December Report

Critical minerals and gold processing company Metallium was the largest contributor, up 309%, along with AI cardiac CT scan reading company Artrya, up 524%. Brazilian Rare Earths rose 67%, Greatland Gold rose 52% (we sold too early), and pancreatic cancer biotech Amplia rose 68%.

The failure of Opthea’s Phase 3 trials in wet age-related macular degeneration (wet AMD) shaved 7% from returns.

We are excited about the outlook for 2026. Fund positioning remains unchanged, with 50% in healthcare and 45% in critical minerals processing.

We note that the US biotech market recovered sharply in 2025, with a large amount of deal flow now occurring, which is supportive for our small-cap holdings. In addition, many of our fourteen healthcare holdings have significant catalysts in the coming months.

The backdrop for critical minerals continues to be very favourable due to rising geopolitical tensions, Western governments driving reshoring, and strong demand driven by electric vehicle adoption, defence applications, and robotics. Western critical mineral prices have rocketed over the last twelve months due to Chinese export restrictions; however, we expect a major global supply shortage to emerge over the next two to three years, which could represent another leg up in pricing, including in China.

In January, US-China relations deteriorated further following the US capture of Venezuelan dictator Maduro. President Trump has also proposed raising US defence spending by 50% to USD 1.5 trillion in 2027, which would likely be very supportive for the sector.

Our key holdings continue to be IperionX (US low-cost titanium producer), Brazilian Rare Earths (the world’s richest rare earth deposit), and Metallium (a US recycler of various metals, including gold, gallium, and germanium). Gallium is a metal of particular interest given its use in lower-power-consumption semiconductors for AI data centres, lasers for data centres, and, in the near future, 1 MW laser weapons capable of defeating drones, aircraft, and missiles.

It is pleasing to note that the Fund’s largest holding, IperionX, which has highly patented technology to lower the cost of producing titanium products, has risen 45% since the release of a short-seller report in mid-November to the time of writing on 8 January.

Turning to December, AI cardiac CT scan software company Artrya rose 43% after adding two new customers, Northeast Georgia and Cone Health. We expect approval of its final software module, Salix Coronary Flow, in January, as well as further customer additions, to act as catalysts. Artrya has a market value of AUD 730 million, which compares favourably to larger US rival HeartFlow, capitalised at USD 2.8 billion. As discussed in prior monthly reports, Artrya’s offering requires no human intervention, allowing faster turnaround times and better economics for hospitals than HeartFlow. We also note that another Australian medical software company and former holding, 4DMedical, has risen 20× in six months to an AUD 2.8 billion market capitalisation for its lung scan software, which does not use AI, after signing several major US academic hospitals, offering a glimpse of how Artrya may perform upon signing larger deals.

US biotech CalciMedica rose 58% as it approaches a readout of its Phase 2 study in acute kidney injury. With a market capitalisation of just USD 83 million in a potential multi-billion-dollar market, we believe a significant re-rating is possible with positive data. We also note that there has been major M&A activity in kidney disease in recent years.

Australian biotech Immutep rose 38% after signing a regional licensing deal for its lead cancer immunotherapy drug Eftilagimod with Indian pharmaceutical company Dr Reddy’s, covering all countries outside the US, Europe, Japan, and Greater China. The deal includes USD 20 million of upfront cash and USD 349 million of milestone payments (so-called “biobucks”), plus double-digit royalties. The transaction highlights the significant value of the remaining rights in the excluded territories relative to Immutep’s market value of USD 450 million.

It should also be noted that Immutep has been working closely with Merck, which produces the leading immunotherapy drug Keytruda, currently generating approximately USD 35 billion per annum but coming off patent in 2028. We believe it is quite likely that Merck will acquire Immutep, enabling a combination therapy that could potentially extend its franchise until 2041, making it highly valuable.

The company also announced it has recruited 38% of the 756 patients required for its Phase 3 lung cancer study, with a futility analysis expected in Q1 next year and top-line data expected in late 2026, but more likely in 1H 2027. Finally, the company released positive Phase 1 data for IM761 in autoimmune diseases. Autoimmune assets often attract very high valuations even at early stages, and it may be an option for Immutep to monetise this product to help fund the remainder of its lung cancer Phase 3 study. Immutep represents 4.5% of the Fund.

Brazilian Rare Earths fell 9% despite releasing an 85-page scoping study for its Amargosa bauxite project, which showed an NPV of USD 630 million at current spot prices. The project has excellent economics, with a 1.2-year payback due to a low-cost direct-ship strategy using trucks for haulage, generating annual EBITDA of USD 100 million. The project can be significantly expanded in the future using rail.

The current market value of Brazilian Rare Earths is just USD 760 million, with USD 130 million of cash. Effectively, the market is valuing the remainder of the company—namely, the world’s richest rare earth deposit—at zero. We look forward to the scoping study for the rare earth project in mid-2026.