SHARE PUNT OF THE WEEK

WHO IS IT? Keras Resources, formerly known as Ferrex, is mainly a gold miner and explorer focused on Australia, South Africa and western Africa. It also mines for iron ore and manganese, and has more recently entered the cobalt and nickel markets.

WHAT’S THE LATEST? Earlier this month, Keras passed its Australian assets on to a standalone company called Pharmanet to focus on the lithium-ion battery industry’s expansion. Keras has been awarded five exploration licences in Togo, Africa, to mine for cobalt and nickel. These are critical to lithium-ion batteries, which are used in mobile phones, laptops and electric cars. WHO BACKS IT? Keras’s biggest shareholder is managing director David Reeves, 48, a veteran of the mining industry. He owns more than 185.3m shares in the firm,

nearly a 10pc stake. Fellow managing director Russell Lamming, 43, owns a 2.2pc stake.

WHY YOU SHOULD INVEST Keras has been in a long period of decline as a result of its attempts to restructure. It is down 16.3pc so far this year. But the lithium-Ion battery market sounds appealing. With Ebola breaking out in Congo, one of the world’s largest cobalt producers, the commodity price has risen by around 100pc in the past six months. If demand keeps on growing then Keras’s investors could be in for a big payday. …AND WHY YOU SHOULDN’T Commodity stocks are cyclical. Their value fluctuates with the value of the resources they are mining. Whether or not you invest will depend on how comfortable you are with sitting tight during periods of volatility in the hope of a substantial return if you sell at the right time.