Battery Metals

The fund that hoarded uranium is now preparing a 'Physical Battery Metals Trust'

Wed 28 Sep 22, 11:59am (AEST)
Recycle Battery Renewable
Source: iStock

Key Points

  • Sprott Asset Management is a Canada-based investment manager known for their Physical Uranium Trust
  • The Uranium Trust purchased almost 59m pounds of uranium to date
  • The proposed fund plans to invest its proceeds in physical nickel, cobalt and lithium

Sprott Asset Management has filed a preliminary prospectus for a proposed 'Physical Battery Metals Trust' to be listed on the Toronto Stock Exchange.

The fund has been established to invest its proceeds in physical nickel, cobalt and lithium. For investors, it provides them with the opportunity for direct exposure to what is otherwise difficult to access battery metals.

Sprott isn't exactly a household name among ASX investors so let's breakdown who they are and why this could be something significant for the battery metals space.

Sprott explained

Sprott is a global investment manager based in Canada, specialising in precious metals and real assets investing.

They're most well known for launching a Physical Uranium Trust back in July 2021. The fund served one and only one purpose: Buy physical uranium and store it away as a long-term investment.

To date, the fund has purchased almost 59m pounds of uranium, which is equal to roughly 55% of global uranium output in 2021, according to the World Nuclear Association.

When the fund was launched, uranium prices were trading around US$30/lb. The aggressive buying was a driving force behind uranium's rally to a 10-year high of US$$64.6.

Prices have since dwindled to around US$50 but still high compared to where they've been for the past ten years.

Uranium spot price
Uranium spot price (Source: TradingEconomics)

What happens now?

The fund's initial public offering plans to list at US$10 a unit. However, the number of units to be sold has yet to be disclosed.

Depending on the size of the fund, the amount of battery metals it accumulates could be significant. So watch this space.

The fund would also offer investors, more broadly speaking, greater transparency around the prices of these rather difficult to track commodities.

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

Get the latest news and insights direct to your inbox

Subscribe free