The commodity hunt with explorers

Investing in Commodities using EasyEquities

The commodity space is experiencing more volatility as policymakers implement and suggest policies that have an impact on the future of commodities. This may create an entry opportunity for INVSTRs.

And while investing in commodities directly through the stock market may not be possible, mining companies are amongst the investment vehicles that expose investors to the fluctuation of commodity prices.

We’re taking a look at mining exploration companies that are making strides during this unprecedented period, and creating value for investors as they secure bags of different projects.

Castle Minerals Limited (CDT)

Graphite

With electric vehicles hitting the mainstream economy, many countries have set goals to move into the EV space - this has created a conducive environment for EV manufacturers and has put metals associated with the development of EVs, especially batteries, in the spotlight. These minerals include graphite; a mineral used in manufacturing EV Batteries. The mineral is high in demand as it comprises 95% of the negative electrodes in batteries that power EVs (lithium-ion).

While most of the world’s graphite is exported from China, trading at $0.02 per share is Castle Minerals, a mining exploration company positioning itself in the EV battery metal space. The company recently acquired a graphite project in Kendenup. The project is expected to be a multi-phase exploration project once all permits are obtained and applications approved.

Commenting on the acquisition, Stephan Stone said:

“The acquisition of the Kendenup graphite project in Western Australia’s southwest is highly complementary to Castle’s growing battery metals interests comprising the Kambale graphite project and the Wilgee Springs and Woodcutters lithium projects.

“We can see a lot of upside at Kendenup and are very keen to progress this project as rapidly as possible and as we are all of our battery metals projects, with several work programs about to commence or as soon as various licences have been granted.”

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Azure Minerals Limited (AZS)

Gold

After talks of fast-tracking tapering by central banks, a new Covid variant has hit the global economy by surprise. Considered a fast-spreading variant, Omicron is has become one of the contributors to rising cases, especially in the US. As the virus continues to spread, fears of inflation into the markets have arisen, which fuel the volatility in the gold market and may create an opportunity to buy.

Since 2020 Azure minerals, an exploration mining company with a portfolio focused on Nickle-copper projects and gold, has secured various projects and licenses. Recently Azure announced that this comprises of several exploration licenses. This was subsequent to the acquisition of the Barton Project, located in a region rich with gold in Western Australia.

According to the Managing Director, Toby Rovira,

“Azure has emerged as one of the largest landholders in the Kookynie Gold District, one of the hottest gold provinces in Western Australia, highlighted by the recent exploration successes and corporate activities of neighbouring companies like Genesis Minerals, Saturn Metals, Nex Metals and Metalicity.

“While Azure’s main endeavours remain focused on advancing our outstanding Andover nickel-copper cobalt sulphide project in the Pilbara, the Kookynie gold assets provide the Company with an opportunity to broaden our commodity exposure into the gold space.”

Currently, Azure Minerals is trading around $0.35 per share with a market cap of $104 million, as of writing.

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Elevate Uranium Limited (EL8)

Uranium

With governments globally showing signs of shifting toward nuclear power, Uranium stands to grow from the resurgence of renewable energy as the metal is used to form nuclear energy.

And while the market becomes profitable, Elevate Uranium, an exploration company with uranium projects in Australia and Namibia, has successfully raised capital, resulting in a bank balance of $16.5 million - this was through a private placement. According to the company, the raised capital will be used to accelerate its ten projects in both Namibia and Australia, also enabling the company to expand its “exploration ambitions.”

Commenting on the capital raise, Elevate Uranium Managing Director Murray Hill added that:

“In recent years, we have achieved significant success in acquiring uranium tenements and projects, exploring for and identifying significant uranium mineralisation.

“With cash of $16.5 million, the company will now significantly accelerate the pace of its activities and we will hit the ground running in the new year, with aggressive exploration programs throughout 2022, in both Namibia and Australia. These activities are expected to generate regular news flow. “

Elevate Uranium Limited is trading around $0.39 with a market cap of $104 million, as of writing.

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Roundup

While explorers (mining exploration companies) are considered the most volatile compared to the commodities themselves, other investment vehicles such as mining companies and ETFs may also offer investors fluctuations with less volatility. This may differ slightly depending on the fundamentals of the vehicle.

And aside from exposure of single commodities, mining companies may also act as a basket investment of various commodities depending on the operations and mining portfolio, which may provide safety if one commodity demand lags.

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Sources – EasyResearch, Elevate Uranium Limited, Azure Minerals Limited, Castle Minerals Limited

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