Readers who follow our Investment Portfolios will know that we have been making strategic Investments in commodities that have made critical minerals lists for the EU, USA, Japan, India and Australia.

These minerals are considered critical to the digitisation and decarbonisation macro thematic and include lithium, graphite, cobalt, nickel and PGE’s, to name a few.

Over the weekend, the following speech from the president of the European Commission, Ursula von der Leyen, gave a speech announcing that the EU would look to pass a “European Critical Minerals Act”.

The aim is to avoid the position Europe finds itself in with oil and gas, where it relies on a single trading partner like Russia.

The act would see the EU put in place:

1. Agreements with partners like Chile, New Zealand, Mexico, India and Australia for the supply of critical minerals.
2. Identification of strategic projects across all along the supply chain from mine sites to processing/refining projects.
3. The act would also see the setting up of strategic reserves of these critical minerals.

All of this bodes well for our Investments across commodities identified as “critical minerals” giving these projects strategic importance on the world stage.

To see a list of all the critical minerals in the Australian Critical Minerals strategy document, check out the following link.

Here is a snippet from that speech:

This morning our US-based uranium exploration Investment GTI Energy (ASX: GTR) confirmed that its drill rigs were being mobilised ahead of its 2022 drilling program.

GTR’s 2022 drilling program will be for a total of 100,000 feet (~30,000 metres) at its uranium projects in Wyoming.

Drilling is expected to start this week and is expected to be completed by Christmas.

The ultimate aim of this drilling program is to put out a maiden uranium resource estimate or, at the very least, an achievable exploration target to base future exploration programs.

We will measure the success of GTR’s drilling program against the following expectations:

• Bull case = Uranium intercepts lead to a maiden JORC resource.
• Base case = Enough uranium intercepted to put together an achievable exploration target.
• Bear case = No uranium is intercepted. Projects are considered stranded.

We did a deep dive on the upcoming drilling program in our most recent GTR note which you can read here: GTR launching USA uranium drilling campaign.

The latest country to announce nuclear as a critical future source for baseload energy generation in India.

The following Bloomberg article highlights recent developments in India, which is aiming to shift its coal heavy energy mix to cleaner sources of power generation.

Read the full article here.

Our key takeaways:

• India’s largest power producer is looking to develop more nuclear power plants.
• India is currently building six gigawatts of nuclear capacity, the most after China, which has nearly three times that volume under construction.
• The Indian government aims to triple India’s nuclear fleet over the next decade as it looks to decarbonise its energy grid.
• The move is part of India’s pathway to a zero carbon economy by 2070.
• Mumbai based Deloitte partner Debasish Mishra also thinks that “From a carbon footprint point of view, nuclear is the best form of baseload power and that makes it a crucial part of India’s journey to net zero.”

We have long held the view that nuclear is a key part of the future global energy mix, especially regarding baseload energy generation.

Nuclear power has one of the lowest carbon footprints and highest utility rates of all renewable energy technologies currently available.

We think this, combined with its ability to operate on an almost 24/7 basis, makes it the ideal technology to sit alongside more intermittent renewable energy technologies like wind and solar.

We believe that more countries will follow the likes of India and China and eventually invest heavily into nuclear power to meet climate change goals and secure energy supplies domestically.

With uranium being the primary fuel source for nuclear power, we think our uranium exploration investment GTI Energy (ASX: GTR) is well positioned to benefit from capital inflows into the uranium industry.

To see the key reasons why we are Invested in GTR and the key objectives we want to see the company achieve in 2022, check out our 2022 GTR Investment Memo by clicking here.

This morning our US-based uranium exploration Investment GTI Energy (ASX: GTR) announced it has completed all required permitting for its 2022 drilling program.

GTR is planning a 100,000 foot (~30,000 metre) drilling program across its uranium projects in Wyoming. Drilling is due to start in the coming weeks and should be completed by Christmas.

GTR plans to drill ~130 holes across five different targets, following up on drilling done earlier in the year when the company announced a maiden discovery.

The ultimate aim of this drilling program is to put out a maiden uranium resource estimate or, at the very least, an achievable exploration target to base future exploration programs.

We will measure the success of GTR’s drilling program against the following expectations:

• Bull case = Uranium intercepts lead to a maiden JORC resource.
• Base case = Enough uranium intercepted to put together an achievable exploration target.
• Bear case = No uranium is intercepted. Projects are considered stranded.

We did a deep dive on the upcoming drilling program in our most recent GTR note which you can read here: GTR launching USA uranium drilling campaign

This morning we noticed that our US uranium exploration Investment GTI Energy (ASX: GTR) would be presenting the virtual Metals and Mining conference powered by OTCMarkets.

GTR’s Executive Director Bruce Lane will be presenting at 11:30 pm AEST tonight.

For readers who want to stay up late and view the presentation, they can do so using the following link: https://www.virtualinvestorconferences.com/

This morning our US based uranium exploration Investment GTI Energy (ASX: GTR), put out its quarterly reports ahead of the month end deadline.

One thing that stood out to us was the strong cash position GTR has managed to put itself in ahead of its planned drilling program across its uranium projects in Wyoming.

The company held $6.9M in cash plus 5,000,000 shares in Regener8 Resources (worth ~$825k based on Regener8’s current share price of 16.5c per share).

With GTR trading at a market cap of ~$22M, this would give the company an enterprise value (EV) of ~$14.3M after the cash and shares are accounted for.

Next:

We look forward to seeing GTR kick off its 100,000 foot drilling program across its uranium projects in Wyoming, USA, to follow up on its discovery earlier this year.

Spanning three days on the pristine Sunshine Coast of Queensland, the Noosa Mining Investor Conference kicked off its 12th year on Wednesday. Attracting a diverse and large spread of corporates, brokers, retail and institutional investors, this year’s event featured over 60 companies presenting and over 1,000 people in attendance, all hosted within the coastal town's Peppers Resort.

At the event, we caught up with a number of executives from our Investment companies (including AKN, AOU, BPM and PFE) as well as companies of interest, either as potential additions to one of our Portfolios, or to gain expert insight to macro and regional headwinds impacting the markets.

The conference is held in the ideal location to mix work with pleasure, and meet a host of CEOs of ASX juniors. Each day ends with a short ‘business at the bar’ session that quickly morphs into talking tactics about where to eat and drink. On Thursday and Friday nights, many head to the Noosa Surf Club for its networking sessions, enjoying its glassed indoor area and open deck to the beach.

We look forward to providing updates on companies we met with down the road.

Nuclear power is starting to form a more significant part of the world energy mix, as highlighted by Japan’s decision to bring up to nine nuclear reactors online. The following Bloomberg article highlights the importance of nuclear power in the future of the global energy mix.

Read the full article here.

Our key takeaways:

• Japanese PM Fumio Kishida is said to be asking for as many as nine nuclear reactors to be turned online to help with an expected power crunch.
• Kishida said, “There are concerns about a power shortage this winter […]. We must prevent this situation.”
• Japan’s Ministry of Economy, Trade and Industry will do what they can to push for nine reactors to operate in winter, which can cover roughly 10% of Japan’s power consumption.
• Ten of Japan’s 33 operable nuclear reactors have been restarted under post-Fukushima safety rules. The nuclear regulator cleared seven additional units, but none of these has restarted due to required upgrades or lack of local support.

The Bloomberg piece provides a good snapshot of the urgency at the government level to avoid domestic energy crises like the ones we are witnessing in the EU and in emerging economies such as Sri Lanka.

The drive toward energy independence isn't only a Japanese problem. We expect to see the rest of the world go down a similar path, whereby nuclear power starts to form a more significant part of the world's energy mix.

Nuclear power has one of the lowest carbon footprints and highest utility rates of all renewable energy technologies currently available.

We think this, combined with its ability to operate on an almost 24/7 basis, makes nuclear power the ideal source for baseload energy generation.

With uranium being the primary fuel source for nuclear power, we think our US uranium exploration investment GTI Energy (ASX: GTR), is well positioned to benefit from capital inflows into the uranium industry.

To see the key reasons why we are Invested in GTR and the key objectives we want to see the company achieve in 2022, check out our 2022 GTR Investment Memo by clicking here.

China plans to make up to US$1.1 trillion in financing available for infrastructure spending, which we think will increase commodity demand. Read the following Bloomberg article for details.

Read the full article here.

Below are our key takeaways:

• China is making 7.2 trillion yuan ($1.1 trillion) in funds available for infrastructure spending.
• According to Citigroup, infrastructure investment in 2022 is likely to rise by 7.7% versus 2021.
• President Xi Jinping has called for an “all out” effort to increase infrastructure spending this year to fuel economic growth and meet a GDP growth target of around 5.5%.

The Bloomberg article touches on the impacts of China’s COVID induced lockdowns on the domestic economy.

With economic growth tipped to slow, the Chinese government is getting ready to lean on fiscal stimulus through infrastructure investment to spur economic growth.

We think this type of fiscal stimulus is likely to become a common theme in China and the West, with macro themes like decarbonisation requiring massive CAPEX.

This infrastructure spending forms part of our “commodities supercycle” investment thesis, where we see increased fiscal stimulus and CAPEX investment spurring higher demand for commodities already facing supply shortages.

The following Bloomberg article highlights China’s plan to spend up to US$220 billion to spur economic growth through infrastructure spending.

All of this new infrastructure will require more commodities.

Read the full article here.

Below are our key takeaways:

• China’s Ministry of Finance is considering US$220 billion of infrastructure funding aimed at shoring up the country’s beleaguered economy.
  
  
• The funding is to be brought forward from next year’s quota, marking the first time the issuance has been brought forward due to concerns around the dire state of the world’s second largest economy.
  
  
• The funding would primarily be used on infrastructure spending to boost an economy hit by Covid lockdowns and a housing downturn.
  
  
• Commodities rallied in European trading hours following the news, with copper moving 3.6% higher on the London Metal Exchange.

For over two years, we have been writing about an upcoming commodities supercycle brought about by infrastructure spending, following decades of underinvestment in the “real economy”.

All this investment in the “real economy” requires raw materials, which is why we think the macro backdrop for commodities over the next decade is strong.

The Bloomberg article highlights the readiness of the Chinese government to lean on fiscal stimulus to spur economic growth at a time when the Chinese economy is slowing down.

Generally, governments would try to respond to slowdowns in economic growth by cutting interest rates. With this tool exhausted after the COVID pandemic, we think infrastructure spending will become the new policy of choice for governments worldwide.

Again, this infrastructure spending will increase demand for commodities which we expect will take commodity prices higher.

The following Bloomberg article showcases the moves major carmaker Volkswagen is making in the batteries industry.

Read the full article here.

Below are our key takeaways:

• VW is pressing forward with investments along its battery supply chain, commencing construction at a new cell factory in Salzgitter, Germany, one of five facilities in Europe under the carmaker’s PowerCo subsidiary.
  
• Salzgitter is home to VW’s main motor factory, and it is where the company last year opened an $80 million facility to research, develop and test EV batteries.
  
• Roughly $2 billion will be invested in the new cell factory, where production is scheduled to begin in 2025.
  
• VW expects its battery business to generate €20 billion in revenue by the end of this decade.
  
• VW CEO Herbert Diess said, “We are invested in some startups and we are looking forward to a joint venture together with Bosch for the machine tools and equipment for those plants, so we’re really gearing up to become one of the bigger battery cell producers”.

The news is just another sign that downstream investment in battery supply chains is showing no signs of slowing down.

VW is one of the world's largest carmakers and is heavily investing in downstream production capacity. It expects this part of its business to generate over €20 billion in revenues by the end of the decade.

This is a situation where investment in midstream/downstream (manufacturing/battery industry) is far ahead of upstream investment (mining), this leads to the supply/demand imbalances for the raw materials required to produce batteries only becoming worse.

The imbalance comes from the timing of these mega projects. Building a downstream / midstream facility could take 1-4 years whereas it takes around 7 years on average to bring a new resource discovery into the production stage.

As a result, we think that raw materials prices will remain high for at least the next decade whilst the mining industry catches up to demand.

The following Reuters article touches on the news overnight in the EU where lawmakers voted in favour of labelling nuclear power as “green”.

Read the full article here.

Our key takeaways:

• On Wednesday, the European parliament backed EU rules labelling investments in gas and nuclear power plants as climate-friendly.
• The vote in favour of the proposal means the EU can look to pass the proposal into law. For the proposal not to pass, 20 of the EU’s 27 member states would have to oppose the move.
• The new rules will add gas and nuclear power plants to the EU "taxonomy" rulebook from 2023, enabling investors to label and market investments in them as green.
• EU financial services chief Mairead McGuinness said "The Complementary Delegated Act is a pragmatic proposal to ensure that private investments in gas and nuclear, needed for our energy transition, meet strict criteria".
• Slovakian Prime Minister Eduard Heger said the vote result was good for energy security and emissions-cutting targets.

We are Invested in US based uranium explorer GTI Energy (ASX: GTR) because we think nuclear power has one of the lowest carbon-footprints and highest utility rate of all renewable energy technologies currently available.

We think this, combined with its ability to operate on an almost 24/7 basis, makes nuclear power the ideal source for baseload energy generation.

This is where our exposure to GTR comes into play. With uranium being the primary fuel source for nuclear power, we think it is a critical mineral for a green future.

To see all of the key reasons why we are Invested in GTR and the key objectives we want to see the company achieve in 2022 check out our 2022 GTR Investment Memo by clicking here.

Investment Memo: GTR 2022

General: Director appointment

Yesterday our uranium exploration Investment GTI Resources (ASX: GTR) announced the appointment of a new US based director - James Baughman.

Mr Baughman has 30+ years’ experience as a geologist in the exploration industry and has held senior positions (i.e., Chief Geologist, Chairman, President, Acting CFO, COO) in private & publicly traded mining companies through this period.

We especially like that Mr Baughman has experience specifically in the uranium industry from his time as President & CEO of High Plains Uranium which was sold for US$55m in 2006 to Uranium One.

With the extended drilling program likely to commence across its Wyoming acreage in July, we think GTR have managed to strengthen the in country team significantly with this appointment.

Next: We want to see GTR kick off its ~100,000 foot exploration program across its uranium project in Wyoming, USA.

Investment Memo: GTR 2022

General: Project acquisition

This morning our uranium exploration Investment GTI Resources (ASX: GTR) confirmed that it had completed the acquisition of an additional ~13,800 acres in ground next to its existing uranium projects in Wyoming, USA.

The acquisition of the “Green Mountain” project now means GTR holds ~35,000 acres across in the uranium capital of the US, Wyoming.

Interestingly the newly acquired grounds all sit against a border shared with Rio Tinto.

GTR expects to start target generation and permitting works across the newly acquired acreage this month ahead of a planned ~100,000 foot exploration program across its entire project portfolio in the basin scheduled for July.

Investment Memo: GTR 2022

General: Macro

The following article from Bloomberg highlights the impacts the Russia/Ukraine conflict is having on supply chains of commodities globally. This time the commodity in question is uranium.

Read the full article here.

Below are our key takeaways from the article:

• The Biden government is pushing lawmakers to support a $4.3 billion plan to buy enriched uranium from domestic producers to wean the US off Russian imports.
  
  
• Energy Department officials have met with key congressional staff, where they said such funding is urgently needed.
  
  
• Russia accounted for 16.5% of the uranium imported into the US in 2020 and 23% of the enriched uranium needed to power US commercial nuclear reactors.
  
  
• The Global X Uranium ETF, an exchange-traded fund focused on the industry, jumped as much as 7.4% to its highest intraday price in a month on the news.

Today’s news doesn't come as a surprise to us given the impacts the Russia/Ukraine conflict has had all across commodity markets.

With energy independence becoming a key talking point globally we think that it was always a case of when not if when it comes to trying to sure up nuclear fuel sources (uranium).

This is why we hold GTI Energy (ASX: GTR) in our portfolio as a US based domestic uranium exploration exposure.

To see all of the key reasons why we continue to hold GTR in our portfolio check out our 2022 GTR Investment Memo here.

INVESTMENT MEMO: GTR 2022

GENERAL: Project acquisition

This morning our uranium exploration Investment GTI Resources (ASX: GTR) confirmed that the due diligence process has been completed for the acquisition of an additional ~13,800 acres in ground next to its existing uranium projects in Wyoming, USA.

The acquisition of the “Green Mountain” project was first announced on the 6th of April this year and sits immediately bordered with projects owned by Rio Tinto.

GTR now expects the transaction to be completed in the first week of June pending shareholder approvals.

As part of the transaction GTR will pay the vendors the following:

• $750k in cash.
• Issue the vendors 105,000,000 shares in GTR.

In the background GTR are still in the planning stage for a 100,000 foot exploration program across the combined project area at its Wyoming uranium project which is scheduled to commence in July.

Investment Memo: GTR 2022

Objective: N/A

This morning our uranium exploration Investment GTI Resources (ASX: GTR) confirmed that applications were underway for a ~100,000 foot exploration program across its key ISR uranium prospects in Utah, USA.

This program will follow up on the drilling done earlier in the year where GTR confirmed a maiden discovery over its project area. To check out our coverage of that exploration program see our previous note here: Drilling results are in as Uranium prices keep edging upwards.

This next round of drilling will first target extensions (~40,000 feet of drilling) to that discovery and then move to the north to test 4 other prospective areas with the remaining ~60,000 feet of drilling.

Permitting is currently underway with drilling expected to commence in July.

Investment Memo: GTR 2022

Objective: N/A

Our uranium exploration Investment GTI Resources (ASX: GTR) has provided an update on the acquisition of an additional ~13,800 acres of claims adjacent to its current landholding and bordering grounds held by Rio Tinto.

GTR confirmed that due diligence was ongoing as planned and that the company would be providing an update on the acquisition in due course. We covered the new acquisition in detail in a previous Quick Take which you can read here.

Once completed, the acquisition will increase GTR’s landholding in this part of Wyoming to ~35,000 acres and mean that the next round of drilling can be followed up by testing the new acreage to the north as well.

Effectively, GTR is bringing in even more exploration potential to an already prospect rich portfolio of landholdings.

Overnight we read the following article on Bloomberg which mentioned the US Department Of Energy preparing to launch a US$6 billion program aimed at keeping uneconomical nuclear plants in service:

US nuclear power plants stand at ~93 reactors which combined provide ~1/5th of the country's electricity. More importantly though, the reactors supply more emission-free power than all other renewable energy sources combined.

The issue for these reactors is mostly centred around the reactors inability to compete with modern/cheaper sources of electricity generation mostly due to age. As a result, a lot of these were being considered for early shutdowns primarily related to the economics of keeping them open.

If the US government intervenes, these plants could stay in operation for longer and in turn ensure that there is more demand for the raw material which powers them being Uranium.

It’s long been our view that future electricity grids of countries all around the world will need to have some mix of nuclear energy, given it is one of the lowest carbon emission sources of baseload electricity generation.

As exposure to the sector, we hold uranium explorer GTI Resources (ASX: GTR) which is targeting Uranium discoveries in Wyoming, USA & Utah, USA. GTR’s projects in Wyoming specifically are strategically located with ~80% of domestic production coming out of this region.

Next: We are looking forward to GTR announcing its planned follow up drilling programs across its Wyoming projects and the completion of the recent acquisition which will almost double GTI’s project area in this part of the USA.

To see why we continue to hold GTR in our portfolio, check out our 2022 Investment Memo here.

This morning GTR announced that it had completed a placement raising $5M at 2.1c per share whilst at the same confirming that it has acquired another ~13,800 acres in grounds at its Wyoming Uranium project.

GTR now holds ~35,000 acres across the Great Divide Basin which is the capital for uranium production in the US accounting for ~80% of domestic uranium production. The new project area sits on the border of Rio Tinto’s project area and to the south of Energy Fuels’ 30mlb uranium resource.

The acquisition comes after the recent drilling results from GTR’s drilling program at the Thor project discovered a mineralised uranium system. We covered the drilling results in our last note for GTR which can be read here.

With an even bigger project area, GTR now has added even more exploration upside to follow up this drilling program with additional discoveries.

GTR has managed to pick these projects up for a total consideration of $750k in cash and 105 million shares in GTR, two thirds of which will be escrowed for ~6 months.

GTR will be funding the acquisition through the proceeds of the $5M capital raise @ 2.1c per share. The shares came with 1 free option for every 4 placement shares investors purchased, exercisable @ 3c per share with a October 2024 expiry.

With the Uranium price now trading above US$60/lb for the first time in ~11 years, GTR is starting to put together a project with some serious exploration upside strategically located in the US at just the right time.

This is one of the key reasons we continue to hold GTR in our portfolio. To see all of the reasons why we continue hold GTR and what we want to see the company achieve in 2022 check out our 2022 Investment Memo here.

GTR today announced that its maiden drilling program at its ISR uranium project in Wyoming, USA is nearly complete.

GTR expects the final 9 holes of the ~100 hole maiden drilling program to be drilled in the week starting on 15 March. The full set of final results and interpretations are expected in the first half of April.

The ultimate aim of the current drill program is to identify the depth, grade and width of mineralisation over the project area with a target of announcing a maiden ISR uranium resource, or at the very least, an exploration target which will form the basis for follow up exploration.

In a previous note, we set some expectations for what we want GTR to achieve in this drilling program and we look forward to seeing the last batch of results before we can make an assessment of what GTR has on its hands.

This drilling program forms the basis for the first objective we set for GTR in our 2022 Investment Memo. To see what else we want to see GTR achieve this year check out our 2022 Investment Memo here.