It was only a few days ago that we learned that Gina Rinehart retained her spot as Australia's richest person for 2024. With a fortune worth over $40 billion, Rinehart saw her wealth rise a healthy 8.5% since the 2023 rich list was released. So it goes without saying that investors are going to be paying close attention to any ASX shares (usually ASX mining shares) that Rinehart might be buying or selling.
We've documented a few of Rinehart's ASX mining shares in recent years, including Azure Minerals Ltd (ASX: AZS) here and Titan Minerals Ltd (ASX: TTM) here.
But today, let's talk about Vulcan Energy Resources Ltd (ASX: VUL).
Rinehart's interest in this lithium stock first emerged back in 2021. Rinehart's Hancock Prospecting also took a big stake in Vulcan's $120 million capital raising program that year.
It appears Rinehart is doubling down on this ASX mining share this week.
Rinehart buying up ASX mining share
According to an ASX filing released this morning, Vulcan confirmed that a number of institutional investors have just made a large investment in the company. This was done via a private share placement program.
The filing states that CIMIC Group, Victor Smorgon Group and Hancock Prospecting have all been issued with additional Vulcan shares. CIMIC made a 25 million euro investment and was issued with 10 million shares as a result. Victor Smorgon invested 2.5 million Euros and was awarded 1 million shares.
Hancock came right in the middle, investing 12.5 million Euros ($20.41 million) and receiving 5 million shares for its efforts.
These investments were executed at a price of 2.50 Euros per share, or $4.08. That's reportedly a 9% discount to Vulcan's 30-day volume weighted average price as of last Friday.
Collectively, they have raised 40 million Euros (approximately $65 million) for Vulcan.
Vulcan stated the following in light of these cash injections:
The Investments demonstrate commitment from strategic investors to support the lithium value chain globally and the construction of Phase One of Vulcan's integrated renewable energy and ZERO CARBON LITHIUM Project (the Project) in Germany…
These strategic Investments will materially contribute to the funding of pre-execution activities during the final stage of Project financing and protection of the Project's deterministic execution schedule.
Specifically in relation to Hancock Prospecting, Vulcan expanded:
HPPL [Hancock Prospecting Pty Ltd] is Australia's most successful private company and has maintained a significant shareholding in Vulcan since January 2021. Through its [12.5 million Euro] Investment, HPPL has increased its substantial shareholding to ~7.5% of the outstanding share capital of Vulcan. HPPL will become Vulcan's second largest shareholder…
HPPL and Vulcan have shared a supportive, long-term relationship, with HPPL maintaining a top-5 shareholding position in the Company since January 2021. Today's investment builds upon this, with HPPL increasing their ownership to ~7.5% of Vulcan's issued capital. Vulcan welcomes HPPL's increased investment and looks forward to a further continuation of the strong partnership between the two companies.
Investors lap up Hancock's buy
It's clear that the markets approve of this announcement from Vulcan today. The Vulcan Energy Resources share price closed at $4.74 last Friday afternoon and opened at $4.62 this morning. But at market close today, those same shares finished trading at $5.08, up 7.17% for the day.
That puts this ASX mining share up a huge 80.78% in 2024 to date. Vulcan is also up 34.75% over the past 12 months.
However, Rinehart might still be underwater from some of Hancock's 2021 investments in the company. Back in 2021, Vulcan shares got as high as $16 each. As such, some long-term investors would remain down on their investments at the current share price.
