Orian Resource Partners

Does anyone in the Physical Trading Space know of companies that are similar to Orian Resource partners? They specialize in institutional metals and mining investment strategies in the base and precious metals space and I am particularly interested in how they structure loans to company's in exchange for off-take agreements where their psychical house can then trade the commodity in the spot market. Essentially they are able to structure agreements to obtain a given amounts of ore at an agreed upon percentage below market value. This gives them a strategic advantage compared to other companies. Just curious who else is using this strategy.

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Comments (4)

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Jan 17, 2020 - 7:52am

In precious there are a few companies with a similar model - Silver Wheaton, Franco-Nevada. Although the offtake their is less about trading, more just getting paid back in metal which they then sell.

Lots of physical houses will make investments in mines or smelters in return for offtake or tolling rights.
The large miners (Anglo American, Rio Tinto) have built trading operations in recent years and are purchasing offtakes as well.

The terms can be very advantageous as the investments are made when the assets badly need capital eg. if they have overrun on budget or schedule.

Orion is pretty unique in terms of its exact structure to be fair - private equity and hedge fund combined. Red Kite have done something similar in the past but it doesn't seem like they're around any more.

Jan 17, 2020 - 11:16pm

The basic idea is not particularly unique, the big houses all do this, and usually with more interesting assets to boot. They are an offshoot of Red Kite though so the HF/PE side of it is relatively rare although there are more and more HF financed houses out there (like Castleton).

Jan 18, 2020 - 5:24pm

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