Electrification and Battery Metals Contrarian Plays: EVN, AIS, CSC, NIC and LTR + Bonus

As markets look toward 2026, the global commodity landscape is increasingly defined by a pronounced divergence between defensive and industrial metals, creating both opportunities and challenges for investors navigating what appears to be a pivotal cycle. Gold, the perennial haven, has surged past US$4,300 per ounce, reflecting forces well beyond traditional inflation hedging, while industrial and battery metals have languished in a trough, buffeted by cyclical weakness and transitional disruptions associated with the global energy shift. For portfolio managers, the task is clear: balance the current defensive premium in precious metals with strategic exposure to industrial metals poised to benefit from structural growth in electrification and green infrastructure. Gold’s Ascent Reflects Systemic Risk, Geopolitical Tensions and Monetary Uncertainty, Providing a Counter-Cyclical Revenue Stream for Economies Like Australia Gold’s extraordinary rise in 2025, from US$3,500 to above US$4,300 per ounce, marking the 45th new all-time high this year, points to a structural recalibration of the precious metals market. The rapidity of this demand side move suggests that the metal’s appeal is driven less by marginal shifts in inflation or interest rate expectations and more by systemic concerns, including escalating tensions in the Middle East, persistent U.S. dollar weakness, and speculation over the timing of Federal Reserve rate adjustments. Physically backed ETFs have absorbed 634 tonnes of gold year-to-date, yet holdings remain 2% below 2020 levels, implying that institutional allocations are far from saturated. For Australia, gold has become more than a hedge. Thus, it now functions as a stabilising revenue stream, offsetting declines in traditional bulk exports such as iron ore and LNG and underpinning macroeconomic resilience amid global growth headwinds. Silver’s Dual Role as a Monetary Hedge and Industrial Metal Positions It at the Forefront of the Expected Rotation into Energy Transition-Linked Commodities While silver has benefited from the safe-haven narrative, its industrial applications ensure that it remains structurally supported even in the absence of geopolitical premiums. Year-to-date, silver prices have risen 15.6%, buoyed by demand for solar panels and electric vehicles, which collectively account for several hundred million ounces of incremental annual consumption. Global silver demand, which reached 1,200 million ounces in 2023, is projected to increase by another 200 million ounces by 2025, largely driven by renewable energy infrastructure and EV manufacturing. Its dual exposure positions silver as a potential harbinger of the broader industrial metals rotation expected in 2026, bridging the gap between defensive and growth-oriented allocations. Source: Google Finance (2025) [1] Copper, lithium, and nickel, all central to global electrification, have suffered from price volatility exacerbated by oversupply and geopolitical uncertainty. Yet the long-term fundamentals remain compelling. Conservative capital allocation by major mining houses, focusing on brownfield expansion, incremental optimization, and shareholder returns, limits near-term supply growth, creating the conditions for structural tightening once demand accelerates post-2026. In Australia, government incentives and investment in exploration and processing capacity further strengthen the supply-demand narrative, ensuring that strategically located producers are well-positioned to capture value as electrification mandates continue to drive global demand. Australia’s Economy and Fiscal Position Are Poised to Benefit from Gold and Lithium, Mitigating the Impact of Declining Bulk Commodity Exports Traditional bulk commodity exports are under pressure, with Australian resource and energy exports forecast to fall 10% to A$372 billion in FY25, reflecting softer global growth and lower commodity prices. However, gold is expected to become our nation’s fourth-largest export by value in FY26, behind iron ore, LNG, and metallurgical coal. State royalty forecasts highlight the structural shift: Western Australia’s iron ore royalties are projected to fall from A$8.581 billion in FY25 to A$5.983 billion by FY27, while gold royalties rise from A$739 million to A$952 million, and lithium royalties increase from A$208 million to A$455 million over the same period. This diversification supports fiscal resilience and signals that the economy is adapting to a commodity mix increasingly weighted toward strategic and high-value metals. Mining companies have maintained a disciplined approach, prioritising digital transformation, process automation, and short-cycle brownfield projects over large-scale greenfield investments. While this limits near-term growth in supply, it also ensures a degree of financial prudence that protects shareholders amid uncertainty. The consequence is an implicit structural floor in commodity prices: as industrial demand accelerates in 2026, constrained supply will amplify price upside, particularly for copper, lithium, and battery-grade nickel. The investment approach for 2026 is clear. Gold continues to offer a defensive hedge against geopolitical and monetary risk, while silver provides a bridge into the industrial metals cycle. Strategic exposure to copper, lithium, and battery-grade nickel is critical to capturing structural growth associated with global electrification, renewable energy infrastructure, and EV adoption. Investors who can balance these positions are likely to navigate volatility effectively while capturing upside as the broader commodity cycle transitions from defensive metals to industrial growth. Outlook Summary: Expected Price Movements and Strategic Considerations into 2026 Gold: Sustained high plateau, with potential to test US$4,500/oz if geopolitical tensions remain elevated. Silver: Outperformance likely, leveraging industrial demand alongside safe-haven status. Copper: Structural tightening expected due to constrained capex; thematic exposure to electrification infrastructure offers growth. Lithium: FY26 likely represents a stabilisation point, with prices poised to recover beyond US$1,300/tonne by FY28. Nickel: Oversupply constrains near-term gains, but battery-grade projects position selects producers for long-term upside. Australian Economy: Counter-cyclical gold and lithium revenues mitigate the impact of declining bulk commodities; fiscal resilience strengthened. Portfolio Strategy: Defensive gold exposure complemented by selective industrial metal positions to capture the anticipated 2026 rotation. Identifying Five Strategically Positioned Stocks Poised to Benefit from the Commodity Cycle Now that we have outlined the broader commodity landscape and the structural rotation expected in the commodity markets, we now focus on specific investment opportunities within the Australian equity market. Our attention turns to five ASX-listed mid-cap companies, that have demonstrated robust performance and occupy strategic positions across the gold, silver, copper, lithium, and nickel markets. These companies combine strong operational momentum, exposure to structural commodity trends, and the potential to benefit from both the defensive strength in precious metals and the anticipated industrial metals recovery, making them particularly compelling candidates for inclusion in a diversified, forward-looking portfolio. Source: Investor Pulse, Research (2025) [2] Evolution Mining (ASX: EVN) – Leveraging High-Grade Gold Production Amid Elevated Prices Source: EVN, Weekly chart (2025) Evolution Mining is a high-grade gold producer well-positioned to benefit from elevated gold prices. Recent operational progress includes a marked increase in open-cut production at the Castle Hill pit, which is expected to provide baseload ore for the next 8–10 years. Access to higher-grade underground stopes is expected to enhance gold production and improve unit margins in the coming quarters. Operations such as Mt Rawdon continue to generate positive net mine cash flow even while processing lower-grade stockpiles. Major infrastructure projects, including a new haul road and near-completion of the final tailings’ storage facility, are expected to reduce capital expenditure, supporting higher free cash flow generation. The company’s high-grade profile and stable operational execution enable it to translate elevated gold prices into strong cash flow and sustainable profitability throughout the commodity cycle. Aeris Resources (ASX: AIS) – Diversified Exposure Across Copper, Gold, and Silver Source: AIS, Weekly chart (2025) Aeris Resources operates multiple assets, including Tritton, Cracow, and Stockman, producing copper, gold, and silver. This diversified portfolio allows simultaneous participation in the safe-haven cycle of precious metals and the structural growth in copper driven by energy transition demand. Operational execution across these assets positions the company to benefit from both cyclical and structural commodity trends. Its multi-metal exposure provides resilience and optionality, enabling the capture of value from the broadening commodity cycle and supporting long-term operational stability. Capstone Copper (ASX: CSC) – Positioned for Structural Copper Market Tightening Source: CSC, Weekly chart (2025) Capstone Copper is a mid-tier copper producer with established production volumes and a clear growth trajectory. Strategic investment in the Santo Domingo Project reduces funding risk and validates the project’s tier-one potential, while exploration success at Mantoverde, including higher-than-expected copper grades, strengthens confidence in resource classification and potential reserve conversion. The company’s production growth pipeline aligns with the anticipated structural deficit in copper supply. By combining de-risked projects with strong operational fundamentals, Capstone Copper is well-positioned to capture value from the industrial metals cycle and the critical supply-demand dynamics underpinning global electrification. Nickel Industries (ASX: NIC) – Transitioning to High-Value Battery Chemicals Source: NIC, Weekly chart (2025) Nickel Industries has shifted focus from traditional Nickel Pig Iron production toward high-value battery-grade nickel and cobalt via its Excelsior Nickel Cobalt (ENC) High-Pressure Acid Leach (HPAL) project. The ENC facility, scheduled for staged commissioning, will produce nickel and cobalt sulphates critical for electric vehicle batteries. A strengthened balance sheet following debt refinancing provides stability for completing capital-intensive projects and optimizing cash flow. By aligning production with growing Western demand for secure critical minerals, the company is positioned to capture value in the high-growth battery metals segment while mitigating traditional oversupply risks. Liontown Resources (ASX: LTR) – Leveraged Exposure to Lithium Recovery and Operational Efficiency Source: LTR, Weekly chart (2025) Liontown Resources operates the Kathleen Valley Lithium Operation in Western Australia, transitioning from open pit to fully underground mining, which is expected to lower long-term operating costs and improve efficiency. Operational de-risking, stable ore reserves, and project ramp-up position the company to capture margin expansion as lithium prices recover and global EV adoption accelerates. The project’s secured operational runway and strategic positioning within the lithium supply chain ensure that Liontown is well-placed to benefit from structural growth in critical minerals, supporting sustained operational performance and long-term value creation. Bonus Micro Cap: Gold and Rare Earth Micro Cop Explorer: Verity Resources (ASX: VRL) Source: VRL (2025) The company was formerly known as SI6 Metals Limited, and rebranded to Verity Resources in November 2024. Incorporated in 2007. The registered office is in Nedlands, Western Australia. Verity focusing on precious and “supply-critical” metals including gold, base metals (nickel, copper, cobalt), platinum group elements (PGEs), and rare earth elements (REEs). Verity initiated diamond drilling campaigns at Monument to expand and upgrade gold resources and commenced a pit optimisation study for the Monument project to evaluate potential mining feasibility. Verity’s management believes that only ~10% of a ~20 km BIF (banded iron formation) gold trend at Monument has been systematically drilled, pointing to potential further discoveries. Verity’s Portfolio Snapshot 1) Monument Gold Project (Laverton, WA) - Growth Path Current MRE: 154koz Au (Korong + Waihi) and currently 55k/0z Indicated. Phase 2 (6,400m) is designed to upgrade to Indicated (infill) and test extensions (step-outs) — 77 holes (5 DD + 72 RC) outlined in Sept. Grade/continuity reinforced by Phase 1 intercepts (e.g., 19.4m @ 1.65 g/t; multiple >1 g/t hits). District setting: ~195 km² tenure, along the strike of Genesis Minerals’ 3.3Moz project; only ~10% of ~20 km BIF trend has been systematically drilled. This is important because upgrading ounces to Indicated and demonstrating down-plunge growth are prerequisites for credible scoping studies and development options. 2) Brazil — Pimenta REE (plus Ga/Ti) — New Growth Leg Verity recently announced its auger drill results confirm widespread, near-surface REE in saprolite over granite, consistent with earlier reconnaissance anomalies (Apr 29). The rare earth element Ga–Ti theme has moved from geophysics + reconnaissance to drilling confirmation, elevating Brazil as a second engine alongside Verity’s West Australian Monument Gold Project. 3) Botswana - Cu-Ag & Ni-Cu-PGE — simplified ownership Verity now owns 100% of the copper-silver JV portfolio (Airstrip, Dibete) after acquiring the remaining interest (Oct 13). The district also contains Maibele North (JORC Inferred 2.4Mt @ 0.72% Ni & 0.21% Cu + PGEs + Co + Au) per company ASX materials. The tenements listed above allow for strategic upside and allows investors to observe an explorer that is on the way for interesting The global commodity landscape is entering a pivotal transition that demands strategic balance from investors. Gold’s record-breaking rally underscores its enduring role as a hedge against systemic risk, while silver’s dual nature signals the early stages of a broader industrial metals recovery. At the same time, copper, lithium, and nickel remain essential pillars of the electrification megatrend, with constrained supply setting the stage for significant price re-ratings beyond 2026. For those prepared to navigate this evolving cycle, the opportunity is clear: combine defensive allocations to precious metals with selective exposure to critical industrial commodities. Companies like EVN, AIS, CSC, NIC, and LTR - each uniquely positioned within this shifting landscape - exemplify how disciplined execution and strategic focus can turn macro tailwinds into portfolio outperformance. As the commodity cycle matures, investors who embrace this dual-theme approach are likely to be best positioned to capture both resilience and growth in the next phase of the market. Regards, Mark Elzayed CIO