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MONTHLY UPDATE
Lowell Resources Funds Management Ltd. ABN 36 006 769 982 AFSL 345674 | January 2022 | |
January 2022 Performance Summary:
Lowell Resources Fund (ASX: LRT)
The Lowell Resources Fund estimated net asset value ('NAV') at the end of January 2022 was approximately $55.6m, compared to $57.2 million at the end of December 2021.
The NAV per unit finished the month of January at $1.896/unit (vs $1.948/unit at 31
December 2021). The traded unit price of the ASX listed LRT units at month end was $1.75/unit.
For personal
FUND OVERVIEW
Investment | Lowell Resources Funds |
Manager | Management Limited |
Managed since | 6 February 2004 |
ASX code | LRT |
Income | Annual |
distribution |
FUND SNAPSHOT 31 January 2022
NAV per unit | $1.896 |
No. of Units on issue | 29,354,614 |
Market Price (ASX) | $1.75 / unit |
Estimated NAV | $55.6m |
August 2021 Distribution | $0.15/unit |
Market Capitalisation | $51.4m |
Lowell Resources Fund NAV | |
3.50 | vs |
ASX Junior Resources Index | |
3.25 | (rebased to 1 at December 2019) |
3.00 | |
2.75 | |
2.50 | |
LRT | |
2.25 | NAV |
2.00 | |
1.75 | |
1.50 | |
1.25 | |
1.00 | |
0.75 |
For personal use only
MONTHLY UPDATE | ||
January 2022 | ||
Lowell Resources Funds Management Ltd. LRT
Fund Investment Actions - January 2022
In precious metals, the Fund boosted its holdings in ASX listed west Africa-focused explorer African Gold, and participated in the pre-IPO round for Mawson Gold spin-off Southern Cross Gold. The Fund also added to its positions in Alchemy Resources and Carnavale Resources.
In precious and base metals, the Fund completed its profitable exit from Zenith Minerals, as Zenith's share price rose after refocusing on lithium and receiving positive results from the Earaheedy zinc JV.
In January, the Fund also added to its position in O&G supply company Matrix Composites & Engineering.
LRF COMMODITY EXPOSURE 31 JANUARY 2022
Bauxite | Uranium | Helium | ||||
0% | ||||||
Mineral Sands | 1% | 2% | Mining Services | |||
Fertilisers | ||||||
1% | 1% | |||||
Cash | 3% | |||||
7% | ||||||
Nickel | ||||||
8% | ||||||
Battery | Gold & PGM | |||||
4% | 48% |
O&G
8%
Base Metals
15%Silver REE
1% 1%
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MONTHLY UPDATE
Lowell Resources Funds Management Ltd. LRT
only | ||
Fund Top Holdings | ||
Predictive Discovery (PDI.ASX) appointed new | ||
MD Andrew Pardey, previously CEO of US$1.5 | ||
billion LSE/TSX-listed Centamin plc. Paul Roberts | ||
will continue to lead the team which discovered the | ||
3.6Moz NE Bankan deposit as Technical Director. | ||
use | Progress was made in the permitting process for | |
the development of the project with the government | ||
of Guinea. | ||
Musgrave Minerals (MGV.ASX) JV partner | ||
Evolution Mining intersected new high grade lodes | ||
at West Island, including 4.3m at 41.5 t/t Au. | ||
Evolution has added $3-6m to its spending on the | ||
JV this half year and elected to take over | ||
personal | management of the JV. On its 100% owned | |
ground, MGV drilled three new gold zones on the | ||
Waratah trend, including 2m at 28 g/t Au. Target 14 | ||
also returned 9m at 8.7 g/t Au. | ||
Azure Minerals (AZS.ASX) began its first drilling | ||
program at the 100% owned Barton gold project, | ||
including testing for along-strike extensions of | ||
Genesis Minerals' Puzzle North discovery which | ||
adjoins Azure's tenement boundary. | ||
Talon Metals (TL.TSX) announced it had entered | ||
into an agreement with Tesla Inc to supply 75,000t | ||
of nickel in concentrate from the company's | ||
Tamarack Nickel Project in Minnesota. | ||
Fund Top Performer | ||
For | Pacgold Limited (PGO.ASX) share price rose | |
82% in January, and moved into the top 10 | ||
holdings for the Fund. PGO announced a | ||
significant expansion of the new high-grade gold | ||
zone below and along strike of the historical open | ||
pit at its Alice River gold project in Far North | ||
Queensland. Drill results included 17m at 9.3g/t Au | ||
and 6m at 6.5 g/t Au. The gold system has been | ||
identified over 3.5km of strike. The Fund has | ||
invested in the company at its seed funding round, | ||
at IPO and on-marketpost-listing. | ||
January 2022
LRF Portfolio Value by Project Stage |
31 January 2022 |
60% |
50% |
40% |
30% |
20% |
10% |
0% |
Company | Commodity | % of Gross | |||||
Investments | |||||||
Cash | Cash | 6.6% | |||||
Predictive | Gold | 7.6% | |||||
Discovery | |||||||
Genesis Minerals | Gold | 6.0% | |||||
Musgrave | Gold | 5.6% | |||||
Minerals | |||||||
De Grey | Gold | 4.7% | |||||
Mining | |||||||
Azure Minerals | Nickel | 4.1% | |||||
Talon | Nickel | 3.9% | |||||
Metals | |||||||
Pacgold | Gold | 3.4% | |||||
Caravel Minerals | Copper | 3.0% | |||||
South Harz | Potash | 2.5% | |||||
Potash | |||||||
Blue Star Helium | Helium | 2.4% |
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MONTHLY UPDATE | ||
January 2022 | ||
Lowell Resources Funds Management Ltd. LRT |
only | |||||||||||||||||
Performance Comparison - January 2022 | |||||||||||||||||
Over the past 12 months, the Lowell Resources Fund's change in underlying estimated net asset value | |||||||||||||||||
per unit (inclusive of distributions and after fees and expenses) was 33.2%, and 87.3% pa over two | |||||||||||||||||
years. The Fund has outperformed the benchmark S&P/ASX Small Resources Index (XSRD), the ASX | |||||||||||||||||
Resources 300 Index, and the ASX 200 Index over one, two, five and ten years. | |||||||||||||||||
use | Total Portfolio | LRT Change in | S&P/ASX Small | ASX Resources | ASX 200 Index | ||||||||||||
Performance to 30 | NAV per unit incl | Resources Index | |||||||||||||||
300 Index | |||||||||||||||||
November 2021 | distributions | (XSRD) | |||||||||||||||
12 months | 33.2% | +22.4% | 13.6% | 9.4% | |||||||||||||
2 years p.a. | 87.3% pa | +20.4% pa | 10.7% pa | 3.0% pa | |||||||||||||
5 years p.a. | 22.1% pa | +11.3% pa | 13.7% pa | 8.5% pa | |||||||||||||
personal | 10 years p.a. | 13.9% pa | -3.7% pa | 4.8% pa | 9.5% pa | ||||||||||||
• | The Fed's statements pushed the yield on the 2-year bond up 10 basis points, while the 10-year | ||||||||||||||||
The LRT.ASX traded unit price at the end of January was $1.75/unit, the same unit price as at the end of | |||||||||||||||||
December. | |||||||||||||||||
Market Notes | |||||||||||||||||
• Equity markets were volatile in January, with the S&P 500 falling over 9% at one point from 1st | |||||||||||||||||
January levels. US real interest rates climbed back to pre-Covid levels, unemployment in the US | |||||||||||||||||
dropped to a pre-pandemic 3.9% low, and the December US consumer price index rose 7% from | |||||||||||||||||
a year earlier, the fastest pace since June 1982. | |||||||||||||||||
• Excluding food and energy, so-called "core CPI" was up 5.5% on the year, the biggest growth | |||||||||||||||||
since February 1991. Jerome Powell called inflation a "serious threat" and said the US Fed won't | |||||||||||||||||
hesitate to act to rein it in, signaling it will begin lifting interest rates "soon". | |||||||||||||||||
For | bond reached 1.86%. | ||||||||||||||||
• | The US $ gold price was softer over January, but SPDR Gold Shares, the largest bullion-backed | ||||||||||||||||
exchange-traded fund, recorded its biggest one-day net inflow in dollar terms since listing in 2004 | |||||||||||||||||
-- worth $1.63 billion. Holdings declined in 2021, a lacklustre year for gold prices. | |||||||||||||||||
• Oil markets rallied alongside rising tensions in the Russia-Ukraine conflict which caused jitters in | |||||||||||||||||
the market about potential supply disruptions. Futures in New York rose as much as 2.6% with the | |||||||||||||||||
Brent global benchmark touching $US90 per barrel for the first time in seven years in late January. | |||||||||||||||||
According to the Rice Report, despite OPEC having undertaken to increase supply, only two of its | |||||||||||||||||
members have been able to achieve that, being Saudi Arabia and Iran. There are claims that | |||||||||||||||||
Russia is at capacity limits and 17 other OPEC members are below the quota because they have | |||||||||||||||||
4 | |||||||||||||||||
For personal use only
MONTHLY UPDATE | ||
January 2022 | ||
Lowell Resources Funds Management Ltd. LRT
hit their production constraints.
- Indonesia president Widodo said that more than 2,000 mining, plantation and forest use permits had been revoked, of which 1,776 were for metals and minerals mining.
- The nickel price hit decade highs as inventories fell for 50 straight days (the most since 2000) as Shanghai stocks neared their record low. BHP, having lost the battle for Noront nickel, invested $100m in the Kabanga early stage nickel project in Tanzania. Tesla announced an offtake agreement with Talon Metals' Tamarack nickel project in Minnesota.
- Iron ore surged back over US$147/t.
- Bank of America forecast the global aluminum market to be in a deficit of 254,000 tons this year, and a much larger deficit of 1.876 million tons in 2023. It expects spot aluminum prices to average $3,125/t this year, up 26% from the 2021 average. Soaring power costs from the European energy crisis have forced producers to cut output in the region. Smelters in France and Spain have reduced output by more than 590,000 tons, according to CRU Group. Chinese smelters, which produce about half of the world's primary aluminum, are also expected to curtail output.
- Rare earth prices jumped again, increasing costs for manufacturers such as car makers. Neodymium and praseodymium - elements used in permanent magnets for cars and electric motors - rose to the highest level in more than a decade. Chinese industry regulators urged raw-material companies in the electric vehicle supply chain to absorb some of the cost increases instead of passing them on to avoid undermining EV development. China is a dominant producer of rare earths, accounting for 70% of global production, and exports rose to a record last year. The country is consolidating the sector by merging key producers to strengthen its control over the industry.
- It was feared the spread of protests in Kazakhstan could eventually cause workforce absenteeism and supply chain issues, resulting in a temporary uranium supply disruption. 46% of global mine supply of uranium is produced in Kazakhstan. Uranium supply out of Kazakhstan was already expected to be under pressure in 2022, with Kazatomprom, the world's largest producer, previously flagged ongoing supply chain issues related to COVID-19. Unrest in Kazakhstan also lent support to the copper price.
- Reportedly the world's first shipment of liquefied hydrogen began loading at the port of Hastings in Victoria, due to depart for Japan. However, experts say the extremely low temperature required for the long-distance transportation of liquid hydrogen and its lower energy density compared with LNG make it a significantly more expensive energy source.
- Lithium carbonate prices in China spiked to over US$48,000 per tonne. Mine supply is struggling to keep pace with new Gigafactory expansion and has also been hit by a plant maintenance and output limits in China alongside labour shortages in Australia. . Buoyed by a combination of a rebound in demand and the industry's inability to quickly increase supply, lithium prices soared in 2021 - carbonate jumping 431%, hydroxide 340% and spodumene 532%.
- Palladium rose to its highest in four months, with traders looking to secure supplies amid growing tensions over Ukraine as Russia, the top metal producer, massed troops near the border. Russia produces around 40% of freshly mined palladium.
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Lowell Resources Fund published this content on 08 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 February 2022 23:57:03 UTC.