International stock-trading entrepreneur Jim Mellon was far from just throwing a random dart at the ASX boards when he decided to stack his considerable financial wealth behind an Australian lithium mission.
Having amassed a fortune with a range of bold ventures headlined at one point by buying up oil and gas stocks via coupons on the streets of post-Soviet Russia, Mellon is adamant the current lithium craze is not just a fad … and he has his money where his mouth is.
The Isle of Man-based English businessman believes global demand for the silvery-white metal will continue to skyrocket for at least the next decade and he is partly backing that conviction as the biggest shareholder (19.86 per cent) of Australian explorer Dart Mining.
In an exclusive interview with Bulls N’ Bears, Mellon outlined his belief that the global surge behind lithium is still only in its infancy as the world tools up for production. And he sees Australia at the forefront of the industry.
“I think lithium demand in the next decade will increase by at least five times,” Mellon said.
“I am very keen on lithium, especially in Australia and in the United States given the political situation (elsewhere in the world). Australia has a huge future in lithium because of its political security and it will be a massive business over the next 10 years.”
And Mellon’s musings on lithium should not be taken lightly. Back in 2018, he commissioned a study on lithium and forecast prices would rally by at least 10 times more than what other professional forecasters were pinning it at. His vision, based on the needs and demand for battery storage and grid management, proved to be spot on the money and underpinned his global plunge into lithium stocks.
Mellon says his liaison with Victorian-based Dart is based on a long-time friendship with the company’s managing director James Chirnside. He retains a strong belief in the prospects of Dart, which made Victoria’s first-ever lithium pegmatite discovery in 2016 when it reassessed historically-untested samples that revealed results of up to 1.57 per cent lithium oxide.
He said the company’s $12 million earn-in agreement with Chilean mining giant Sociedad Química y Minera de Chile (SQM) signed in December last year was also a key confidence-builder.
Dart says its exploration objective is to target orogenic gold, porphyry, precious and base metals and strategic minerals such as lithium, tantalum, tungsten, antimony and rare earths. But it is understood that lithium will be its main immediate focus.
“The fact that SQM is backing the Dart exploration is a big plus for me,” said Mellon, who publicly predicted the global credit crunch of 2007-08 in a book titled "Wake Up! Survive and Prosper in the Coming Economic Turmoil".
“Dart has many prospective projects including lithium and gold and if anything, it might be too many for the market to understand. But it is a long-term banker, in my honest opinion.
“I have known James for 30 years. He is a great friend, a hard worker, a trusted colleague and a good thinker. I, of course, was happy to back him, and in every fund raise I have taken my share of about 20 per cent.
“It’s a tough market out there, as we all know, but one day James’s ship will come home.”
When Mellon was still finding his feet in the cut-throat business world, it was a brush with a couple of icons who locked him into the industry for life.
“When I was a fund manager in the US in the early 1980s, I got to meet people like Bill Gates and Steve Jobs,” he crooned. “What an opportunity for a young fellow.”
And Mellon used the same type of lateral thinking that turned Gates and Jobs into global business giants when he made the speculatory foray into post-Soviet Russia that would supercharge his financial fortunes. He had already become a millionaire at age 28 after selling the United States-based Thornton Management company he had co-founded, but regarded his Russian mission as his “first really big break”.
From 1992 to 1994, the Russian Government decided to divest ownership of 15,000 State-controlled firms by selling share vouchers on the streets. The bold public plan was designed to limit the business control of the Russian mafia and the group of bureaucrats dubbed the “nomenklatura” and piqued the interest of budding businesspeople such as Mellon.
He and American-born British investor and philanthropist Sir John Templeton were understood to have spent $2 million in a day buying up big on the $25 vouchers available. The haul’s worth reportedly grew to $17 million in just a few weeks.
“We were among the first investors, but knew nothing except that oil and gas was the likely best way to go – so we bought anything with those words in the name (of the companies),” Mellon explained.
“Russia was and is a dangerous place, so we hired bodyguards and used US dollars to swap for coupons, which entitled us to bid in auctions for State-owned assets. This was 1994 and it was literally the ‘Wild East’. I wouldn’t have the guts today.”
Fast-track to today and Mellon, who regularly bobs up on published “rich lists” in the United Kingdom, has pivoted his investment thinking to include areas such as human life longevity, agriculture and the environment, alongside his more traditional mining industry-based interests that form part of his worldwide business empire.
The Oxford University graduate said he had become a major shareholder in Agronomics, which he described as the world’s leader in precision fermentation and cellular agriculture. He was also watching closely to see what effect the ongoing conflict in the Middle East would have in the investor space – particularly in the stockmarkets of the United Arab Emirates, Israel and Saudi Arabia.
But Mellon, who co-founded companies including UraMin, Condor Gold and Bradda Head Lithium, remained connected to and impressed by the Australian mining exploration industry … and he had a couple of tips to boot for Bulls N’ Bears readers.
“The Australian mining sector is among the three most prominent and respected in the world,” he said.
“I think tungsten and tin will be critical along with lithium (in the immediate future) and the processing capabilities will be developed outside of China in rapid order. I own a stake in Zenith Minerals in Australia and have been involved in Syrah Resources and Giralia Resources going back some way.
“If was going to give any advice, personally, I would invest most money with reputable fund managers. But for some speculative investment, go into shares direct.”
Dart is in the midst of an entitlement offer where it is hoping to raise up to $1.16 million. And with Mellon’s millions tucked soundly in behind it, the company’s lithium hunt should have plenty of grunt.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Steve Butler
