briney water from deep underground, extract lithium and heat, then gently puts the water back.

DuPont Water Solutions is a leader in sustainable water purification and separation technologies — we couldn’t think of a better partner to turbo charge VUL’s ambitions.

VUL says: DuPont will leverage its portfolio of proprietary Direct Lithium Extraction (DLE) products to assist Vulcan with input and test-work during Vulcan’s Zero Carbon Lithium® project Definitive Feasibility Study (DFS). As part of the project, DuPont will be developing and testing an integrated Direct Lithium Extraction Process for Vulcan’s brine. DuPont’s multi-technology portfolio of lithium selective sorbent, nanofiltration, reverse osmosis, ion exchange resins, ultrafiltration, and close circuit reverse osmosis will be leveraged for the study.

We aren’t going to pretend to understand what most of those words in the last sentence mean...

...but thankfully some of Dupont’s 100,000 global employees spend decades understanding it and are going to share it with VUL to speed up the project using their established tech and know how.

It also looks like Dupont wants to move to being clean, green and deliver a positive on the world (we love ESG!) as you can see from these comments:

At DuPont, our goal is to create innovative product and process solutions that help the world thrive — with 100 percent of our products by 2030 directly supporting the United Nations’ Sustainable Development Goals,” said HP Nanda, global vice president and general manager, DuPont Water Solutions.

Many big companies are now fixated on ESG — no wonder they want to partner with ESG golden child VUL.

Read all of our past commentary on VUL here.

What’s happening with the EXR share price?

The EXR share price has leapt up to as high as 23c today on no news — the sell depth looks pretty light on too, so it might be looking to start a run given it has spent most of this year consolidating around the 17c mark.

EXR was our top energy pick of the year in 2019 and since then it has made Mongolia’s first ever gas discovery. EXR is now progressively unlocking a massive, clean burning, natural gas source in Mongolia.

This gas resource is right on China’s doorstep and could help China replace burning coal for its energy needs.

We have been delighted with our investment in EXR to date, having invested three times — at 3.9c, 2c (right during the Covid market crash) and most recently at 13c.

We aren't sure what is causing today’s share price run: it might be a delayed reaction from Monday’s 2021 work program news release that says EXR will start delivering more drilling in a few weeks.
Four wells are scheduled in the April to June Quarter as part of EXR’s increasing work program.

Exploration stocks usually enjoy runs in the lead up to drilling.

Read all of our past commentary on EXR here.

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