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Next Investors Limited

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Who Are The Next Investors?

With more than 20 years’ experience investing in ASX small caps, the team at Next Investors know how to spot an early stage opportunity.

Investing in junior ASX stocks is one of the best games in town if you know how to play it, but it is also the quickest way to lose all your money if you don’t.

Having learnt some hard lessons over the years, and also made good money investing in the market, we are now sharing our knowledge for free.

We are building a high performing ASX portfolio — taking long term positions in carefully selected ASX small cap companies.

And now, we have opened the doors to our readers, revealing our complete small cap investment portfolio.

We tell you when we invested, at what price, and give you all the analysis that goes on behind our decisions.

There are no subscription or management fees. Everything you read here is free.

We simply make money when our portfolio investments rise in value.

Just remember, you will need to make your investing decisions, aligned to your own risk profile and financial circumstances.

When it comes to ASX small cap stocks, it's best to be cautious - only invest what you can afford to lose.

Good luck with your investments!

The Next Investors team


Our Past Commentary on Next Investors

Date Title
02-Jul-2022 Tax loss selling over, market back in August?
27-Jun-2022 Market Mood Swings, Price Discovery & Enterprise Value
18-Jun-2022 Raising cash in a rough market and what to watch out for
11-Jun-2022 Why the market is tanking and what are we doing?
06-Jun-2022 The need for significant investment in rare earths, other critical materials
28-May-2022 Share price moves on expected vs unexpected announcements
21-May-2022 Commodities super cycles
14-May-2022 Small caps in a shocking market
07-May-2022 Natural gas and the clean energy transition
30-Apr-2022 US market swings drove a wild week on the ASX.
23-Apr-2022 What exactly is a share price catalyst?
18-Apr-2022 Oil & gas crisis leads to record inflation
11-Apr-2022 Why we invest in IPOs and our investment approach
04-Apr-2022 Investing in Early Stage, High Risk Companies in 2022
28-Mar-2022 Small cap market showing signs of waking up
19-Mar-2022 Scott Morisson's "Shopping List" of Critical Minerals
12-Mar-2022 Nickel, the War and Under Investment in Exploration
05-Mar-2022 Mainstream Media Catching on to the Commodities Supercycle
26-Feb-2022 The War Begins, Cybersecurity, Food Security, Energy Independence and Precious Metals
21-Feb-2022 Why we invest in Oil & Gas and Precious Metals
12-Feb-2022 Energy Transition Metals, Raw Materials, McKinsey, Supply and Demand Economics
05-Feb-2022 The "Lesser Kown" Energy Transition Metals: Copper, Aluminium, Graphite, Helium, Rare Earths
31-Jan-2022 Inflation, US Fed Reserve, Bond Yield, Cash Buffer Portoflio
22-Jan-2022 Our Investment Approach, Energy Cold War, Ukraine, Supply Chain Crisis
14-Jan-2022 How do Fund Managers Invest in Small Cap Stocks?
08-Jan-2022 Early-year trading indicates market is set for an up-and-down year
04-Jan-2022 Welcome to 2022
18-Dec-2021 Investing 101: Taking Stock of your Stocks and Diversification
11-Dec-2021 ASX rests pre-Chrsitmas as the market trades on very low volumes
04-Dec-2021 Omicron, Inflation and Investment Memos
27-Nov-2021 New COVID strain, Santa Rally, Market Thoughts
20-Nov-2021 Australia bets big on Hydrogen at COP26, investment in companies that solve problems
13-Nov-2021 Stocks that perform well in inflation, JORC Resource, Mining Company Lifecycle
06-Nov-2021 COP26, Battery Metals, Green Energy
30-Oct-2021 The fallout from the VUL short attack explained
25-Oct-2021 Lockdown lifts, Two stocks to watch: MNB and ONE
20-Oct-2021 Three stocks to watch for the next few weeks
16-Oct-2021 Mainstream media casts a big spotlight on Green Hydrogen
09-Oct-2021 Investing 101: Key lessons for small cap investors
02-Oct-2021 Evergrand, Gold and Traditional Energy
25-Sep-2021 Managing a market crash - lessons from March 2020
20-Sep-2021 ONE, VUL all grown up… BPM, LCL finding targets. PUR drilling again.
18-Sep-2021 Why uranium stocks are soaring, one good movie recommendation
13-Sep-2021 Quick fire commentary on the six stocks making progress today
11-Sep-2021 The thematics we are investing in right now
04-Sep-2021 Annual Reports, Uranium and a Welcome to New Subscribers
28-Aug-2021 Recap of the KNI IPO and share price run
21-Aug-2021 Market fluctuations and portfolio news and quick takes
14-Aug-2021 Bookmark it, a new Pick of the Year is coming next week
07-Aug-2021 Market swings back up as small caps scramble towards the end of the year
31-Jul-2021 Quarterly Reporting Season and other news from our portfolio stocks
24-Jul-2021 Why stocks go into "Quiet Execution Mode", how to spot a cap raise, stock "Confession Season"
17-Jul-2021 Cash is King, Gold Stocks and Enough of VUL and EMN
16-Jul-2021 VUL and EMN: Key takeaways out of Europe this week
13-Jul-2021 Two more key events coming out of Europe in the next 48 hours...
10-Jul-2021 Breaking News: Stellantis signs offtake MoU with VUL
09-Jul-2021 Stellantis EV Day: Mystery European Geothermal Lithium MoU & Manganese to be used in all batteries
08-Jul-2021 Move over Musk. Yet Another Auto giant to reveal Electric strategy tonight at 11:30pm AEST
03-Jul-2021 End of Financial Year, and what happened to 88E's share price?
26-Jun-2021 June tax loss selling is behind us, KNI IPO expected in August
19-Jun-2021 What is Tax Loss Selling?
12-Jun-2021 What did our investments do this week? CPH, ONE, TMZ, 88E and more...
05-Jun-2021 What did our investmensts do this week? BPM, VN8, IVZ, and more...
29-May-2021 Green Hydrogen in the news, Investment Milestones released, stock portfolio news
23-May-2021 The Weekend Updates Begin
28-Apr-2021 Zero Carbon Ammonia? What happened last night?
27-Apr-2021 Our Portfolio Performance from January 1st to March 31st 2021
23-Mar-2021 TRIPLE DOWN ALERT - Plus 6 Hot Stocks
16-Mar-2021 Power Day Launches Volkswagen’s EU Electric Vehicle Future
05-Mar-2021 Our Top Two Stocks to Cop a Post-Drop Price Pop
12-Feb-2021 What are the best returns in our portfolio?
07-Jan-2021 Our Stock Picks for 2021
23-Dec-2020 How we Analyse and Choose our Stock Picks
11-Dec-2020 EU Climate Policy - Battery Materials Supply Regulations Leaked?
05-Dec-2020 This Week’s News Makers are Riding High
15-Nov-2020 REVEALED: Our Full Portfolio Unveiled
09-Nov-2020 Our Top 4 ASX Stocks to Benefit from a Biden Presidency



Gas to bridge the gap between fossil fuels and renewables

Next Investors Jun 20, 2022


Investment Memo: EXR 2022, IVZ 2022, TEE 2022

General: Macro


The following AFR article further justifies gas’ position as a transitional power source:

Read the full article here.

Our key takeaways:

  • Russian energy giant Gazprom has reduced gas flows into Europe through the Nord Stream pipeline.
  • The EU is encouraging users to burn less natural gas to deal with reduced energy supplies from Russia.
  • Germany is looking to restart coal-fired power plants to conserve natural gas consumption.
  • There’s a focus on ensuring that more gas is available to divert to storage, so that Germany has enough to get through the winter months.

Germany is one of the countries most committed to decarbonising its economy but finds itself reliant on coal-fired power plants for energy supply.

We think this reiterates the need for a transitional energy source to bridge the gap between fossil fuels and renewable energy. Natural gas is an ideal transitional energy source and this is why we hold natural gas exploration exposures in our portfolio.

To check out our Investments in the gas industry see the Investment Memos for the companies below:

Elixir Energy (ASX: EXR)

  • Exploration stage, coal bed methane gas, Mongolia

Invictus Energy (ASX: IVZ)

  • Exploration stage, gas, Zimbabwe

Top End Energy (ASX: TEE)

  • Exploration stage, gas, Northern Territory


Tsunami of capital coming into the green hydrogen sector.

Next Investors Jun 20, 2022


Investment Memo: PRL 2022, EXR 2022, MNB 2022

General: Macro


The following Bloomberg article puts into context the wave of capital that is moving into the green hydrogen sector globally.

Read the full article here.

Our key takeaways:

  • Major oil companies have a vision for a low-carbon future centred around multi-billion dollar projects that generate renewable electricity and convert it into hydrogen to power trucks, ships or even aeroplanes.
  • Head of power and renewables at commodities trader Trafigura Group Pte Ltd, Julien Rolland, said "This green hydrogen, green ammonia stuff will be the new energy industry”.
  • BP recently announced it is taking the lead in the $36 billion Asian Renewable Energy Hub in the Pilbara, Australia.
  • Total Energies has teamed up with India’s Adani’s conglomerate in a venture that seeks to invest as much as $50 billion over the next 10 years in green hydrogen.
  • Shell’s Vice president for hydrogen, Paul Bogers, said that “It's only a matter of time before Shell Plc follows with a megaproject of its own”.
  • US giant Chevron is rumoured to be ready to spend big on a mixture of green and blue hydrogen projects.

Hydrogen has long been seen as experimental, with companies reluctant to spend big on building projects because the end market was just not developed enough.

Oil and gas supermajors are now investing, or at the very least committing to invest, tens of billions of dollars into green hydrogen projects globally as they look to move towards a cleaner low-carbon future.

Our best Investments have always come when we invested in frontier technologies well ahead of mass adoption, and our Investments in the green hydrogen space are no different.

We hold the following companies in our Portfolio, providing exposure to what we think is an industry on the cusp of exponential growth:

Province Resources (ASX: PRL)

  • Feasibility stage, green hydrogen, WA (Australia)

Elixir Energy (ASX: EXR)

  • Scoping stage, green hydrogen, Mongolia

Minbos Resources (ASX: MNB)

  • Scoping stage, green hydrogen/ammonia, Angola


Iron ore front and centre of Chinese governments mind

Next Investors Jun 17, 2022


Investment Memo: IRD 2022, PFE 2022

General: Macro


The following article in the AFR highlights just how important securing iron ore supplies is to the Chinese government. Iron ore isnt in the spotlight the same way battery metals are but this article is a clear signal as to its importance worldwide.

Read the full article here.

Our key takeaways:

  • China is moving to consolidate the country’s iron ore imports through a new centrally controlled group by the end of this year
  • China is the world’s biggest consumer of iron ore with its 1 billion tonne a year steel industry absorbing about 70 per cent of global production, most of it supplied by Australia

  • Beijing hopes the new entity can secure lower prices through larger bulk purchases made on companies’ behalf.

  • The Chinese plan will also look to “organise bigger investments in overseas mines”.

At face value this article may seem like a net negative for iron ore explorers/producers, we think it actually highlights just how front of mind iron ore is for the Chinese administration.

The fact that Australia supplies most of Chinese iron ore demand will mean that both sides of the demand/supply curve have equal bargaining power.

We expect demand for steel (and in turn iron ore) to increase significantly into the future and with the investments being made into countries like India for steel manufacturing capacity, we expect the price for iron ore to be largely set by the market.

We hold the following company’s as iron ore exposures in our portfolio:

Iron Road (ASX: IRD)

  • Development stage, Iron ore, SA.

Panterra Minerals (ASX:PFE)

  • Exploration stage, Iron ore, SA.


Energy transition requires 5-6x more key commodities

Next Investors Jun 17, 2022


General: Macro


We saw the following video on twitter published by Real Vision. The short clip comes from an interview between US hedge fund manager Kyle Bass and Will VanLoh who is the founder and CEO of Quantum Energy Partners - a US private equity fund focused on the energy industry.

Watch the full clip here.

Our key takeaways:

  • Will VanLoh says the energy transition will be very difficult to achieve without significant investment into new mine supply of battery materials.

  • Will also mentions that the move away from internal combustion engines (ICE) to electric vehicles (EV’s) as well as the move away from traditional power generation sources (coal/gas) to wind and solar will need 5-6x more key mineral inputs like copper and lithium.

  • Finally, Will mentions that the world needs to increase its production capacity for concrete and steel by 20-30x to be able to achieve the 2030 energy transition targets.

The conversation largely centres around a debate about whether or not mine supply can catch up with demand for these key materials.

We tend to agree with Will VanLoh that it may be difficult to see a whole heap of new supply come to market, but at the right commodity price, with the right incentive structures in place, we think it can be done.

This forms a large part of our overall commodity supercycle thematic where we see higher pricing over a sustained period of time across most commodities which will then encourage investment into new mine supply.


ESG and Our Portfolio Companies

Next Investors Jun 03, 2022


General: Macro


The ESG movement is becoming increasingly powerful, and shareholders are holding Boards to a higher standard.

This phenomenon is playing out across the Australian business landscape, and companies will have to adapt or suffer the consequences.

One consequence of not embracing ESG principles and reporting is the fact that large pools of ESG capital will find other homes for their money.

We think that companies that take ESG seriously, will over time, become more attractive investments.

Bloomberg highlighted the increasing prominence of ESG funds in Australia in the article below:

Key takeaways:

  • AGL’s well publicised battle with Atlassian co-founder Mike Cannon-Brookes is the tip of the ESG iceberg - shareholder ESG resolutions have been steadily increasing since 2017
  • Boards that don’t take ESG seriously are increasingly being shown the door by shareholders and forced to step down
  • Accountability initiatives are improving in response

What’s next? We expect the ESG movement to make up an ever larger share of the overall investment capital in Australia. Data from Calastone shows that flows into ESG funds in Australia rose by 338% to $2.96 billion in 2021 and we expect that trend to continue in 2022.

As fund managers Investing in small cap stocks, we encourage all our portfolio companies to adopt an ongoing ESG improvement program and quarterly ESG reporting.

You can view ESG disclosures made by our portfolio companies


Educational Article - What is an ASX listed shell?

Next Investors Jun 03, 2022


Next Investors educational - Learn to Invest


With the relatively poor current market sentiment, some of the company’s on our watchlist's have been sold off to the point of being valued only as “shells”.

With this in mind we thought it would be good to document our process when it comes to identifying and investing in “shells”.

Our latest educational article maps out our process, detailing how we filter and identify ASX-listed shells.

In the article we detail the following:

  1. How does a listed company become a shell and how to spot them?
  2. Why do shells exist?
  3. What do we like to see before investing in a shell?
  4. The risks to be aware of before investing in shells.
  5. Our investment strategy with shells.

The full article can be read here 🎓= What is an ASX-listed shell?

To access the remainder of our educational articles click on the “learn to invest” tab on the Next Investors homepage.


Is copper the next battery material to go exponential?

Next Investors Jun 02, 2022


Investment Memo: KNI 2022, GAL 2022, MAN 2022, TG1 2022, AKN 2022

General: Macro

Long time readers will know that we have based a fair few of our Investments around the electrification macro thematic. The following transcript from the “Odd Lots” podcast published by Bloomberg shines the light on one of the most critical industrial metals in the world, copper.

Read the full article here.

According to Goldman Sachs, thanks to booming demand for electric vehicles (EV’s) and the overall shift to electrification, coupled with minimal investments being made into new mine capacity, alongside minimal investment in new mines, copper might be the tightest commodity market the world has ever seen.

The key topics touched on in the podcast are as follows:

  • Why the copper deficit is going to get so big — 5:35
  • Why total demand is going to boom — 8:15
  • Where will the copper come from? — 11:30
  • It takes longer and longer to build a new mine — 14:22
  • Peak production is on its way — 22:13
  • The copper bear case — 30:06
  • Why copper $100K is possible — 35:19

This isn’t the first time Goldman Sachs have spoken about the tightness in the copper market, late last year publishing “Copper is the new oil” just over 12 months ago now, where again the US investment bank claimed that “A surge in green capex—combined with the lack of copper mining projects—will lead to a multi-year bull market in copper”.

We tend to agree with this viewpoint, with copper already the 2nd most used industrial metal in the world and the electrification boom likely to increase demand by multiples from where it is today we think the outlook for copper demand is likely to outstrip the supply response.

This is why we hold Investment exposure to copper explorers across our portfolio’s. Below is a list of these portfolio companies:

Kuniko (ASX: KNI) - Next Investors Portfolio

  • Zero Carbon Copper, nickel, cobalt and lithium, Exploration stage, (European Union - Norway)

Galileo Mining (ASX: GAL) - Next Investors Portfolio

  • Nickel-Copper-PGE, Exploration Stage, (Australia)

Mandrake Resources (ASX: MAN) - Catalyst Hunter Portfolio

  • Copper, Exploration Stage, (Chile)

TechGen Metals (ASX:TG1) - Catalyst Hunter portfolio

  • Copper/gold, Exploration Stage, (Australia)

Auking Mining (ASX:AKN) - Catalyst Hunter Portfolio

  • Copper, Exploration Stage, (Australia)


China stimulus to add fuel to the commodity supercycle fire?

Next Investors Jun 02, 2022


Commodities portfolio

General: Macro



We have been writing about what we think is an upcoming commodities supercycle for over 2 years now. The following Bloomberg article highlights China’s plan to tap a $120 billion credit line to spur economic growth through infrastructure spending.

All of this infrastructure spending requires more commodities.

Read the full article here.

Below are our key takeaways:

  • China has ordered state owned banks to set up US$120 billion in lines of credit for infrastructure projects as it leans on construction to stimulate the Chinese economy.
  • China’s call comes after official data showed that economic activity contracted in April and unemployment rose sharply.

The article highlights the readiness of the Chinese government to lean on fiscal stimulus to spur economic growth in times of contracting GDP growth numbers. We think that these type measures are likely to become the norm with governments all around the world responding to any slow down with more fiscal stimulus by way of infrastructure spending.

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 all around the world.

We think that this will result in an increased demand for commodities at a time where the supply side response just isn’t coming in to play. We think all of this should take commodity prices higher.


Fund managers committing $16 trillion to meet net-zero targets

Next Investors Jun 01, 2022


General: Macro


Regular readers will know that we are committed to filtering all of our Investments based on their ESG footprint. The following Bloomberg article shows how the Investment community is now committing $16 trillion of funds under management toward meeting net-zero targets.

Read the full article here.

Below are our key takeaways:

  • Fund managers have committed to net-zero emissions by 2050 , promising to manage 39% of their funds under management with an ESG focus.
  • The commitment comes from Allianz Global Investors, BlackRock Inc. and Royal London Asset Management which represents $16 trillion in funds under management.

The article highlights how important ESG consciousness is becoming for company’s worldwide with the allocators of capital now putting in place ESG filters before making new investments. Companies that want to be able to attract new investment need to become more ESG conscious.

As part of our due diligence process, we always look at the ESG credentials of company’s before making new investments. We think that for companies to thrive in the medium to long term they need to be ESG conscious and in some way report the company’s ESG footprint.


All-In podcast discusses “critical minerals”.

Next Investors Jun 01, 2022


Next Investors

General: Macro


This interview from the All-In Summit broadly discusses the critical minerals supply chains and how there has been decades of underinvestment in the physical economy in the West.

Watch the entire interview here.

Below are our key takeaways:

  • The “real economy” has been starved of investment in the West. Most of the incremental commodities capacity over the last decade has come from China who has continued to make investments in both downstream and upstream capacity in the “real economy”.
  • Four of the top 10 OEM carmakers (by battery manufacturing capacity) are based on China.
  • More investment in minerals like nickel, copper, cobalt, lithium and rare earths is required to meet future demand for battery manufacturing capacity. James claims “the world needs >US$200 billion in CAPEX per annum to satisfy future demand”. Chamath claims that the number is closer to US$3 trillion over the next decade.
  • The cost of capital upstream is limiting new investment in new projects, James claims that there is a good chance that the downstream operators like Tesla who have a much lower cost of capital may look to move upstream and acquire new mining projects directly.
  • The panel also makes reference to the recent Tesla earnings call where Elon Musk mentions that Tesla is considering “becoming a mining company” by purchasing and operating mines specifically in the critical minerals space. The panel also specifically mentions Elon’s quotes encouraging entrepreneurs into the lithium mining industry.
  • In the future where these minerals are considered “the new oil”, countries will need to build up strategic reserves just like they have done so with oil and gas. The panel also touched on the security risks that could come as a result of geopolitical tensions over a rush to try and secure supply chains of these minerals.

One thing that really stood out for us was around the idea that there could be a merging of downstream operators with upstream mining businesses.

We have seen the cost of capital issues in developing mines first hand here in Australia, where the government has had to come in and provide loans to companies like Iluka Resources (recently loaned $1.3 billion from the federal government) because capital markets were unwilling to finance large scale commodities related projects.

We believe that the “critical minerals” investment thematic is only just getting started and think that the future of mining will be for the operators to have some presence either via partnerships, direct equity stakes or joint ventures in downstream capacity.


Lithium market faces structural supply side issues

Next Investors May 31, 2022


Investment Memo: VUL 2022, EMH 2022, LRS 2022, RAS 2022

General: Macro


With the lithium price up almost 500% since January 2021, there’s talk that it could be due for a pullback. The following Bloomberg article doesn’t support that view, however, highlighting the long term structural supply issues faced in the lithium industry.

Read the full article here.

Our key takeaways:

  • Analysts at Macquarie Group warn of “a perpetual deficit”, while Citigroup has nearly doubled its price forecast for 2022, saying an “extreme” rally could be coming.
  • The shortage of lithium is so acute that in China the government corralled suppliers and manufacturers to demand “a rational return” to lower prices.
  • Investment in the electric vehicle (EV) industry has grown faster than any other clean energy sector over the past few years, outstripping even wind and solar power. If battery makers can’t get enough lithium, it could slow the adoption of clean-energy vehicles, making it harder to meet global emissions targets.
  • Supply issues and high prices have prompted acquisitions and joint ventures from battery makers moving down the supply chain and into the mining sector directly.
  • Fitch Solutions have also labelled lithium a “strategic mineral,” and warned of “rising government intervention.”

The article is a really good deep dive into the structural issues in the lithium markets. For us, it points to just how important it is for the junior exploration space to make new lithium discoveries to match the exponentially increasing demand for lithium.

Without massive investment in new exploration, we simply don't get enough lithium to be able to catch up with the demand from battery makers.

We hold investments from the exploration stage all the way up to development ready projects in the lithium space. Below is a list of our portfolio companies:

Vulcan Energy Resources (ASX:VUL) - Next Investors Portfolio

  • Zero Carbon Lithium development stage, Germany (European Union)

European Metals Holdings (ASX:EMH) - Wise Owl Portfolio

  • Lithium, development stage, Czech Republic (European Union)

Latin Resources (ASX:LRS) - Catalyst Hunter Portfolio

  • Lithium, exploration stage, Brazil

Ragusa Minerals (ASX:RAS) - Catalyst Hunter Portfolio

  • Lithium, exploration stage, Northern Territory


Lithium mine sells for 600x starting auction price

Next Investors May 24, 2022


Investment Memo: VUL 2022, EMH 2022, LRS 2022, RAS 2022

General: Macro


The following Bloomberg article highlights investor appetite for investment opportunities in the lithium sector.

Read the full article here.

Below are our key takeaways from the Bloomberg article:

  • An auction for a controlling stake in a Chinese lithium mine has garnered 3,448 bids, underscoring the scramble to secure the battery metal that’s key to the clean-energy transition.
  • The auction was for a 54.3% stake in the owner of a company that owns the Dechenonba lithium mine which has estimated reserves of 24.9mt with a planned production capacity of 1mt per annum (in a southwestern province of China).
  • The auction ended at US$299M - 600x higher than where the auction initially started.
  • The shift to electric vehicles has spurred a global rush for lithium and seen Chinese prices of lithium carbonate surge more than 400% over the past year.

The lithium bull market which is now 2 years old definitely doesn't seem to be running out of any steam.

We think that the structural demand coming over the next decade will mean that the demand for new lithium supplies will only become worse UNLESS we see massive capital investment into developing new lithium mines.

We hold investments from the exploration stage all the way up to development ready projects in the lithium space, below is a list of our portfolio companies:

Vulcan Energy Resources (ASX:VUL) - Next Investors Portfolio

  • Zero Carbon Lithium development stage, Germany (European Union)

European Metals Holdings (ASX:EMH) - Wise Owl Portfolio

  • Lithium, development stage, Czech Republic (European Union)

Latin Resources (ASX:LRS) - Catalyst Hunter Portfolio

  • Lithium, exploration stage, Brazil

Ragusa Minerals (ASX:RAS) - Catalyst Hunter Portfolio

  • Lithium, exploration stage, Northern Territory


Battery Metals now considered “critical minerals”

Next Investors May 24, 2022


Investment Memo: VUL 2022, KNI 2022, GAL 2022, EMH 2022, LRS 2022, RAS 2022

General: Macro


The following AFR article highlights the structural shortages in the battery metals sector which is increasingly becoming a problem for a world that is looking to embrace electric vehicles (EV’s).

Read the full article here.

Below are our key takeaways from the AFR article:

  • Governments all around the world have signed up to achieve net-zero emissions by 2050 which is spurring demand for electric vehicles (EV’s).

  • Sales of electric vehicles, including fully electric and plug-in hybrids, doubled in 2021 to a record of 6.6 million.
  • The Russia/Ukraine conflict has caused the prices for critical battery metals like lithium, nickel and cobalt to rise.

  • China currently produces three-quarters of all lithium-ion batteries and has 70 per cent of the production capacity for cathodes and 85 per cent for anodes, both of which are essential components of batteries.

  • Supply chain anxiety in the west has meant governments are looking to reduce reliance on china for these battery metals.

Basically battery metals have now become “critical minerals” and governments globally are preparing to throw capital at exploration/development companies that are looking for these metals to secure domestic supply chains.

Below are the Investments we hold across all three of these commodities - Nickel, lithium and cobalt:

Vulcan Energy Resources (ASX:VUL) - Next Investors Portfolio

  • Zero Carbon Lithium development stage, Germany (European Union)

Kuniko (ASX:KNI) - Next Investors Portfolio

  • Cobalt, exploration stage , Norway (European Union)

Galileo Mining (ASX:GAL) - Next Investors Portfolio

  • Nickel, exploration stage , Western Australia

European Metals Holdings (ASX:EMH) - Wise Owl Portfolio

  • Lithium, development stage, Czech Republic (European Union)

Latin Resources (ASX:LRS) - Catalyst Hunter Portfolio

  • Lithium, exploration stage, Brazil

Ragusa Minerals (ASX:RAS) - Catalyst Hunter Portfolio

  • Lithium, exploration stage, Northern Territory


UK to label gas a “green investment” to replace coal

Next Investors May 17, 2022


Investment Memo: IVZ 2022, EXR 2022, PRM/GLV 2022, TEE 2022.

Macro Theme: Natural Gas


A news piece in Bloomberg hints at the UK’s plans to label gas as a “green Investment” to replace coal in the energy sector.

Read the full article here.

Key takeaways from the Bloomberg article:

  • The UK plans to allow some natural gas projects to be labelled as “green” to drive private investment in new domestic supply.
  • The UK government believes a “green” label for gas could potentially attract the private financing needed to help the overall transition to a low-carbon economy.
  • Gas is needed as a transition fuel to replace coal in power generation.
  • The UK is focused on reviving domestic energy production after the Russia/Ukraine conflict has highlighted the importance of energy independence.

Regular readers will know that we have been speaking about that in detail across our portfolio companies that have exposure to gas. Interestingly enough we recently put out a weekend update around this macro thematic which can be read by clicking on the link below, titled: Natural gas and the clean energy transition.

Below is a list of the portfolio companies we hold with exposure to natural gas:

Invictus Energy (ASX: IVZ) - Preparing to drill an elephant scale gas prospect in Zimbabwe in July of this year.

Elixir Energy (ASX: EXR) - Preparing to conduct a long term pilot production program at its coal seam gas project in Mongolia in the 2nd half of this year.

Prominence Energy (ASX: PRM) and Global Oil and Gas (ASX: GLV) - Weeks away from drilling one of the top 20 highest impact oil and gas exploration wells for 2022 and one of the biggest drilled by ASX junior explorers in recent decades.

Top End Energy (ASX: TEE) - Holds a massive ~162,000km2 landholding in the north of Australia, with exposure to five different key basins. Currently in the early stages of identifying high priority drill targets.


Lithium industry needs US$42 billion in investment

Next Investors May 17, 2022


Investment Memo: VUL 2022, EMH 2022, LRS 2022.

Macro theme: Lithium


The following Bloomberg article highlights the structural shortages in the lithium market and the need for a further US$42 billion of investment by the end of the decade in order to meet forecast demand.

Read the full article here.

The key takeaways from the Bloomberg article:

  • The lithium industry needs as much as ~US$42 billion in investment by 2030 to meet growing demand.
  • 2022 estimated production is ~600,000 tonnes, versus forecast demand of ~2.4 million tonnes by 2030 (400% higher).
  • Europe and North America are looking to develop their own lithium supply chains to reduce reliance on China. The US is looking to invest >US$3 billion, while Canada is earmarking up to US$2.9 billion in its budgets towards building a domestic critical minerals supply chain.
  • A report by Benchmark Intelligence highlights that major automakers may look to step into the mining and refining industry because “Unlike investors, they are not just looking for a return from profits generated by lithium. They are looking to secure supply for their batteries”.

We have investments across the lithium sector ranging from development ready projects to new discoveries and hope to see our portfolio companies contribute to a supply side response in the lithium markets.

Below are the portfolio companies we hold with exposure to lithium:

Vulcan Energy Resources (ASX:VUL) - Next Investors Portfolio

  • Zero Carbon Lithium, development stage, European Union (Germany)

European Metals Holdings (ASX: EMH) - Wise Owl Portfolio

  • Development stage, European Union (Czech Republic)

Latin Resources (ASX:LRS) - Catalyst Hunter Portfolio

  • Exploration Stage WA (Brazil)


China to spend US$2.3 trillion on infrastructure

Next Investors Apr 28, 2022


This week Chinese president Xi Jinping pledged to spur economic growth inside China by going “all-out” on infrastructure spending on everything from railroads and waterways all the way down to cloud computing facilities.

This comes on top of the already planned local government investments of at least 14.8 trillion yuan (A$3.1 trillion) in major projects in 2022.

Long time readers will know that the upcoming commodity super cycle is one of the main macro investment thematics we have built our portfolio around over the last 24 months. We expect commodity prices to move significantly higher and as a result demand for new discoveries to increase.

We have already seen the start of this with commodities including copper and lithium reaching all time highs this year.

But we believe that the bigger exponential move higher in commodity markets is not done yet. With major spending commitments from the US, China and the EU, we expect the demand for commodities to remain strong over the medium term.

Coupled with the need to invest in infrastructure that will aid the electrification revolution, we think that the demand for new discoveries will only become stronger.

This is why we continue to hold a wide basket of exploration Investments all along the risk curve, from very early stage all the way up to companies with development ready projects.

To view all of our investments in the mining sector, check out our commodities portfolio by clicking the image below.


Pilbara Minerals MD on why lithium prices will remain strong

Next Investors Apr 05, 2022


We recently came across this presentation by Ken Brinsden the Managing Director of ASX listed Pilbara Minerals ($11 billion capped), one of Australia’s largest lithium exporters operating out of the Pilbara, WA.

The presentation had a lot of great insights into the future of the lithium market and the market dynamics at play right now. But one point that Ken Brinsden made really stood out to us.

When asked if the current lithium price could stay where it is, Ken replied that investment in midstream/downstream (manufacturing/battery industry) was far ahead of upstream (mining industry).

We have seen this with the major OEM’s including Tesla, VW, Daimler all making large capital investments in developing large scale battery manufacturing facilities, and in the case of the legacy automakers, making large commitments to electrifying their car fleets.

Ken highlighted that it takes 1-2 years to build out these facilities whereas it takes ~7 years to bring a new resources discovery into the production stage.

Ken also mentioned that he expects prices to remain high in the near future because the market will need to keep miners incentivised to bring new supply onto the market.

With lithium carbonate prices trading at ~US$78,000/t, up from ~US$13,000/t this time last year, Ken’s comments clearly highlight the structural supply/demand issues behind this move.

We hold a number of lithium exposures in our portfolio, and have been invested in these from way back when the lithium prices were below US$10,000/t.

Click on the company names below to read our 2022 Investment Memos to see why we continue to hold them in our portfolio and what we want to see achieved in 2022.

Vulcan Energy Resources (ASX:VUL) - Next Investors portfolio

  • Zero Carbon Lithium, development stage, EU (Germany)

European Metals Holdings (ASX: EMH) - Wise Owl portfolio

  • Development stage, European Union (Czech Republic)

Latin Resources (ASX:LRS) - Catalyst Hunter Portfolio

  • Exploration Stage WA (Brazil)

Aldoro Resources (ASX:ARN) - Catalyst Hunter portfolio

  • Exploration stage (WA)


Budget measures to boost critical minerals

Next Investors Mar 31, 2022


When the budget was handed down two days ago, one particular line item caught our attention.

The 2022-23 Federal Budget has allocated $250M for critical minerals with $200M over five years for the Critical Minerals Accelerator Initiative (CMAI) and $50.5 million over three years for a virtual National Critical Minerals Research and Development Centre (NCMRDC).

This is on top of a previous $294M already allocated to critical minerals, part of a larger $2B initiative launched last year.

Some of these funds have already arrived in the coffers of Hastings Technology Metals in the form of a $140 loan facility, a neighbour of our rare earths investment, Frontier Resources (ASX:FNT).

The upshot of all of this for us as investors is that Australia is making a concerted effort to secure future supply of critical minerals - minerals needed for the energy transition (renewables like wind power), EVs and defence applications.

In past weekend additions and recent notes we’ve emphasised how this is an emerging theme in both the US and Australia.

We also highlighted in our latest FNT note that: “A U.S. F-35 fighter jet needs 427 kg of rare earths while a Virginia-class nuclear submarine uses nearly 4.2 tonnes of rare earths.

These are the very same fighter jets and submarines that Australia is procuring or may procure from the United States.

That’s just rare earths, and here’s a list of the other critical minerals as per Geoscience Australia:

For a more in depth read, there’s also valuable information in the Australian Critical Minerals Prospectus.

We have a broad range of exposure to critical minerals which is why we want to point out a new feature on our website - portfolio filters.

On the homepage there’s this button on the right:

Clicking that button will make a drop down menu appear where you can select for certain types of companies.

In this case, if you are searching for critical minerals stocks you could search for the Energy Transition Portfolio, Nickel, Rare Earths, or Lithium, for example.

Check it out.


Brisbane Mining & Energy Conf hosting EXR, FYI, AKN, TMZ & NHE

Next Investors Mar 21, 2022


Several of our Portfolio Companies will be presenting at this week’s Brisbane Mining and Energy Conference on Wednesday and Thursday (23-24 March).

These conferences are great for investors to hear companies present their investment case and to talk directly to management.

We will be in attendance and look forward to updating our readers on key developments from these presentations and chatting to management.

For those interested, you can attend in person or online by registering here.


Fed to take “aggressive” stance on inflation, gold to move up?

Next Investors Mar 17, 2022


The gold price is sitting at US$1933/oz after The Federal Reserve raised interest rates by .25% - the first rate hike in three years and Jerome Powell flagged that The Fed would keep raising rates until they hit between 1.75% and 2%.

Below is a chart of the gold price with some key levels:

As the crisis in Ukraine kicked off, gold punched as high as ~US$2075/oz but retraced and bounced off the US$1900/oz mark.

The interesting thing to note here is that historically, gold thrives in a rate tightening environment.

We’ve noticed some lag in our gold stocks - as in they’re not moving with the gold price. But we think that the lag period may be close to ending.

These are the gold stocks in our portfolio:

Los Ceros (ASX:LCL) - This is why we invested

  • Gold, Exploration Stage (Colombia)

Tempus Resources (ASX:TMR) - This is why we invested

  • Gold, Exploration Stage (Canada, Ecuador)

Titan Minerals (ASX:TTM) - This is why we invested

  • Gold, Exploration Stage (Ecuador)

Ragusa Minerals (ASX:RAS) - This is why we invested (Catalyst Hunter Portfolio)

  • Gold, Halloysite Exploration Stage WA (Australia and Alaska)


Nickel hits US$100,000 per tonne, LME suspends markets

Next Investors Mar 10, 2022


Read the full article here: LME forced to halt nickel trading, cancel deals, after prices top $100,000

Earlier this week we saw what we think is a genuine once in a lifetime move in the nickel price, with the commodity reaching ~US$100,000 per tonne – well above its previous all time highs of ~US$50,000 per tonne.

We have been pretty vocal about the impending shortage of raw materials that will power the electric vehicle revolution. We also knew of the current nickel supply/demand imbalance (nickel is an essential EV battery ingredient). But we don’t think anyone could have forecasted a move this big in such a short period of time.

The move by the LME (London Metals Exchange) to halt trading looks to have come off the back of a large short position taken out by a Chinese company, that is facing losses >US$12 billion.

We think there is more to play out with the nickel price and don’t think that the US$12 billion margin call will be resolved in a day or two with the halt on the LME likely to take a while to sort out.

Though it was great to see the nickel price reaching these levels, we are invested in our nickel stocks because of longer term structural changes to the supply/demand equation for the critical battery metal.

Below is a list of all of our investments with exposure to nickel.

Kuniko (ASX:KNI) - why we invested

  • Zero Carbon copper, nickel, cobalt and lithium, European Union (Norway)

Galileo Mining (ASX: GAL) - why we invested

  • Nickel-Copper-PGE, WA (Australia)

Pursuit Minerals (ASX:PUR) - Memo coming soon

  • PGE, Nickel and Copper (Australia)

Mandrake Resources (ASX: MAN) - Memo coming soon (Catalyst Hunter portfolio)

  • Nickel, Copper, PGE, WA (Australia)

Aldoro Resources (ASX:ARN) - why we invested (Catalyst Hunter portfolio)

  • Nickel, PGE, Rubidium and Lithium, WA (Australia)

Auroch Minerals (ASX: AOU) - Memo coming soon (Wise Owl portfolio)

  • Nickel, Exploration Stage, WA (Australia)


Gold trading near all time highs

Next Investors Mar 09, 2022


Read the full article here: Gold makes run for record high as Ukraine concerns, inflation risks mount

With geopolitical tensions continuously escalating, overnight we saw the gold price trade a few dollars off its all time high at US$2,068 per ounce.

Gold keeps doing what it does and in times of uncertainty/fear the price keeps going up, historically around times of market uncertainty the price of gold tends to appreciate and the gold miners/explorers generally tend to outperform.

We saw this dynamic in mid-2020 after the COVID led lockdown of the global economy - the gold price reached its all time high at the time of ~US$2,072 per ounce.

We are invested in gold companies so that they can act as a hedge in times like this, below is a list of our gold exposures:

Los Ceros (ASX:LCL) - This is why we invested

  • Gold, Exploration Stage (Colombia)

Tempus Resources (ASX:TMR) - This is why we invested

  • Gold, Exploration Stage (Canada, Ecuador)

Titan Minerals (ASX:TTM) - This is why we invested

  • Gold, Exploration Stage (Ecuador)

Ragusa Minerals (ASX:RAS) - This is why we invested (Catalyst Hunter Portfolio)

  • Gold, Halloysite Exploration Stage WA (Australia and Alaska)


Nickel price up ~76% overnight touching 15-year highs.

Next Investors Mar 08, 2022


Oil, wheat, nickel storm higher on fears of supply chaos

We have been investing in exploration stocks for over 20+ years but have never seen anything like the move in the nickel price overnight.

At one point the spot price for nickel in London was up ~76% to 15-year highs of US$51,000/tonne. This type of move intraday is almost unheard of in commodity markets let alone in a metal like nickel.

We think that a part of the move overnight comes from the escalation with the Russia/Ukraine situation as Russia makes up ~10% of global nickel supply but also has something to do with the structural tailwinds for nickel demand with it being a critical metal for the production of EV batteries.

At the moment ~7% of nickel demand comes from the battery manufacturing sector, long time readers will know that we have been investing in nickel exploration stocks anticipating the exponential uplift in demand as the sector scales up.

Below is a list of all of our investments with exposure to nickel.

Kuniko (ASX:KNI) - This is why we invested

  • Zero Carbon Copper, nickel, cobalt and lithium, European Union (Norway)

Galileo Mining (ASX: GAL) - This is why we invested

  • Nickel-Copper-PGE, WA (Australia)

Pursuit Minerals (ASX:PUR) - Memo coming soon

  • PGE, Nickel and Copper (Australia)

Mandrake Resources (ASX: MAN) - Memo coming soon (Catalyst Hunter portfolio)

  • Nickel, Copper, PGE, WA (Australia)

Aldoro Resources (ASX:ARN) - This is why we invested (Catalyst Hunter portfolio)

  • Nickel, PGE, Rubidium and Lithium, WA (Australia)

Auroch Minerals (ASX: AOU) - Memo coming soon (Wise Owl portfolio)

  • Nickel, Exploration Stage, WA (Australia)