A fund controlled by Merk Investments has taken a substantial stake in gold, copper and critical minerals explorer Nexus Minerals (ASX:NXM).
The investment was made through ASA Gold and Precious Metals, which is a closed-end precious metals and mining fund.
The fund’s mandate is that at least 80% of its total investments must be either in precious metals explorers and producers, physical bullion or exchange traded funds.
ASA Gold bought 36 million shares for $2.52 million cash, giving it a 5.96% interest in Nexus.
In March, California-based hedge fund Merk reported that its assets under management now exceed US$2 billion ($3.1 billion) thanks to strong demand for physical gold and precious metals mining companies.
The record high gold prices of recent times has spurred interest, with the price of the safehaven metal sitting at around US$3,140 an ounce at the time of writing.
Merk Chief Investment Officer Axel Merk says the firm believes increased interest in gold and gold miners may be tied to fundamental shifts in the plumbing of global finance, which could threaten the dollar’s reserve currency status.
“As capital markets adjust to these dynamics, investors appear to seek exposure to gold not just as a hedge, but as a strategic asset,” he says.
Nexus has a portfolio of gold projects in Western Australia, gold-copper and critical minerals in New South Wales and porphyry copper-gold in Victoria.
The junior explorer, which has a market capitalisation of $44.1 million, in late April locked in firm commitments for an $8.1 million institutional placement to accelerate drilling at its Wallbrook Gold Project in Western Australia.
The additional funds boosted Nexus’ cash balance to over $12 million.
Prior drilling at the Wallbrook Project returned “high-grade” near-surface gold and unearthed two new discoveries.
Write to Angela East at Mining.com.au
Images: Nexus Minerals
