Toro Gold

About the company

Toro Gold is a private gold exploration and development company focused on Africa. The company’s lead project is the Mako Project, situated in Eastern Senegal. Toro Gold completed a pre-feasibility study for the project in May 2014, indicating a robust 1.4 million ounce reserve project development opportunity. A definitive feasibility study is now underway and due for completion during the first half of 2015.

About the investment

RCF is currently the largest shareholder of Toro Gold at approximately 20% ownership and has been involved with the company since its early stages of development, shortly after the Mako Project discovery was made. Toro Gold is RCF’s first investment located in Senegal, which the firm believes is an up and coming African mining jurisdiction because of its quality resources and the country’s willingness towards new investment and building its economy.

Similar to many development projects around the world in recent times, Toro Gold has experienced a challenging market environment through which RCF has provided its ongoing support as the company has progressed its Mako Project through two additional financings post RCF’s initial investment.

Long term patient investor

To assist Toro Gold in completing its pre-feasibility study for the Mako Project, RCF provided a short-term bridge facility which was converted to equity as part of the company’s financing for its feasibility study. This provided a buffer while the study was concluded and allowed additional time to raise funds for its feasibility study. The bridge also provided capital to undertake a drilling program to support the feasibility study that otherwise would have been delayed by the onset of the wet season.

Despite the constraints of the current market, RCF asserts the fundamentally sound nature of Toro Gold’s projects and believes the company has a strong management team that can deliver positive outcomes. RCF’s first-hand industry experience has also helped to appoint appropriately skilled board members to oversee the explorer’s transition to a development company.

Responsible Mining Investment in Africa
Allison Forrest, Responsible Investment Officer

Mining project development across the continent of Africa continues to increase as explorers from around the world compete to discover undeveloped mineral deposits. With this rapid growth comes complex environmental, social and governance (ESG) risks and opportunities that project developers and supporters must identify and manage.

Many mining projects in Africa have positively contributed to local economic growth and sustainable development. However, ESG matters that are not actively managed throughout the life of the project, can affect the success of other critical development activities, especially if governments are ill equipped to properly manage income generated from mineral projects. Other matters such as community health, safety and sustainability, labor, permitting, resource nationalism, corruption, lack of infrastructure, local procurement and impacts on local environments, coupled with scarce natural resources are all major areas of concern for mineral and industrial development in Africa.

RCF is aware of the risks and opportunities associated with mining investment in Africa and applies a specialized approach to understanding the specific ESG matters affecting its investments. RCF’s due diligence process typically includes meeting with community members, government representatives and non-government organizations to get a better understanding of the local ESG concerns that could affect the success of a mining project.

RCF frequently works with experts that possess a deep-understanding of the local dynamics and also references guidance from sources such as the International Finance Corporation, Equator Principles and Australia-Africa Mining Industry Group. Another key component of the due diligence process includes understanding the project team’s capacity for managing on-the-ground ESG matters through examples of proactive stakeholder engagement including programs developed in collaboration with communities and governments to address long-term sustainable development.

RCF believes that failing to consider and actively manage ESG matters can have monumental impacts on a business’ ability to earn and maintain its social license to operate in Africa and all around the world. To help demonstrate transparency regarding its ESG activities, RCF became a signatory to the United Nations-supported Principles for Responsible Investment in 2013.

RCF Website and Firm Insights
James McClements, Managing Partner

On behalf of the RCF team we’re pleased to present a refreshed online presence and a new platform for delivering more regular news and insights from across our firm. We anticipate that this information explains the role of RCF in the mining industry and the upside of private equity for companies at any stage of exploration, development or operations.

I have been RCF’s Managing Partner since co-founding the firm with Henderson Tuten in 1998 after a career as a natural resources sector banker with N.M. Rothschild in Australia and the United States as well as with Standard Chartered Bank. My very early career days were spent working with BHP Limited.

Today RCF is a firm of 77 employees across our four offices. Our head office is located in Denver with additional offices in Perth, Toronto and New York. We are in the process of opening an office in Santiago and we also have an RCF representative based in London.

We have been investing solely in resources companies for almost twenty years and our highly skilled global team is experienced in all areas of mining development, construction and operations. Generally the focus of our firm cycles between fund raising and investing. Right now we are in investment mode, with our sixth fund with capital commitments of $2.04B currently being invested in strengthening resources companies around the world.

In the interest of understanding more about Africa as an investment destination, earlier this year the RCF executive group embarked on an in-depth tour of selected African nations. The purpose was to review the political and resources landscape and to develop an understanding for potential investments in the future. Given that RCF’s investment mandate is not bound by geography or commodity, it served as a timely fact finding mission to gain a more comprehensive understanding of the African story.

For more on African investment:

We look forward to bringing more regular insights into our firm so please continue to visit our website for the latest news and information about RCF.

Conflict-free Tantalum Supported by Global Advanced Metals

What is tantalum?

The chemical element tantalum is most commonly used in developing electronic equipment such as mobile phones, DVD players, video game consoles and computers. Tantalum is found and mined in many parts of Africa, but is frequently linked with the conflict supply from the Democratic Republic of Congo (DRC) where mines are often controlled by rebels who extort the mine owners, impose forced labor conditions on workers and disregard the environment.

Developing a conflict-free supply chain

To help regulate the market for tantalum and support a reliable conflict-free supply chain, Global Advanced Metals (GAM), an Australian-based RCF portfolio company, became an early and strong advocate for an audited tantalum mining, transport and export process in the early 2000’s.

This action led to establishing an industry wide standard audit system called the ‘Conflict Free Smelter’ and the launching of the ‘Electronic Industry Citizenship Coalition’ (EICC), which GAM joined in 2009, to ensure smelters around the world bought only certified conflict-free material. The goals established by a conflict-free industry are to:

  • Ensure mineral trade does not contribute to human suffering; and
  • Ensure ongoing trade with legitimate artisanal miners to promote local economy and community development.

In 2010, GAM became the first smelter operation of any type of metal to be officially declared conflict-free while the results of GAM and many other industry participants’ efforts include:

  • Increased living and safety standards for central African artisanal miners;
  • Fair market price to legitimate miners and traders; and
  • Increased industry supply stability.

GAM has received significant recognition for their contribution from many throughout the supply chain, including an Intel award for enabling achievement of their goal of a “conflict free microprocessor by December 2013” and an award from Intel in July 2014 for leadership in establishing audit processes.

Conflict-free supply chain challenges

A conflict-free tantalum supply chain is still not without its challenges and members of the industry seek to continuously educate their key stakeholders on supply chain facts for a fully informed approach to compliance and improvement. There is also active engagement in Central African countries to help ensure that their miners who are legitimate conflict-free businesses, particularly within the DRC, are still able to receive market prices for their product and help to sustain their communities.

Next steps for conflict-free metals

The industry participants still recognize that there is more to do as they work to extend traceability programs throughout Central Africa, and continuously improve living and working conditions and fair trade opportunities. Industry support, education and stakeholder engagement is an ongoing process but serving to improve the transparency of the tantalum industry. It’s also serving to promote its growing conflict-free reputation among the end users including Intel and Apple who have made public announcements about their ‘conflict free’ sourcing status.