‘Strong Performance' From Tomorrow’s Clean Energy Sources: Viriathus Capital's CIO Speaks

Source: Shaun Cartwright for Streetwise Reports   10/19/2021

Shaun Cartwright, Managing Director & Chief Investment Officer of Viriathus Capital, has a bullish view for the energy sector, where billions of dollars are being invested globally into initiatives to reduce our carbon footprint by 2050.

Viriathus Capital is a global boutique financial services group that provides services from its 4 offices spanning 3 continents.

This Thursday, 21 October, Viriathus Capital will host the Future Energy Conference featuring the following companies: 

“Our investors have made it clear; they want to be invested in these companies.”

• Anson Resources Limited
• QEM Limited
• Lake Resources NL
• Elevate Uranium Limited
• Pan Asia Metals Limited
• Hazer Group Limited
• Prospect Resources Limited 
• Sprintex Limited
• Kuniko Limited

Viriathus Capital has been fortunate enough to work with many of the ASX-listed companies that are developing the energy sources of tomorrow.  We’ve seen a seismic shift towards companies developing tomorrow’s energy sources, and our investors have made it clear; they want to be invested in these companies. In dealing with our client companies, we’ve learnt a lot about cleaner energy sources such as lithium, vanadium, uranium, and hydrogen and our investors’ portfolios with exposure to these companies have performed well.

As the world moves closer to 2050 and its objective for a zero-carbon future, Viriathus Capital has a bullish view for the sector in general, and particularly for each of the companies presenting at the conference, and we’re really looking forward to showcasing these companies later this week.

This has been helped by developed nations across the globe establishing pacts and initiatives to move towards a zero-carbon future. Billions of dollars from both the public and private sector are being invested globally into new initiatives to reduce mankind’s carbon footprint by the year 2050 and equity markets across the globe have seen large inflows of capital into the companies that are developing (or producing) the energy sources of tomorrow.

“To deliver a low carbon or zero carbon future, the pace of production of more sustainable battery materials needs to accelerate to deliver the energy transition to electric vehicles and renewable energy storage.”

Steve Promnitz, Lake Resources N.L. (LKE:ASX)

Battery minerals have received the lion’s share of press coverage, mainly thanks to the Electric Vehicle (EV) market, with most of the world’s auto manufacturers now either producing or developing EV’s.

“The increase in the price of lithium is due to several factors, including sustained demand in China for EV’s due to government policies, consumer demand in Europe and the USA for EVs.”

Bruce Richardson, Anson Resources Limited (ASX.ASN)

Compared to total vehicle sales, the EV’s market share is still small (2.7% in 2020), but according to Bloomberg, the market share could grow to 10% by 2025 and over 50% by the end of 2040. 50% of an EV’s cost is its battery pack; it is the largest factor in the price difference between EVs and regular vehicles. This differential could change as battery prices decline along with subsidies granted to EV manufacturing and distribution in many countries.

“Electric vehicles are the future. Automotive OEM’s not centring their strategy on EV’s will be left behind.”

Bruce Richardson, Anson Resources Limited

Uranium has come a long way in recent times, with it now being widely accepted as a cheap, clean energy source. Uranium equities have been well supported in 2021, partly thanks to Canadian specialty metals Fund Manager, Sprott, launching a uranium fund with a mandate to invest in global uranium equities.

“The world’s increasing appetite for decarbonisation and electrification is leading to the acceptance that nuclear is the energy source of choice to achieve these targets.”

Sam Hosack, Prospect Resources Limited (ASX.PSC) 

Lithium, a key component of a battery, has witnessed a surge in demand in the recent past. According to a report by Roskill, the global demand could surge by 19% per annum up to 2030. The demand growth could create a tight market situation, support lithium prices, and lead to new lithium production commissioning.

“Musk lit the lithium fire with Tesla and Bezos added fuel to it with Amazon’s order of 100,000 Rivian Electric Trucks, but for the current and emerging lithium suppliers it’s not just about short-term supply, they need to be cost competitive and carbon neutral for the long term.

Paul Lock, Pan Asia Metals Limited (ASX.PAM)

Pan Asia Metals recently announced its acquisition of new tenements that have the potential for geothermal lithium, a similar Lithium source as market favourite, Vulcan Energy Resources Limited (ASX.VUL), who recently spun off zero-carbon Lithium developer, Kuniko Limited (ASX.KNI).

Kuniko is committed to an electrified, net zero-carbon production process for its ethically sourced battery minerals Cobalt, Copper and Nickel.

A little-known fact about lithium batteries is that they contain more Cobalt than Lithium, Cobalt being the mineral that stabilises the Lithium and stops it exploding. A few years ago, when there were widespread reports about mobile phones exploding was due to the manufacturer skimping on the amount of Cobalt in their phones batteries to save on production costs.

In 2019, rechargeable batteries accounted for 54% of the total lithium demand, mostly from Li-ion battery technology. The growth drivers are Li-ion batteries in the automotive and energy storage systems, higher industrial uses of lithium products, and other applications.

“The increase in the price of lithium is due to several factors, including sustained demand in China for EV’s due to government policies, consumer demand in Europe and the USA for EV’s.”

Murray Hill, Elevate Uranium Limited (ASX.EL8)

Hydrogen is another candidate for alternative fuel sources, with Global Market Insights Inc estimating that the market was around US$140 billion last year. Traditional hydrogen generation processes release significant amounts of gaseous carbon into the surroundings, but Hazer Group Limited (ASX.HZR) developed the Hazer Process, which offers an advantage over the other hydrogen generation methods by producing clean hydrogen with a higher energy value than that is required.

Hydrogen has been popular with investors over the last 18 months also, with Fortescue Metals Group pledging to build a 2GW hydrogen electrolyser plant in Australia and Fortescue’s Founder, Andrew Forrest investing millions into developing cleaner hydrogen sources.

Queensland-based QEM Limited (ASX.QEM) is also taking advantage of its green hydrogen sources to develop its Vanadium processing facility and is accelerating its strategy to produce green hydrogen at its Julia Creek project. Vanadium Redox Flow batteries are an alternative to Lithium Ion batteries and offer a number of advantages in larger batteries.

Apart from mining the resources required for our future energy needs, companies like Sprintex Limited (ASX.SIX) are developing significantly more efficient superchargers that use cleaner energy sources, such as hydrogen.

Australia added over 7,000 megawatts of new renewable capacity to its electricity grid last year alone, and as such, we thought now was a great time to create a platform for a carefully selected group of ASX listed companies to present to the investors that are investing in this sector.

As stated earlier, Viriathus Capital has a bullish view for the sector in general, and particularly for each of the companies presenting at the Future Energy Conference this week.

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Disclosure:
1) Shaun Cartwright compiled this article for Streetwise Reports LLC. Shaun Cartwright is the Managing Director & Chief Investment Officer of Viriathus Capital.

2) Disclosure: Viriathus Capital, its staff and / or its investors declare a beneficial interest in each of the companies presenting at the Future Energy Conference.

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( Companies Mentioned: ASX.ASN, ASX.EL8, ASX.HZR, ASX.KNI, ASX:LKE; OTC:LLKKF, ASX.PAM, ASX.PSC, ASX.QEM, ASX.SIX, ASX.VUL, )