ASX:ATR
Astron Corp Ltd
Investment Summary
The fund managers believe that Astron Corp Ltd presents a compelling investment opportunity, driven by its significant assets in both rare earths and zircon. The company's extensive undeveloped sites, particularly in Victoria, are strategically valuable, with the rare earths project receiving attention due to supply concerns in global markets. The fund managers are especially excited about Astron’s zircon reserves, which face supply constraints and rising prices, making the company well-positioned to benefit. In their opinion, Astron’s management, with deep industry experience and alignment with shareholders, combined with the substantial undervaluation of the company, creates a strong potential for significant returns once the company progresses with its feasibility studies.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Manager
Collins St Asset Management
Date
31 Mar 2022
Price
$0.58
Medium
Quarterly Report
Commentary
Collins St Value Fund continues to hold Astron Corp Ltd (ATR) due to the significant upside potential of its rare earths and zircon projects. Earlier this year, the Fund entered a convertible note agreement with Astron at a strike price of 54c, allowing for future equity conversion. With the company's share price at just 45c at the time, this investment provides a strategic opportunity to benefit from the growing demand for rare earths, crucial in technologies like wind turbines and electric vehicles, and zircon, a key ingredient in ceramics. Astron owns one of the world’s largest undeveloped zircon and rare earths sites, with its Donald project alone capable of supplying five years of global zircon demand. The company’s deep expertise in the industry, combined with its management’s strong co-investment, aligns interests with shareholders. Despite a market cap under $100 million, Collins St Value Fund believes that the progression of Astron’s projects and the upcoming definitive feasibility study (DFS) could significantly increase the company's value, potentially pushing the share price above $2. The rare earths deposit also holds strategic value, which makes Astron an exciting long-term prospect.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.