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.
$0.325
Opened: 20-Jan-2026
Shares Held at Open: 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?
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 Big Bet for NC1
“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.
Why did we invest in NC1?
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.
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.
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.
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.
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.
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).
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.
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).
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%)
What do we expect NC1 to deliver?
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 could go wrong?
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 plan?
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.
Disclosure: Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 1,785,838 NC1 shares at the time of publishing this Investment Memo. 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.
