Mining Private Equity Firms

Tedypendah's picture
Rank: Orangutan | 336

Does anyone know any mining Private Equity firms? And what's the value proposition like? IRR, MoM? Looks like a well-diversified portfolio can sell high: Coal, Diamonds, Gold, Venture, Growth etc?

Comments (18)

Best Response
Aug 7, 2017

To name a few:
Resource Capital (Denver)
Sentient Global Resources
Orion Resource Partners (New York)
Waterton (Toronto)
Tembo Capital (London)
Greenstone Resources (London)
Appian (London)
Denham (Boston)
Lime Rock (Westport, CT)

Returns on Funds: YYYY | Net IRR | Net Multiple
Resource Capital Fund III: 2003 | 22% | 1.99x
Resource Capital Fund IV: 2006 | 21% | 1.94x
Resource Capital Fund V: 2009 | n/a | 0.78x
Resource Capital Fund VI: 2013 | n/a | 1.20x
Waterton Precious Metals Fund II: 2013 | 13.3% | 1.25x
Tembo Capital Mining Fund: 2014 | 5.4% | 1.03x

Numbers are slightly tweaked, but this should give you an impression on performance for the industry. Also note these aren't fully deployed fund figures.

I quickly ran through your last few topic discussions and I had a few questions or comments.

Why not raise money in London/Europe as opposed to the U.S.? I only say this since London is largely the mining sector's go-to hub for capital. There are a lot of good natural resource PE firms in the U.S. but most are in Denver or are energy-related. Also mining PE is having a difficult rap right now, many LPs feed capital into listed-mining ventures which are able to operate pretty lean and are run similar to a PE firm.

Aug 7, 2017

Our PE firm will be listed on an exchange as a Special Purpose Acquisition Company (SPAC) or a mining Investment Company. I think London may do...do you contacts? Most companies operating in Botswana are from London and we also work with BMI research from London.

Are you assuming a 5 year holding period for the MoM figures?

I know RCF, I have chatted to them but they didn't show much interest.

Aug 7, 2017

I should of clarified, MoM figures are to date, so funds that haven't been fully deployed are distributed back to investors could have a higher MoM than currently realized.

Aug 7, 2017

A number of the questions you've been asking are good questions that many managers ask their investment bankers/private fund advisors to advise them on. Therefore I don't think you'll find the answers you want or need on WSO.

Questions like what investment vehicle to use, what investors to target, and share issuance and price are difficult questions to answer in their own right and involve teams of people (bankers, advisors, consultants, lawyers, etc.) just to get it right.

WSO is loosely targeted toward early careers and very high-level Q&A. While there are very experienced and good investment bankers and PE guys on the site, they can only help so much with the limited information they have to go off of here.

If I were you I would network hard with the guys in South Africa and Botswana first and get their thoughts on the topic. I think what you are skipping over is that South Africa has the world's leading minds on mining and finance. I am a little bit biased on South Africa here but do not underestimate the network around you. All the major banks have offices in Johannesburg with deal teams that deal with natural resources on a daily basis. Even if you could get some time with a consultant or two that could be beneficial to your end goal.

The guys on the ground in South Africa, will have a better idea than any whether your venture is feasible. Also on a side note, the institutional LPs in London and the U.S. will make reference calls to the same guys in South Africa if they are seriously considering investing in your project or not. Just some things to think about.

I only bring up London as possibly an easier pool of capital since investors will have better ties and better knowledge on Botswana than their U.S. counterparts. Plus, if you're going to U.S. retail investors there is a good chance they will ask you what the effect of Ebola and Boka Haram are to your business. These are probably questions you don't want to have answered when you have bigger concerns to be worried about like lower commodity prices, foreign exchange risks, and ESG issues.

Aug 7, 2017

Thanks a lot for your detailed responses. I have built a network...but I agree that I could do more. I have engaged SRK consulting who advise me regularly on he mining side, but not as much on the deal side. I will definitely reach out more here!

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Aug 8, 2017

Hey, interned at an oil & gas PE firm-- among the most valuable members was a guy who was an O&G engineer for ~6,7 years, knew the field very well and had made valuable connections during that time, then went to business school. The firm had 2-3 people like that, and truly, they were held in very high esteem.

If it's about switching over, I guess that's what happens. I guess you also gotta make sure to meet the right people during business school and if you don't, make sure to network the hell out of every possible fund. I found that in the end, it's a lot of project management, and all the engineers and stuff tend to be exposed to that, and it's not that bad. Just know what you are talking about. For undergrad, I know some banks like Tudor Pickering take geologists and engineers right off from school.

Aug 8, 2017

That is very helpful. Thanks a bunch! It is reassuring to know that...I will be taking as many Econ classes as I can, haha.

In other news - bump. Any other thoughts, anyone?

Oct 30, 2018

This is a long time ago but as a newcomer to the USA, I was previously working in the mining finance world in London including running investment conferences. Please let me know if this is still current? Mining doesn't tend to move very fast in this market!

Oct 31, 2018

I work for a Luxembourg-based mining-focused investment fund (not really a traditional PE, more of a family office structure). Would be glad to chat with you!

Oct 30, 2018

I have a very good connection in Luxembourg that I can introduce you to or you may already know. See www.MMG.capital/team/ - I'm on there as well. Can you let me know what your key investment criteria are: Stage in project life cycle?; metal or mineral?; geography?; public or private? Any other factors that I should consider. I'm specialising in US/Canadian Mining Companies with European or African projects.

Jun 17, 2019

Hi Max 1,

Do you have an email that I can email you at about a mining deal?

Jun 17, 2019

Hi, I am working on a deal for iron. Would you be available to chat?

Oct 31, 2018

Hey, I'm in mining. I work for a fund and incubated several exploration companies. What were you looking for? Deal flow? Project financing?

Oct 30, 2018

Can you let me know what your key investment criteria are: Stage in project life cycle?; metal or mineral?; geography?; public or private? Any other factors that I should consider. I'm specialising in US/Canadian Mining Companies with European or African projects at the early stages - I do also look at the Americas but try and keep to the USA and South America selectively. I have a number of companies at the moment that I'm really excited about in Africa; the USA and Colombia.

Nov 20, 2018

I have an American company with early stage African projects in Coltan, Rough Diamond and Gold. Where can I send our criteria ?

Jun 17, 2019
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