EVs overtake phones as top source of cobalt demand

ASX:KNI   May 20, 2022

Investment Memo: KNI 2022

Macro theme: Cobalt


Cobalt demand is on a crash course with supply chain difficulties and Europe is going to need plenty of cobalt to satisfy its rapidly growing EV market.

In fact, EVs are now the number one source of demand for cobalt. We expect the demand for cobalt from EVs to ramp up dramatically in the coming years - and even bull cases for cobalt may underestimate the demand upside.

Our battery metals investment, Kuniko (ASX:KNI) is drilling for cobalt in Norway, right now.

Key takeaways:

  • Demand to nearly double in next 5 years, from 175K tonnes in 2021 to 320K tonnes by 2026 (Cobalt Institute)
  • Tesla’s Elon Musk has floated the idea of acquiring a mining company to gain access to the market
  • KNI is drilling in an area that used to be the largest source of cobalt in the world

For a full breakdown of why we’ve invested in KNI check out our Investment Memo by clicking the image below:

Helium concentrations 37x above background levels

ASX:GGE   May 20, 2022 Announcement

Investment Memo: GGE 2022

Objective #1: Drilling first helium well


This morning, our 2021 Catalyst Hunter Pick of the Year Grand Gulf Energy Ltd (ASX:GGE) announced that it had detected helium concentrations ~37x higher than the background levels right above the primary helium target GGE is drilling towards.

This effectively means, GGE is detecting helium in parts of the well where no helium is expected to be found. The significance of this is that the presence of helium in and around the main target area (Leadville formation target) could be an indicator that there is a working helium system at depth.

Today’s announcement also gave us an update on the progress of the drilling program, with GGE confirming that:

  • Drilling is currently completed to a depth of ~8,070 feet, with cement casing down to that depth currently ongoing.
  • The primary Leadville Formation helium target is at an anticipated depth of ~8,300 feet and the next phase of drilling will be drilling into this zone.

Effectively, GGE is now likely a few days away from drilling into its main target zone at its pure play helium well in Utah, USA.

In our last note on GGE, we set some expectations for the drilling results which can be seen below:

  • Our base case target is for GGE to prove there is a helium system present at the project. If GGE intercepts a helium structure, it can be followed up with additional drilling programs.
  • An exceptional result for us would be if GGE returns >0.4% helium concentration in the raw gas stream at a flow rate of 10mmcfpd of raw gas. In our opinion, this would constitute a commercial discovery and could immediately be tied into the offtake partners processing facility, moving GGE from explorer to producer.

To read more about how we came up with this, check out our last note for GGE here: GGE’s Maiden Helium Drilling Event has Begun - Here’s what we are looking for next

Drilling at newly acquired lithium prospects commenced

ASX:LRS   May 20, 2022 Announcement

Investment Memo: LRS 2022

Objective #1: JORC resource at its Brazilian lithium projects


As part of yesterday’s announcement, our exploration Investment Latin Resources (ASX: LRS) also confirmed that drilling at the newly acquired lithium prospect to the east of its new discovery had commenced.

LRS confirmed that the first three drillholes would be targeting the highest priority outcropping pegmatites structures that had previously been mapped over this project area.

Similarly to where LRS made its latest discovery, these outcropping pegmatites had previously been assayed and returned lithium results grading as high as ~2.3% lithium. We are hoping LRS can repeat the success it had on its other tenements here and add another discovery to its Brazilian lithium portfolio.

We covered the acquisition of these new prospects in a previous note which you can read here.

More spodumene bearing pegmatites intercepted

ASX:LRS   May 20, 2022 Announcement

Investment Memo: LRS 2022

Objective #1: JORC resource at its Brazilian lithium projects


Yesterday, our exploration Investment Latin Resources (ASX: LRS) announced that the first drillhole as part of the expanded 25,000m resource definition drilling program had delivered a total of ~27.78m in pegmatite interceptions.

This drillhole comes after LRS had completed ~12 different drill holes and confirmed that it had made a new lithium discovery which so far sits over a ~800m x ~200m strike zone.

Yesterday’s drillhole was drilled in between two previous discovery holes and has now confirmed that in fact the area in between is filled with more spodumene bearing pegmatites.

Yesterday’s announcement did not include any assay results, but considering the two holes to the north/south of this one contained economic lithium mineralisation we suspect that this drillhole is just a continuation of these structures.

LRS in yesterday’s announcement also confirmed that it expects to bring in another drill rig in early June to speed up the 25,000m drilling program (increasing the total number of rigs on site to three) and then bring in a larger fourth rig in July to complete the drilling that is planned to target mineralisation at depths >300m.

We expect to see LRS continue to punch out holes in and around this part of its discovery as it builds up a database of intercepts which can then feed into a maiden JORC resource over its new discovery.

Directors purchasing shares on market

ASX:TG1   May 20, 2022

Investment Memo: TG1 2022

General: Director Buying


Earlier this week we covered our junior exploration Investment Techgen Metals (ASX: TG1) acquisition of a drill ready gold project in NSW.

The market's response so far to the acquisition has been relatively muted with the share price moving from 13c per share to now trade at ~14c per share. We suspect this has more to do with general market sentiments especially considering the S&P 500 is having days where the index is down 2-4%.

The positive news is that since the acquisition both directors Andrew Jones and Ashley Hood have gone onto market and purchased a combined $15k in shares at ~15c per share (a premium to the current market price).

The purchases aren't massive but it's always nice to see the company’s directors go on market and start buying shares.

With drilling programs being prepared across the company’s copper/gold prospects in WA and at the newly acquired gold project in NSW, TG1 is moving into a relatively busy drilling season where the company will be taking a number of shots at new discoveries.

To see all of the key objectives we want to see TG1 achieve in 2022, the reasons why we continue to hold TG1 in our portfolio and the key risks to our Investment thesis, check out our 2022 TG1 Investment Memo here.

War in Ukraine - is it creating a global food crisis?

ASX:MNB   May 19, 2022

Investment Memo: MNB 2022

Macro Theme: Food Security


The Economist put out this video which looks at the impacts the Russia/Ukraine conflict is having on food supply chains globally.

Key takeaways from the Economist video:

  • Odessa is the most important port in Ukraine with ~90% of Ukrainian exports going through Odessa and Mauripol. Farmers are worried about how they can get the crop out of the country and into export markets.
  • ~80% of Egypt’s and ~70% of Congo’s grain comes from Russia/Ukraine. Globally ~800m people almost exclusively depend on Russia/Ukraine exports.
  • Russia is a major energy and fertiliser exporter, but supply chain issues are resulting in cost escalations which will mean farmers are unable to produce as much as they would in the past and in turn crop yields will fall.

It’s clear that securing food supply chains is not something that is likely to be fixed in the next few weeks. The world needs to look to alternate countries to fill in the gaps that are emerging in food supply chains.

This is where our food security Investment Minbos Resources (ASX: MNB) fits in.

With its shovel ready phosphate (a key ingredient in producing the fertilisers) project in Angola our Investment is working towards a final Investment decision on its project, with the aim of having the project operational in 2023.

To see all of the key reasons we are Invested in MNB, what we want to see the company achieve in 2022, and the key risks to our Investment thesis, check out our 2022 MNB Investment Memo here.

Managing Director purchases more shares on market

ASX:TTM   May 18, 2022 Announcement

Investment Memo: TTM 2022

General: Director Buying


Just last week we saw the three of TTM’s directors step up and purchase ~$275k in shares on market.

This morning we saw a filing made by Managing Director Matt Carr who purchased another $52.5k in shares on market at ~7c per share.

Combined with last week's purchases, Matt has now brought ~$155k in shares on market around these levels.

We always like seeing the directors of our portfolio companies step up and buy shares on market, as it signals to us that the people closest to the company clearly see some value in topping up their shareholdings.

To see all of the key objectives we want to see TTM achieve in 2022, the reasons why we continue to hold TTM in our portfolio and the key risks to our Investment thesis, check out our 2022 TTM Investment Memo here.

African gas to replace Russian gas supplies to Europe?

ASX:IVZ   May 18, 2022

Investment Memo: IVZ 2022

Macro Theme: Natural Gas


The following news piece by the BBC asks the question “Can Africa replace Russian gas supplies to Europe?”.

Read the full article here.

Key takeaways from the BBC article is as follows:

  • Russia has the largest natural gas reserves in the world and is the largest exporter, accounting for around 40% of Europe's imports.
  • The EU wants to cut supplies by two-thirds by the end of the year and become independent of all its fossil fuels by 2030.
  • Africa’s biggest exporters (Algeria, Egypt and Nigeria) amount to less than half of what Russia supplies to Europe.
  • The good news is that there is great potential in Africa and the continent is well positioned with vast natural gas resources that could be developed to replace Russian supplies.
  • The EU has already started looking south with the Italian Prime Minister Mario Draghi only last month signing a gas supply deal with Algeria to increase gas imports by ~40%.
  • Energy economist Carole Nakhle says that in the medium and long term we “will see greater investment to increase the capacity to bring more gas out of the ground and bring them to Europe".

We have been invested in Invictus Energy (ASX: IVZ) which we made our 2020 Energy Pick Of The Year because of its elephant scale prospect, which has the potential to open up an entirely new oil and gas basin in Zimbabwe, should the drilling program in July make a successful discovery.

IVZ is currently fielding farm-in offers from several interested parties as it prepares for the two well drilling program in July, where the first well will be targeting a 8.2 trillion cubic feet (Tcf) + 247 million barrels of conventional gas condensate (gross un risked basis) prospective resource at Mukuyu-1.

100,000 foot Uranium drilling program detailed

ASX:GTR   May 17, 2022 Announcement

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.

Acquisition of additional project area progressing

ASX:GTR   May 17, 2022 Announcement

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.

Demo plant modules en route to Europe

ASX:EMN   May 17, 2022 Announcement

Investment Memo: EMN 2022

Objective: Construction of the Demonstration Plant


Our European battery metals Investment Euro Manganese (ASX: EMN) today confirmed that the second and final shipment of its demo plant modules had been completed out of China.

EMN confirmed that the delivery of the modules is expected in June/July of this year with assembly on site at its manganese project to commence as soon as the items arrive.

EMN also confirmed that commissioning is still on schedule for ~September and that the first delivery of samples to customers is expected in Q4 2022.

When we launched our 2022 EMN Investment Memo, we had initially expected that the demo plant would be up and running during Q2 of this year. We suspect that the lockdowns in China and all of the impacts the Russia/Ukraine conflict has had on logistics have contributed to the delays.

First samples from demo plant expected in Q4 2022

ASX:EMN   May 17, 2022 Announcement

Investment Memo: EMN 2022

Objective: First offtake partner


Our European battery metals Investment Euro Manganese (ASX: EMN) has detailed an updated timeline for the commissioning of its demonstration plant for its high purity manganese project in the European Union (Czech Republic).

With all of the plant modules now en route to Europe, EMN confirmed that it expected the modules to arrive in June/July with commissioning of the plant expected in ~September.

Importantly, EMN also confirmed that it expects to be able to deliver the first samples from the demo plant in Q4 2022.

As part of our 2022 EMN Investment Memo, we set the securing of an offtake partner as key Objective #3 for what we wanted to see EMN achieve in 2022.

We think that the demo plant is likely to be a precursor for any major offtake deal, given that customers interested in securing long term manganese supply will want to see the product specifications EMN can produce.

With the shipment of first samples now due in Q4 2022, we are hoping to see some newsflow regarding offtake discussions towards the back end of this year.

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)

Directors buying shares on market

ASX:TTM   May 16, 2022

Investment Memo: TTM 2022

General: Director Buying


The last few weeks have been rough across the entire micro cap market and this has been reflected in the TTM share price which has gone from ~10c per share to now trade around the ~7.2c per share mark.

The company’s directors have taken this as an opportunity to add to their shareholdings with 3 directors purchasing ~$275k in total.

  • Managing Director Matt Carr purchased $102.5k in shares on market
  • Newly appointed director Tamara Brown purchased $20k in shares on market
  • Non-Exec chairman Peter Cook purchased $152k in shares on market.

We think directors purchasing shares in times where a company’s share price has moved off the back of no news is generally a good sign, as the people closest to the company see value in topping up their shareholdings.

To see all of the key objectives we want to see TTM achieve in 2022, the reasons why we continue to hold TTM in our portfolio and the key risks to our Investment thesis, check out our 2022 TTM Investment Memo here.

Mark Creasy purchases $1.74M in shares on market

ASX:GAL   May 16, 2022 Announcement

Investment Memo: GAL 2022

General: Director Buying


Mark Creasy has purchased another $1.74M in shares on market at 58c per share, increasing his shareholding in GAL to 26.35% of the company.

The ASX “change in substantial holding” notice came a day after the announcement last week of a new major palladium/platinum discovery at its Norseman project.

After the share price briefly touched ~70c on the day of the announcement, it's a positive sign that someone with the experience of Mark Creasy steps up and buys up a large chunk of shares when the share price has a minor pullback.

One of the key reasons we continue to hold GAL in our portfolio is because of the high quality management team and the experienced major shareholders backing the company.

We think the aggressive buying by Mark Creasy after the material news put out last week is positive affirmation as to the potential of the new discovery GAL announced.

Check out our 2022 GAL Investment Memo to see all of the key reasons why we hold GAL, what we want the company to achieve this year and the key risks to our Investment thesis.

India bans wheat exports, food security now a global issue

ASX:MNB   May 16, 2022

Investment Memo: MNB 2022

Macro Theme: Global Food Security


Over the weekend Bloomberg reported that India had banned wheat exports. Here are our key takeaways from the article and how it relates to our food security Investment Minbos Resources (ASX: MNB):

Read full article here

Key takeaways:

  • The Russia/Ukraine war has meant that logistics in the Black Sea region (Which accounts for ~ ¼ of all wheat trade) has been disrupted, India was expected to step in and fill in this gap.
  • The Indian government has stated that national food security is priority number one.
  • The German government also commented on the export ban with the agricultural minister saying “If we all started imposing these export limits, or even closed down markets, that just makes the crisis worse”.

All of this means that the world needs to invest in food security projects ranging from fertiliser to direct agriculture all around the world in different locations. This is where MNB fits in.

Tanzanian Gov discussions, improved DFS coming by September

ASX:EV1   May 16, 2022 Announcement

Investment Memo: EV1 2022

Objective: Final Construction Decision & Project Funding

Milestones: FEED - Appoint Engineer: 🔲 → 🔄


EV1 is advancing a Framework Agreement with the Government of Tanzania around their free-carried interest in EV1’s Chilalo project.

This should further aid project financing discussions as there will be more certainty around economic metrics.

EV1 says its DFS optimisation should be complete by September, with an engineer to be engaged this month for Front End Engineering Design. We expect the economics to improve with rising graphite prices and ESG elements to also be included.

We’ve updated the Key Objectives from our EV1 Investment Memo accordingly:

Auramet appointed to advance project financing

ASX:EV1   May 16, 2022 Announcement

Investment Memo: EV1 2022

Objective: Final Construction Decision & Project Funding

Milestone: N/A


EV1 has appointed leading resources financier, Auramet, to help advance project financing.

Mark Tyler of Auramet said he thinks it's “one of the most attractive graphite opportunities globally.” And we agree.

Having Auramet onboard is a significant win for EV1 and should help them make progress towards Key Objective #1 from our EV1 Investment Memo:

EVs overtake phones as top source of cobalt demand

ASX:KNI   May 20, 2022

Investment Memo: KNI 2022

Macro theme: Cobalt


Cobalt demand is on a crash course with supply chain difficulties and Europe is going to need plenty of cobalt to satisfy its rapidly growing EV market.

In fact, EVs are now the number one source of demand for cobalt. We expect the demand for cobalt from EVs to ramp up dramatically in the coming years - and even bull cases for cobalt may underestimate the demand upside.

Our battery metals investment, Kuniko (ASX:KNI) is drilling for cobalt in Norway, right now.

Key takeaways:

  • Demand to nearly double in next 5 years, from 175K tonnes in 2021 to 320K tonnes by 2026 (Cobalt Institute)
  • Tesla’s Elon Musk has floated the idea of acquiring a mining company to gain access to the market
  • KNI is drilling in an area that used to be the largest source of cobalt in the world

For a full breakdown of why we’ve invested in KNI check out our Investment Memo by clicking the image below:

Helium concentrations 37x above background levels

ASX:GGE   May 20, 2022 Announcement

Investment Memo: GGE 2022

Objective #1: Drilling first helium well


This morning, our 2021 Catalyst Hunter Pick of the Year Grand Gulf Energy Ltd (ASX:GGE) announced that it had detected helium concentrations ~37x higher than the background levels right above the primary helium target GGE is drilling towards.

This effectively means, GGE is detecting helium in parts of the well where no helium is expected to be found. The significance of this is that the presence of helium in and around the main target area (Leadville formation target) could be an indicator that there is a working helium system at depth.

Today’s announcement also gave us an update on the progress of the drilling program, with GGE confirming that:

  • Drilling is currently completed to a depth of ~8,070 feet, with cement casing down to that depth currently ongoing.
  • The primary Leadville Formation helium target is at an anticipated depth of ~8,300 feet and the next phase of drilling will be drilling into this zone.

Effectively, GGE is now likely a few days away from drilling into its main target zone at its pure play helium well in Utah, USA.

In our last note on GGE, we set some expectations for the drilling results which can be seen below:

  • Our base case target is for GGE to prove there is a helium system present at the project. If GGE intercepts a helium structure, it can be followed up with additional drilling programs.
  • An exceptional result for us would be if GGE returns >0.4% helium concentration in the raw gas stream at a flow rate of 10mmcfpd of raw gas. In our opinion, this would constitute a commercial discovery and could immediately be tied into the offtake partners processing facility, moving GGE from explorer to producer.

To read more about how we came up with this, check out our last note for GGE here: GGE’s Maiden Helium Drilling Event has Begun - Here’s what we are looking for next

Drilling at newly acquired lithium prospects commenced

ASX:LRS   May 20, 2022 Announcement

Investment Memo: LRS 2022

Objective #1: JORC resource at its Brazilian lithium projects


As part of yesterday’s announcement, our exploration Investment Latin Resources (ASX: LRS) also confirmed that drilling at the newly acquired lithium prospect to the east of its new discovery had commenced.

LRS confirmed that the first three drillholes would be targeting the highest priority outcropping pegmatites structures that had previously been mapped over this project area.

Similarly to where LRS made its latest discovery, these outcropping pegmatites had previously been assayed and returned lithium results grading as high as ~2.3% lithium. We are hoping LRS can repeat the success it had on its other tenements here and add another discovery to its Brazilian lithium portfolio.

We covered the acquisition of these new prospects in a previous note which you can read here.

More spodumene bearing pegmatites intercepted

ASX:LRS   May 20, 2022 Announcement

Investment Memo: LRS 2022

Objective #1: JORC resource at its Brazilian lithium projects


Yesterday, our exploration Investment Latin Resources (ASX: LRS) announced that the first drillhole as part of the expanded 25,000m resource definition drilling program had delivered a total of ~27.78m in pegmatite interceptions.

This drillhole comes after LRS had completed ~12 different drill holes and confirmed that it had made a new lithium discovery which so far sits over a ~800m x ~200m strike zone.

Yesterday’s drillhole was drilled in between two previous discovery holes and has now confirmed that in fact the area in between is filled with more spodumene bearing pegmatites.

Yesterday’s announcement did not include any assay results, but considering the two holes to the north/south of this one contained economic lithium mineralisation we suspect that this drillhole is just a continuation of these structures.

LRS in yesterday’s announcement also confirmed that it expects to bring in another drill rig in early June to speed up the 25,000m drilling program (increasing the total number of rigs on site to three) and then bring in a larger fourth rig in July to complete the drilling that is planned to target mineralisation at depths >300m.

We expect to see LRS continue to punch out holes in and around this part of its discovery as it builds up a database of intercepts which can then feed into a maiden JORC resource over its new discovery.

Directors purchasing shares on market

ASX:TG1   May 20, 2022

Investment Memo: TG1 2022

General: Director Buying


Earlier this week we covered our junior exploration Investment Techgen Metals (ASX: TG1) acquisition of a drill ready gold project in NSW.

The market's response so far to the acquisition has been relatively muted with the share price moving from 13c per share to now trade at ~14c per share. We suspect this has more to do with general market sentiments especially considering the S&P 500 is having days where the index is down 2-4%.

The positive news is that since the acquisition both directors Andrew Jones and Ashley Hood have gone onto market and purchased a combined $15k in shares at ~15c per share (a premium to the current market price).

The purchases aren't massive but it's always nice to see the company’s directors go on market and start buying shares.

With drilling programs being prepared across the company’s copper/gold prospects in WA and at the newly acquired gold project in NSW, TG1 is moving into a relatively busy drilling season where the company will be taking a number of shots at new discoveries.

To see all of the key objectives we want to see TG1 achieve in 2022, the reasons why we continue to hold TG1 in our portfolio and the key risks to our Investment thesis, check out our 2022 TG1 Investment Memo here.

War in Ukraine - is it creating a global food crisis?

ASX:MNB   May 19, 2022

Investment Memo: MNB 2022

Macro Theme: Food Security


The Economist put out this video which looks at the impacts the Russia/Ukraine conflict is having on food supply chains globally.

Key takeaways from the Economist video:

  • Odessa is the most important port in Ukraine with ~90% of Ukrainian exports going through Odessa and Mauripol. Farmers are worried about how they can get the crop out of the country and into export markets.
  • ~80% of Egypt’s and ~70% of Congo’s grain comes from Russia/Ukraine. Globally ~800m people almost exclusively depend on Russia/Ukraine exports.
  • Russia is a major energy and fertiliser exporter, but supply chain issues are resulting in cost escalations which will mean farmers are unable to produce as much as they would in the past and in turn crop yields will fall.

It’s clear that securing food supply chains is not something that is likely to be fixed in the next few weeks. The world needs to look to alternate countries to fill in the gaps that are emerging in food supply chains.

This is where our food security Investment Minbos Resources (ASX: MNB) fits in.

With its shovel ready phosphate (a key ingredient in producing the fertilisers) project in Angola our Investment is working towards a final Investment decision on its project, with the aim of having the project operational in 2023.

To see all of the key reasons we are Invested in MNB, what we want to see the company achieve in 2022, and the key risks to our Investment thesis, check out our 2022 MNB Investment Memo here.

Managing Director purchases more shares on market

ASX:TTM   May 18, 2022 Announcement

Investment Memo: TTM 2022

General: Director Buying


Just last week we saw the three of TTM’s directors step up and purchase ~$275k in shares on market.

This morning we saw a filing made by Managing Director Matt Carr who purchased another $52.5k in shares on market at ~7c per share.

Combined with last week's purchases, Matt has now brought ~$155k in shares on market around these levels.

We always like seeing the directors of our portfolio companies step up and buy shares on market, as it signals to us that the people closest to the company clearly see some value in topping up their shareholdings.

To see all of the key objectives we want to see TTM achieve in 2022, the reasons why we continue to hold TTM in our portfolio and the key risks to our Investment thesis, check out our 2022 TTM Investment Memo here.

African gas to replace Russian gas supplies to Europe?

ASX:IVZ   May 18, 2022

Investment Memo: IVZ 2022

Macro Theme: Natural Gas


The following news piece by the BBC asks the question “Can Africa replace Russian gas supplies to Europe?”.

Read the full article here.

Key takeaways from the BBC article is as follows:

  • Russia has the largest natural gas reserves in the world and is the largest exporter, accounting for around 40% of Europe's imports.
  • The EU wants to cut supplies by two-thirds by the end of the year and become independent of all its fossil fuels by 2030.
  • Africa’s biggest exporters (Algeria, Egypt and Nigeria) amount to less than half of what Russia supplies to Europe.
  • The good news is that there is great potential in Africa and the continent is well positioned with vast natural gas resources that could be developed to replace Russian supplies.
  • The EU has already started looking south with the Italian Prime Minister Mario Draghi only last month signing a gas supply deal with Algeria to increase gas imports by ~40%.
  • Energy economist Carole Nakhle says that in the medium and long term we “will see greater investment to increase the capacity to bring more gas out of the ground and bring them to Europe".

We have been invested in Invictus Energy (ASX: IVZ) which we made our 2020 Energy Pick Of The Year because of its elephant scale prospect, which has the potential to open up an entirely new oil and gas basin in Zimbabwe, should the drilling program in July make a successful discovery.

IVZ is currently fielding farm-in offers from several interested parties as it prepares for the two well drilling program in July, where the first well will be targeting a 8.2 trillion cubic feet (Tcf) + 247 million barrels of conventional gas condensate (gross un risked basis) prospective resource at Mukuyu-1.

100,000 foot Uranium drilling program detailed

ASX:GTR   May 17, 2022 Announcement

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.

Acquisition of additional project area progressing

ASX:GTR   May 17, 2022 Announcement

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.

Demo plant modules en route to Europe

ASX:EMN   May 17, 2022 Announcement

Investment Memo: EMN 2022

Objective: Construction of the Demonstration Plant


Our European battery metals Investment Euro Manganese (ASX: EMN) today confirmed that the second and final shipment of its demo plant modules had been completed out of China.

EMN confirmed that the delivery of the modules is expected in June/July of this year with assembly on site at its manganese project to commence as soon as the items arrive.

EMN also confirmed that commissioning is still on schedule for ~September and that the first delivery of samples to customers is expected in Q4 2022.

When we launched our 2022 EMN Investment Memo, we had initially expected that the demo plant would be up and running during Q2 of this year. We suspect that the lockdowns in China and all of the impacts the Russia/Ukraine conflict has had on logistics have contributed to the delays.

First samples from demo plant expected in Q4 2022

ASX:EMN   May 17, 2022 Announcement

Investment Memo: EMN 2022

Objective: First offtake partner


Our European battery metals Investment Euro Manganese (ASX: EMN) has detailed an updated timeline for the commissioning of its demonstration plant for its high purity manganese project in the European Union (Czech Republic).

With all of the plant modules now en route to Europe, EMN confirmed that it expected the modules to arrive in June/July with commissioning of the plant expected in ~September.

Importantly, EMN also confirmed that it expects to be able to deliver the first samples from the demo plant in Q4 2022.

As part of our 2022 EMN Investment Memo, we set the securing of an offtake partner as key Objective #3 for what we wanted to see EMN achieve in 2022.

We think that the demo plant is likely to be a precursor for any major offtake deal, given that customers interested in securing long term manganese supply will want to see the product specifications EMN can produce.

With the shipment of first samples now due in Q4 2022, we are hoping to see some newsflow regarding offtake discussions towards the back end of this year.

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)

Directors buying shares on market

ASX:TTM   May 16, 2022

Investment Memo: TTM 2022

General: Director Buying


The last few weeks have been rough across the entire micro cap market and this has been reflected in the TTM share price which has gone from ~10c per share to now trade around the ~7.2c per share mark.

The company’s directors have taken this as an opportunity to add to their shareholdings with 3 directors purchasing ~$275k in total.

  • Managing Director Matt Carr purchased $102.5k in shares on market
  • Newly appointed director Tamara Brown purchased $20k in shares on market
  • Non-Exec chairman Peter Cook purchased $152k in shares on market.

We think directors purchasing shares in times where a company’s share price has moved off the back of no news is generally a good sign, as the people closest to the company see value in topping up their shareholdings.

To see all of the key objectives we want to see TTM achieve in 2022, the reasons why we continue to hold TTM in our portfolio and the key risks to our Investment thesis, check out our 2022 TTM Investment Memo here.

Mark Creasy purchases $1.74M in shares on market

ASX:GAL   May 16, 2022 Announcement

Investment Memo: GAL 2022

General: Director Buying


Mark Creasy has purchased another $1.74M in shares on market at 58c per share, increasing his shareholding in GAL to 26.35% of the company.

The ASX “change in substantial holding” notice came a day after the announcement last week of a new major palladium/platinum discovery at its Norseman project.

After the share price briefly touched ~70c on the day of the announcement, it's a positive sign that someone with the experience of Mark Creasy steps up and buys up a large chunk of shares when the share price has a minor pullback.

One of the key reasons we continue to hold GAL in our portfolio is because of the high quality management team and the experienced major shareholders backing the company.

We think the aggressive buying by Mark Creasy after the material news put out last week is positive affirmation as to the potential of the new discovery GAL announced.

Check out our 2022 GAL Investment Memo to see all of the key reasons why we hold GAL, what we want the company to achieve this year and the key risks to our Investment thesis.

India bans wheat exports, food security now a global issue

ASX:MNB   May 16, 2022

Investment Memo: MNB 2022

Macro Theme: Global Food Security


Over the weekend Bloomberg reported that India had banned wheat exports. Here are our key takeaways from the article and how it relates to our food security Investment Minbos Resources (ASX: MNB):

Read full article here

Key takeaways:

  • The Russia/Ukraine war has meant that logistics in the Black Sea region (Which accounts for ~ ¼ of all wheat trade) has been disrupted, India was expected to step in and fill in this gap.
  • The Indian government has stated that national food security is priority number one.
  • The German government also commented on the export ban with the agricultural minister saying “If we all started imposing these export limits, or even closed down markets, that just makes the crisis worse”.

All of this means that the world needs to invest in food security projects ranging from fertiliser to direct agriculture all around the world in different locations. This is where MNB fits in.

Tanzanian Gov discussions, improved DFS coming by September

ASX:EV1   May 16, 2022 Announcement

Investment Memo: EV1 2022

Objective: Final Construction Decision & Project Funding

Milestones: FEED - Appoint Engineer: 🔲 → 🔄


EV1 is advancing a Framework Agreement with the Government of Tanzania around their free-carried interest in EV1’s Chilalo project.

This should further aid project financing discussions as there will be more certainty around economic metrics.

EV1 says its DFS optimisation should be complete by September, with an engineer to be engaged this month for Front End Engineering Design. We expect the economics to improve with rising graphite prices and ESG elements to also be included.

We’ve updated the Key Objectives from our EV1 Investment Memo accordingly:

Auramet appointed to advance project financing

ASX:EV1   May 16, 2022 Announcement

Investment Memo: EV1 2022

Objective: Final Construction Decision & Project Funding

Milestone: N/A


EV1 has appointed leading resources financier, Auramet, to help advance project financing.

Mark Tyler of Auramet said he thinks it's “one of the most attractive graphite opportunities globally.” And we agree.

Having Auramet onboard is a significant win for EV1 and should help them make progress towards Key Objective #1 from our EV1 Investment Memo:

Where to catch the EMN conference call tomorrow

ASX:EMN   May 16, 2022 Announcement

Investment Memo: EMN 2022

General: Investor Conference


The EMN conference call is tomorrow (17/5/2022) at 8:30AM AEST, and the webcast can be found here:

https://edge.media-server.com/mmc/p/8avtssir

We’re looking forward to an update from CEO Matt James and CFO Martina Blahova and hope to hear more about the timetable for a number of operational milestones, as Matt James puts his stamp on EMN.


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