Exploring for New Mining Investments

By Peter Nicholson, Partner, Resource Capital Funds
October 31, 2018

For a private equity fund focused solely on minerals and mining investment opportunities, global exploration spend and where it is occurring is an important indicator of the level of activity in the sector, and the appetite for development capital.

Exploration is generally associated with minerals discovery. However, exploration features extensively in the mine development process where discoveries are proved up, derisked and progressed to a bankable stage. This includes defining Ore Resources, Ore Reserves and various levels of studies. For junior and mid-size companies, development capital ahead of a bankable project can be difficult or expensive to source from listed equity markets. This provides an opportunity for more flexible funding options such as private equity, that actively participate throughout the project development process.

Pete 1

Figure 1: Global Exploration Spend
Source: S&P Global Market Intelligence, 2018

A boom-bust sector

Contributing to the project funding challenges for emerging resources companies is the highly cyclical nature of the mining industry. Lags between demand changes and production supply responses are common and usually unavoidable, contributing to significant fluctuations in global commodity prices, mining capex, and the availability and cost of development capital. This cyclicality is clearly evident in Figure 1, which shows global annual exploration spending over the last 20 years. Spending on exploration peaked in 2012 at around $20.5B after a decade of China fuelled growth during the mining boom, only briefly interrupted by the Global Financial Crisis in 2008. The subsequent cyclical decline was comparatively rapid and severe as record minerals production was brought online. Exploration spend declined by two thirds in the four years following the mining boom peak, reaching a post boom low of $6.9B in 2016. It is not until 2017 that exploration spending showed signs of recovery.

Pete 2

Figure 2: Global Exploration Spending by Region
Source: S&P Global Market Intelligence, 2018

Following the money trail

While the boom-bust cycle in exploration spend has been equally prevalent across the globe, the regional distribution of exploration activity has diverged. There has been a marked change in exploration focus towards Latin America and away from more established mining regions including Australia and Canada. Latin America has generally attracted the largest share of global exploration spending throughout the cycle, accounting for an average of around 25% of spend (figure 2). The last decade has seen a clear increase in exploration focus on the region with shares of spending increasing from a low of 21.8% in 2007 to a high of 30.0% in 2017. In the same period Canada’s share has declined from around 21% to below 15%, while South East Asia, Australia and the USA have remained relatively steady at around 4%, 12%, and 8%, respectively.

The move away from grass roots Exploration can be divided into three broad types:

  • Grassroots – searching for new mineral resources.
  • Late Stage & Feasibility – evaluating discovered resources to convert to reserves, and to determine the feasibility of development.
  • Mine site – extend mine life and identify nearby targets to maintain infrastructure utilisation.

Pete 3

Figure 3: Global Exploration Spending by Type
Source: S&P Global Market Intelligence, 2018

Analyzing global spending by type also indicates a change in focus over the last two decades. Figure 3 shows that in 1997 more than 50% of global spending was on grassroots exploration. As the quantum of exploration spending has grown, more of this has occurred during project development and mine site operations. In fact, project development and mine site exploration combined accounted for more than 70% of global exploration spending in 2017.

“Project development and mine site exploration combined accounted for more than 70% of global exploration spending in 2017.”

Size does matter in a cyclical sector Cyclicality in the mining sector has a direct effect on access to capital. Smaller companies generally have fewer funding alternatives available to them than their larger counterparts, and consequently have less capital to deploy in cyclical downturns. This is illustrated in figure 4, where intermediate size companies have accounted for a relatively stable share of global exploration spend across the cycle, while the relative share of spend for juniors and majors has exhibited considerable volatility. Expansionary periods in the mining cycle have provided easier access to capital for juniors, which in turn has driven significant increases in exploration spend relative to majors. As capital availability tightens in contractionary periods, exploration by juniors all but ceases, with the dominant exploration spend related to longer term development projects, or mine site activities by majors.

Pete 4

Figure 4: Global Exploration Spend by Entity Type
Source: S&P Global Market Intelligence, 2018′

Conclusion – the right time to explore for new mining investments

What do these observations around global exploration spend mean for investors looking to participate in minerals and mining growth? An increase in global exploration spend in 2017, after a four year decline, indicates an increase in capital expenditure on minerals projects, and therefore demand for investment capital. More importantly, the increasing focus on late stage and feasibility related exploration suggests the time is right for investors looking to participate in minerals project development, particularly in the Latin America region, and on smaller companies as the cycle improves. With offices in the USA, Australia, Canada, and now Chile, RCF is well positioned to participate as a strategic capital partner in the development of new mining projects across globe.


Alufer Mining reaches 3-million man-hours without a Lost Time Injury

Alufer Mining reaches 3-million man-hours without a Lost Time Injury  

Alufer Mining Ltd marked a significant safety record, achieving 3-million man-hours without a Lost Time Injury (LTI) on its Bel Air bauxite project in Guinea. No LTI has occurred since construction activities commenced on site in January 2017.

Resource Capital Fund VI L.P. has been a strategic partner to Alufer since 2015, with RCF Senior Associate, James Rattenbury and RCF Senior Project Director, Allan Brownrigg proud to present an RCF Safety Recognition to Alufer and its contractors at a safety meeting.

“This was the first time we have ever seen such a creative and enthusiastic safety message put together by workers which included a live demonstration complete with a safety cheer squad,” RCF’s James Rattenbury commented. “The demonstration dealt with several safety hazards and since it was presented in a visual form it resonated and was retained by the many people from Alufer and its four contractors – with a total of about 600 people in attendance,” he added.


Caption: (from left) James Rattenbury, RCF Senior Associate, Allan Brownrigg, RCF Senior Project Director, Phillip Nell, Bel Air Mining Acting H&S Manager, Gawie van der Westhuizen, DRA Construction Manager and Enna Borman, DRA HSE Manager

The no-LTI achievement is a challenging feat in any developed country let alone at Bel Air given the diverse workforce of the project with 1,400 employees, of whom over 660 are from “Impacted Villages”, 540 are from Guinea, and 261 foreign expats. Three different languages are spoken on site, including French, English and the local Susu dialect. The safety culture put in place is commendable, and recognizing this achievement reinforces the benefits of continued emphasis on safety.

Allan Brownrigg said: “Having attained 3-million man-hours without an LTI is very impressive at any job, but when you consider that this was achieved in a remote location with people on site speaking different languages and with diverse experience in construction, it is truly an amazing accomplishment. This is something of which all the staff at Alufer should be extremely proud.”

Good housekeeping and observance of safety signing were evident throughout Alufer’s major project work sites – a 28 km haul road from the future mine pits to the port; the stockpile/export facility; and the ore load-out causeway (photo below). Alufer’s Bel Air bauxite project remains on schedule and on budget to date, with first ore expected to be shipped in August 2018.

Alufer 2

Caption: Ore load-out causeway

RCF sponsored Schulich International Case Competition

RCF were the proud sponsors of the Schulich International Case Competition (SICC) held in Toronto on March 3, 2018. RCF has been a long-time supporter of the case competition which focuses on mining and sustainability. This year’s case focused on how mining projects, which operate in politically unstable countries, should manage corruption and equitable wealth distribution.

RCF offers scholarships at Schulich School of Business, The University of Western Australia Business School (UWA) and Colorado School of Mines (CSM), of which each school had a team participate in SICC. The CSM and UWA teams were mentored by RCF for the competition and both teams did a fantastic job. CSM were awarded first prize and UWA awarded third prize – therefore a great achievement overall.

The quality of presentations was extremely high and the CSM team, which included RCF intern Phillip Ruban, and past RCF intern, Alex Campbell, prevailed with a comprehensive case that demonstrated a solid understanding of the key issues at hand.

SICC provides students with the opportunity to discuss real-life business challenges, bringing together a collection of innovative and pragmatic solutions. The case competition also provides RCF with an opportunity to demonstrate its ongoing interest and commitment to education, especially as it relates to the importance of sustainability in mining. As a Gold Sponsor, RCF features prominently in the marketing of the event and remains the only investment firm that supports the competition.

RCF Partner and Managing Director Canada, David Thomas, said “The competition is a recognition of the importance of supporting the next generation of mining leaders, as well as the ever-increasing need to incorporate innovative thinking into sustainability and mining. Understanding how to allocate capital to a wide range of initiatives will ensure sustainability today and well into the future”, he said.

“RCF has been supportive of this event for several years, both as a sponsor and as judges for the event, comprised of Allison Forrest, Jessie Liu-Ernsting and myself. The format this year was modified in such a way that there was only one judging round and a smaller number of teams, providing greater interaction between the teams and the 15 judges through an extended Q&A period”, David added.

“RCF is proud of the fantastic work from all of the teams. This is a unique competition which allows students from around the world to display their innovation and talent and apply their knowledge to real-life challenges occurring in the mining industry”, he concluded.

The CSM 2018 team was called ‘Ubia Madini’, meaning Mining Partnership in Swahili, and comprised Phillip Ruban (captain), Alex Campbell, Marko Visnjic and Emilio Castillo. UWA, the defending champion, were third-place finishers this year, behind a strong performance from the University of Toronto. The team from UWA comprised Bindi Shah, Scott Robertson, Rebecca Shanahan and Henry Bromfield.

Teams included representatives from schools such as UWA, CSM, University of Toronto, York University, and Simon Fraser University from Vancouver, BC.

The annual Schulich International Case Competition is organised by the MBA students at Canada’s York University and coincides with the start of the Prospectors & Developers Association of Canada held every March in Toronto.


Above Photo Caption: UWA team (from left) Henry Bromfield, Bindi Shah, Rebecca Shanahan and Scott Robertson

Cover Photo Caption: CSM team (from left) Emilio Castillo, Marko Visnjic, Alex Campbell and Phillip Ruban

Interview with RCF Partner and General Counsel, Cassie Boggs

Cassie Boggs is the General Counsel at RCF. Cassie joined in January 2011 and is responsible for all legal matters involving RCF and all of its funds.

I joined RCF, succeeding its first General Counsel, Brian Dolan, to manage all the legal matters related to the management company and all of our funds. I am the head of the legal department which comprises eight people: five in Denver and three in Perth. In Denver, we have a Staff Counsel, the Chief Compliance Officer, a Compliance Analyst, an Executive Assistant for the whole group, and myself. In Perth, we have two senior lawyers who act as Legal Counsel, Australia, in addition to a EA/legal assistant.

As RCF is a Registered Investment Advisor, it is governed by US securities laws. Therefore, RCF needs a compliance function, and this is a function that continues to grow.

The Staff Counsel, Matt Thompson, and I predominately work with the deal teams out of North & South America, while investment work for deals generated out of our Australian office is the responsibility of the Australian Legal Counsel. As lawyers, we are involved in all of RCF’s investment deals, including assisting with legal and country due diligence, documenting the deals, and negotiations when required.

We have worked on a number of large deals, and a big part of my job has both a legal and business component to it.  In addition, the legal group assists the finance, tax, HR and the COO on a variety of matters affecting the management company.

Cassie has a specific focus on country due diligence, political risk and corruption risks. She works hand in hand with the investment teams in these areas.

In addition to assisting the investment teams with legal due diligence, I also assess and assist in managing political and corruption risks, in part because of my background.  I lived and practised law in a variety of jurisdictions, including Kazakhstan, Pakistan, Indonesia, London and Tanzania, so I have had practical experience in those and surrounding countries in identifying and assessing the types of risks that have the potential to impact our funds’ investments and RCF’s reputation.

Cassie was previously an international partner at the law firm of Baker & McKenzie, where she worked in the firm’s San Francisco, Almaty, Kazakhstan, and Chicago offices. She travelled extensively for work as her professional career has had a specific focus on the global natural resources sector.

Over the last 35 years, I have had the opportunity to work on a lot of natural resources related transactions all over the world, which has been a great job for a girl from Aurora, Colorado who thought her law practice was going to be focused only on the American West. I am a fifth-generation Coloradoan, and since Colorado has a long history of mining, it was very natural for me to start working within the natural resources space with a particular interest in mining. I was a partner at Sherman & Howard in Denver where I began my career before moving to Baker McKenzie, an international law firm with offices all over the world. The company asked me to assist with the opening of its office in Almaty, Kazakhstan in 1994, since much of the anticipated work would be for mining and oil and gas clients. From Kazakhstan, I then worked in Indonesia. Both Indonesia and Kazakhstan were big mining jurisdictions.

During my time at the firm, I learned a lot about different legal systems outside of North America, where the majority of business is done by the relationships people have as there is often no independent judicial system that people trust and the words in a contract are not necessarily always upheld. Therefore, my experience taught me a great lesson in understanding how people do business around the world.

After Baker & McKenzie, in 2005 Cassie joined Barrick Gold Corporation, moving from a lawyer role to a business role.

After Baker & McKenzie, I joined Barrick Gold as Vice President, Corporate Development, where I moved from a legal role to a business role. I was brought into their Corporate Development group to facilitate transactions, but my work expanded to assisting in the management of acquisitions and certain of the company’s assets.

When I was at Barrick Gold, we took over Placer Dome, and that’s when the firm became the largest gold company in the world. This was a huge transaction and a fascinating one.

I was also involved in negotiating agreements with the Government of Pakistan, and at one point, I was the CEO of our Pakistan Joint Venture, trying to develop a mining project, so I spent a year in Pakistan, living in Islamabad.

Back then, Barrick Gold was winding up its African assets to list them into a separate company. So for a period of time, I was the regional head of the African business unit, and from there I helped put together the listing of what became African Barrick Gold, now Acacia Mining. After that, I was its first General Counsel before I moved to Toronto, and then subsequently back to Denver.

Cassie joined RCF after having spent many years abroad, and the firm has grown significantly since she first joined.

My encounter with RCF was through Brian Dolan who was the previous General Counsel, and who introduced me to James McClements.

I was attracted to the firm as I saw private equity as a very interesting sphere. Private equity has transformed the resources sector by offering a new opportunity to raise capital in a different way than offered by banks.

RCF has more than doubled in size since I joined the firm. When I started, there were approximately 20 people in the Denver office and less than 50 people worldwide, while now there are over 50 in North America and more than 90 globally. Since I came on board, we have added an office in Santiago, and an office opened just before I joined in Toronto. So, in a relatively short space of time, RCF went from having three offices to five.

After many years abroad, Cassie was keen to get back to Denver.

Working at RCF was a chance for me to also come back to Denver after almost 20 years, which is where I am originally from.

I am a skier and an outdoor person, I love Denver’s weather, it has four seasons. The city is the right size, and it’s where I grew up. I’ve lived in a lot of great places, so when I thought of the place where I wanted to settle, Denver was home.

Cassie has an undergraduate degree (Economics) and a law degree from the University of Denver and a Masters degree in Resource Development from Michigan State University. Cassie is also a recipient of the prestigious Thompson G. Marsh Award from the University of Denver.

In the United States, you have to gain a four-year university degree before going into law. Afterwards, it’s three years of law school. My undergraduate degree was in Economics.

In November of last year, I was awarded the Thompson G.Marsh Award from the University of Denver. This was a great honor as it recognizes a law school graduate for their accomplishments. I am proud to be the first woman to receive this recognition.

Women in leadership positions

When I started practising law, 50% of the people I went to law school with were women. Not all of those people become partners in law firms, and there is a much smaller percentage of women who become partners in law firms. Certainly, in the mining and natural resources industry, you don’t come across as many women as you would in other fields. By the same token, when I practised in Indonesia most of the law firms were run by Indonesian women. While even Pakistan, which doesn’t have a society where women are at the forefront, appointed a woman Prime Minister earlier than many other countries in the world did. You don’t see as many women in the mining field, but personally, this has created a lot of opportunities for me.

Interview with RCF Partner and Investment Team Leader, Mason Hills

Mason Hills is a Partner and Investment Team Leader at RCF. Mason is originally from Perth, Western Australia, and started his career in law

I studied economics at the University of Western Australia before going on to do a graduate law degree at Murdoch University.

After graduating, I went to work for a commercial law firm focused on practicing in corporate and securities law, and project financing, in the resources sector. While I was there, I spent a year working at the Federal Court of Australia as an associate to a Judge. When I returned from working with the Judge, I continued my career in the project finance section of the law firm until 1999.

In 1999, myself and one of the partners of the law firm at the time, decided to start our own practice with a focus on project finance, and we acted predominantly for borrowers and smaller lenders.

Mason has advised RCF since 1999 and joined in an in-house capacity in 2006

In 1999, a year after RCF’s founding and the launch of its first fund, RCF I, the organization was actively pursuing investments in Australia. I already had a relationship with some of the principals of RCF from my previous firm, so when they required legal work in Australia, it was a natural fit. So from 1999 until 2006, I worked as outside counsel for RCF.

In 2006, I joined RCF as their in-house lawyer in Australia. While my role was primarily legal work, my prior business relationships and established contacts in the Australian mining industry started to approach me about potential investment deals RCF could become involved with, and I found myself actively involved in leading transactions rather than doing pure legal work.

I was fortunate to be made a partner in 2009, and my focus changed dramatically from legal work to managing investments and the investment process.

Mason works on a number of deals and looks at 2-3 new opportunities on a weekly basis for RCF

As an investment team leader, I am generally responsible for 4-5 material transactions and a number of smaller transaction deals in my portfolio that I manage with my team on a day to day basis. They are the core transactions we work on. At present within those core transactions, there are two projects which have required greater team bandwidth just due to the size and complexity of them, and the work load required.

In my team we have four people – two Canadians, a Kiwi (New Zealander) and me, an Australian – all working out of the Denver office.

Regarding new projects, as a team, we look at and evaluate roughly two to three new opportunities on a weekly basis.

Mason has travelled extensively in order to oversee deal projects

There is a large amount of travelling involved with my role. I would estimate I travel around four to five months of the year. I do go back to Perth two to three times a year as RCF has an office there, and this works out well as I still have a lot of family in Perth. I also spend a fair amount of time in London, especially due to the fact that the Alufer Mining Bel Air project, a project I am currently working on, has its management team based there.

In 2012 Mason moved to the RCF office in Denver, Colorado, together with his family

In 2012, RCF thought it would be a good idea if I spent a couple of years in Denver. I moved over with my kids and enrolled them in school over here, and luckily they love it!

The lifestyle and the environment are great, and it is a good place to live. My kids enjoy their school, and my eldest daughter has just started college at Colorado University Boulder. Recently, there has been a large migration of people moving to Denver, and the city has significantly expanded. A lot of people move to Denver for the lifestyle, for the mountains, skiing and the hiking during the summer. The present intention for us is definitely to stay here.

Being involved in mining means I am often involved in a new project in an undeveloped region.  New developments touch many aspects of the communities nearby – and often provide better quality infrastructure for them (like roads, education and healthcare) – and sometimes in ways that can’t be measured with economic statistics.  I find it very rewarding being part of that process – and I take a deep interest in assisting the local communities that our projects impact.




Jeff Mills, Global Head of Investor Relations at RCF

Interview with RCF Managing Director, Global Head of Investor Relations, Jeff Mills

Jeff Mills is a Managing Director at RCF and Global Head of Investor Relations. Jeff joined in May 2016 and is responsible for managing the communication with all of RCF’s investors.

I knew RCF to be a leading firm in the private equity space through a number of different limited partner relationships; and when I learned about the company’s desire to have its first Investor Relations professional, I jumped at the opportunity. I had previously worked in a number of third party and in-house marketing roles, and the thought of building up an Investor Relations group in a formalised fashion, was what attracted me to join and to take on the role.

Jeff’s day to day role involves interacting with more than 100 investors from different geographies, with the majority based in North America, some in Europe and in Asia.

I am responsible for all client interactions between RCF and its investors. The conversations held with investors cover a variety of topics including RCF’s current portfolio and understanding the information needs of our investors. The ultimate goal is helping our limited partners by making their interactions with RCF efficient and informative.

My expertise is in private equity investor relations and although I wasn’t that familiar with the mining industry before joining RCF, I must say that I have found it an invigorating challenge to be working with the team here. The resources industry has a key role in the economy and in the world more broadly and the expression “It’s either mined or grown” is very accurate. Every single day we are using something that has been mined. This is probably intuitive for someone in Australia, where we have our Perth office, but it’s not necessarily so to someone based in North America.

With the new role in place at RCF, Investor Relations has a more centralized function now.

Before I joined RCF, the Investor Relations role was primarily managed by James McClements, Ross Bhappu and other colleagues. It was a shared function across a number of people and RCF wisely decided that they needed a person to handle this on a regular basis and in a more formulaic manner. By creating this role for me, RCF now has a centralized function and I like to think that I have brought some fresh ideas on how to interact with investors.

Jeff has travelled extensively during the last eight months in order to meet with a broad number of RCF’s Limited Partners.

During the last eight months I have been travelling to meet with our investors and to better understand how we can work with them and help answer all their questions and needs. I have been working on a number of really interesting projects over the last year and engaging with all our investors, taking the opportunity to share the RCF story and explaining how we are working to source portfolio companies and create value for them. As we are private equity focused, the commitment from investors is over a number of years and not just a short term investment opportunity. All of our investors are here for the medium to long term which we believe makes us a more attractive source of capital. Given the term of commitment from our investors, open and frequent engagement and communication is key.

In terms of other mining private equity funds, there are only a handful.

There definitely aren’t many private equity firms that specialize in mining, especially relative to more traditional PE firms. I expect that this will change overtime as funds that specialize in mining become more common practice. However, this shows that there is an opportunity to help with educational engagements with the investor community explaining what mining focused private equity is, how we do it and why it works for portfolio companies.

The people and the technical expertise is what sets RCF apart

Since joining, what was immediately clear from the start was the great group of people at RCF. Everyone has a very positive attitude, wanting to help grow and develop the portfolio companies. As a new member of the team, I was immediately drawn towards the open, collegial environment and the culture here.

In my view people make a significant difference in a business, especially in both mining and private equity. The team at RCF has the right perspective about working hard and keeping key stakeholders needs at the forefront of their mind. This is the biggest differentiator across the board of any organization.

It’s also great to see colleagues who are really passionate about what they do. My colleagues are specialists, many are engineers, geologists, metallurgists or other mining specialists; they are experts by nature, in fact some are so passionate about mining they not only do it as a job but also in their spare time as a hobby. There are many people in the firm who work Monday to Friday and then spend their Saturday and Sunday looking for new projects and checking out different rock samples. Mining is a genuine passion here.

Prior to joining RCF in May 2016, Jeff held positions in fundraising and client services at various private equity firms.

I had been working in a role similar to this one for the last 15 years. I have worked with groups that started from investment banks to third party marketing firms. I was recently the Managing Director at Brooklands Capital Strategies, a division of TPG and Ares Management. Prior to that, I was the Head of Investor Relations and Marketing at Oak Hill Capital, and I started in the industry at global investment bank Probitas Partners.

I have worked in a variety of functions doing both primary, secondary and structured transactions, portfolio updates and client services, and I now have the chance to transfer some of this knowledge gained into my current role.

Jeff holds a B.S. degree in Mathematical Economics from the United States Military Academy at West Point and an M.B.A from the University of Chicago, Booth School of Business. After graduating from the United States Military Academy, he served in the United States Army as an aviation officer.

The Army is, of course, somewhat different from private equity but there are so many similarities to Investor Relations. Investor Relations is very much about clear communication, being disciplined and organised and always putting others’ needs ahead of yours. Many of these skills are very common in the army and they are certainly well suited in Investor Relations.

Jeff has lived in various cities and met his wife during his time in the army. They now have two kids and are based temporarily in San Francisco.

I am from Western Pennsylvania, north of Pittsburgh. I was raised there and then went to university in New York. I then spent seven years in the US army and was stationed in New York, Alabama, South Korea, Colorado, Arizona and then Kentucky and Tennessee. While stationed in Colorado I met my wife — that’s our family connection to Colorado outside of RCF’s Denver office.

I have two sons who keep me very busy, one is 13 and the other one is 10. We spend a lot of time together, supporting them in their sports and hobbies, which is what I really enjoy doing in my spare time.

Interview with RCF Managing Director Canada, Dave Thomas

Dave Thomas is a Partner and Managing Director of RCF’s Toronto office. He joined RCF in 2010 and was tasked with establishing the office and building RCF’s in-country presence.

Toronto is considered one of the key global mining finance hubs. On the heels of closing RCF V, RCF’s senior management believed that the timing was right to establish a Canadian branch head and that it made sense to hit the ground running by hiring someone with a deep understanding of the local market and with an established network within the mining industry. I was at a point in my career where, after spending the previous 16 years in investment banking, the idea of acting more as an owner of investments rather than as a middle man, connecting buyers with sellers, was an attractive proposition.

After coming on board in 2010, I was tasked with setting up an office in Toronto. Sourcing space in a new building that was a bare concrete shell in an area that was considered, literally, “on the wrong side of the tracks”, I worked with the architect and designers to come up with a modern space that would suit our needs for the coming years. From touring the furniture factory, purchasing and hanging artwork and buying the coffee maker, I got us up and running in under four months. It was great fun!   Fast forward to today and we have just expanded our square footage by half and added a fourth person to the office. We are also a “home away from home” for the many RCF people who visit Toronto regularly to meet with mining company management teams, attend board meetings or participate in conferences. Having a comfortable work space while in Toronto is important for our team, given how much time we collectively spend on the road each year.


Dave started out as an exploration geologist working in northern Canada. When the opportunity presented itself, he moved into the mining investment world and pursued a career as an equities analyst and subsequently in institutional sales.

In keeping with a common RCF theme, my background is on the technical side of the mining industry. I actually got my start as a field assistant in a remote corner of northern Ontario when I was still in high school. This experience of spending the summer outdoors as part of a team confirmed my desire to pursue undergraduate and graduate geology degrees followed by a career in mineral exploration.

Following 10 years of gold, copper and zinc exploration in northern Canada, I was offered an opportunity to move to the investment side of the mining industry, working as a geologist for a Vancouver, BC-based investment bank. Although I was hired for my ability to interpret exploration results, I was fascinated by valuation and investment evaluation, which led me to a career as a gold analyst. Over the next seven years I covered a variety of large and small Canadian gold companies which involved numerous visits to projects around the world. I then transitioned into institutional equity sales, culminating with a specialty mining sales role at one of Canada’s bank-owned investment dealers.

When RCF contacted me, I possessed only a rudimentary understanding of private equity, as most of my clients were mutual, pension and hedge funds. However, I was intrigued by the role on offer because it enabled me to get back to my technical “roots” in a manner that wasn’t possible in my sales role. I was attracted to RCF’s “patient capital” approach to investing whereby short-term market fluctuations are less important than longer-term trends. I was also impressed by the wealth of mining experience at RCF, the overt professionalism and the deep commercial knowledge within the organization. Combined with the attraction of being an owner of investments rather than an intermediary, I graciously accepted RCF’s offer to join the team.


RCF Toronto plays an important role in deal generation and deal making within RCF

 Working with my colleague Philip du Toit, the main goal of our two-person hunting team is to originate opportunities that fit within RCF’s investment mandates. We do this through our extensive network of mining, investment banking and consulting contacts, participating in conferences, and running screens on various data sources. Once we’ve identified an opportunity, we will conduct a “red flag” analysis and determine potential investment returns. Satisfied that the opportunity is suitable, we socialize the idea internally, resulting in allocation to the appropriate investment team. Although we stay involved throughout the due diligence process, detailed work that may involve utilizing the internal resources of our Technical Services team and possibly that of outside consultants is managed by the Investment Team, freeing us up to look for the next opportunity.

Leon Binedell is also based out of the Toronto office and engages with management and finance professionals at our portfolio companies globally. His role is to help build and support high quality business processes within our portfolio companies.


RCF was the first mining private equity fund to open in Toronto

 Despite Toronto’s importance in mining finance, besides RCF there is only one other mining private equity fund with an office here. I find this a bit odd, given the number of mining companies based in Toronto as well as the number of companies headquartered elsewhere which pass through Toronto, scouring the globe for capital. The city’s mining ecosystem is immense and an important part of the business landscape. A multitude of engineering, legal and accounting firms rely heavily on our industry as a significant revenue source. The large pool of qualified mining and investment professionals adds to the attraction.  Yet, the bulk of mining private equity funds are based elsewhere, including New York, London and Sydney, close to their investors.  I suspect that as the mining private equity sector grows and matures, other firms with establish offices in Toronto but by then RCF will have had a significant head start!


RCF is committed to investing in Canada

By opening a Toronto office, RCF signalled its long-term commitment to the Canadian mining industry. In addition to our physical presence, we maintain our profile in the community by speaking at conferences, participating in industry associations such as the Prospectors and Developers Association of Canada (PDAC) and the Canadian Institute of Mining and Metallurgy (CIM), and supporting several universities that are grooming the next generation of mining leaders. We also volunteer our time on various industry association committees. Canadian companies are active within the country and around the world, with RCF playing a role in funding numerous projects. Canada represents a significant portion of our allocated capital and I see this continuing based on the opportunities we are seeing in the marketplace. Although in recent years our industry has weathered a challenging investment environment, it would appear that early 2016 was the nadir. Since then, metal prices have rebounded and capital is flowing back into the sector. RCF is as excited as ever by the prospects of working with companies in advancing and developing their projects.


Dave was born 25 miles from where he now lives and works about 10 miles from where he was born. Dave feels privileged to have been able to pursue a varied career in an industry that he is passionate about and also be able to raise his family so close to his childhood home.

We are fortunate to be part of such a terrific industry, an industry that attracts talented, committed and ethical individuals in the pursuit of mineral resources. Mining is a truly global industry yet at the same time I am always amazed by its interconnectedness. There are few industries where former university colleagues working as summer students in northern Ontario bump into each other again in Santiago thirty years later and pick up the conversation like it was yesterday! When I speak with university students who are considering a mining career, I always cite the high quality people within the industry as the top reason why so many of us stay in the sector our entire professional lives.

On a personal note, although I’ve travelled the world visiting more than 50 countries and living across Canada, today I live a short train ride away from where I was born. My wife and I will be celebrating our 25th wedding anniversary in 2017 as well as seeing off the eldest of our two teenagers to university. As you’d expect from a geologist, my hobbies focus on spending as much time outdoors as possible. Hiking, cycling, sea kayaking and photography are at the top of the list of activities that my wife and I enjoy together. I am active on the Human Resources Development Committee of the PDAC and especially enjoy speaking with students who have an interest in pursuing careers in mining and mining finance.


RCF sponsored UWA Business School wins sustainability and value creating competition at PDAC

For the second year in a row, the RCF sponsored University of Western Australia (“UWA”) Business School has won the Schulich International Case Competition at the Prospectors & Development Association of Canada (“PDAC”) convention in Toronto.

The competition requires University and Mining School teams from around the world to submit an essay in response to an industry related question. The top 20 teams travel to Toronto to present their reasoning to a panel of industry judges before the top four teams compete in front of a larger audience at PDAC convention.

In this years’ essay question, competitors were required to identify, ‘What are the most important factors contributing to sustainable strategies for mining companies?’

RCF Managing Partner, James McClements, said that the competition was a valuable way to explore how young people entering the mining industry can create value by prioritizing mining project investment and in the process create sustainable strategies.

“RCF is very proud of the UWA Business School team, who as the next generation of mining industry professionals are making valuable contributions to mining investment and sustainable strategies,” said Mr McClements.

“The competition explores the concept of strategic investment and that mining projects, particularly in today’s challenging metal price environment, face difficult decisions about how to allocate capital to a wide range of initiatives to ensure their sustainability today and well into the future.”

“Sustainable strategies include all aspects of a business from sound environmental management practices through to prudent financing strategies. Sustainable companies do not view any one of these decisions in isolation. Good companies make good decisions across all aspects of their business.”

UWA Business School’s 2016 team was called ‘Team Manganese’ and comprised Matthew Horgan (Team Captain), Timothy Andrews, Jessica Volich and Jessica Harman. First prize was C$10,000 and it was the business school’s second consecutive win and in 2014, their first year of entry, they were runner-up. The RCF sponsorship included travel and accommodation for the competitors to Toronto from Perth, Australia.

Strategic Investments Provide Valuable Dimension to RCF Portfolio

When RCF began investing its first fund, the US$41.4 million (M) RCF I almost two decades ago, investments ranged up to $7.7M in size. With US$2.04 billion available to invest in Fund VI, it would be easy to ignore smaller opportunities.  RCF, however, continues to make investments at these levels for a variety of reasons.  These particular investments look for opportunities where a strategic benefit can be gained and may be from any number of areas such as a new commodity or country, an attractive opportunity not yet ready for material funding, or a new deal structure.

As the funds have grown substantially over time and the size of the investments increased significantly to include more advanced projects, RCF has made a conscious decision not to exclude strategic investments from its portfolio which make valuable contributions to the pipeline of new projects in the industry.

RCF Partner, Peter Nicholson, explains that as with any potential opportunity, RCF has the innate ability to be flexible and it is far better for potential portfolio companies to approach the firm with what they need to succeed rather than RCF try and define what may suit.

“When it comes to strategic investments, the benefits for RCF and our portfolio companies are numerous and include the opportunity to establish a relationship and understanding of management teams in the very early stages of a project’s development,” said Peter.

“We also have a deep understanding of a variety of countries as an investment jurisdiction and can support a company’s strategy as their projects are advanced, including the challenges presented throughout exploration, development and funding options through to cash flow from production.”

“Some of our strategic investments made to date have allowed us to gain an understanding of operating in countries such as Russia, India, Cambodia and the UK; with RCF being the driving force behind the first hard rock metals mine development in England in 45 years.  That particular investment, Wolf Minerals Limited, started as a strategic investment into study work of US$1.8M and has resulted in an RCF investment of US$105M and the mine commissioning in late 2015.

Strategic investments remain an important part of the firm’s investment consideration process and remains committed to exploring investment opportunities regardless of initial size.  Since RCF I in 1998, RCF has consistently invested in mining companies throughout market cycles and operates the firm with integrity, discipline and a view to creating long term value for all stakeholders.

Partner Profile, Pete Nicholson

Pete Nicholson is one of RCF’s seven partners and is responsible for running one of RCF’s two Perth deal teams.

I’ve spent thirteen years with RCF now and in my current capacity head up of one of our two Perth based deal teams. Each deal team is responsible for identifying and sourcing new investment opportunities as well as managing our existing investments and making sure the right communication is happening, funding time frames and expectations are met as well as completing technical due diligence and legal obligations as part of our investment process.

Our philosophy when it comes to managing our investments are a ‘cradle to grave’ responsibility, so that when you start out with an investment it’s your responsibility to facilitate it all the way through. We don’t have someone who sources, and then someone who executes and someone who manages, it stays with us the whole way. We do this because we don’t walk into a deal thinking ‘we’ve done our due diligence so we know everything’, we understand that it’s necessary to spend anywhere up to 12 months with a company before you really understand how they operate. We think that by having the same person involved the whole way through the process provides continuity and learning which can be built upon for a better outcome for all stakeholders.


Pete has an undergraduate degree in engineering from the University of Queensland and started his career as a graduate with Western Mining Corporation (WMC) before undertaking a variety of operations roles and later becoming the company’s Underground Manager at its Longshaft mine. At a subsequent role with Canadian based nickel producer LionOre at their Western Australian nickel project, Pete was responsible for constructing the mine and its infrastructure.

Starting out as a graduate at WMC, it was necessary to complete 12 months’ underground experience in order to obtain your first class mine manager’s ticket. This included haulage, handing explosives, drilling and mobile plant operator among other roles to provide a well-rounded understanding of the underground mine operations.

After the initial 12 months, I went on to become a production and ventilation engineer and later moved into different planning roles, then shift boss for a while before becoming the underground manager at Longshaft. When the operation was flagged for sale, I left to join Canadian company LionOre and as Registered Underground Manager had significant responsibility for construction and development of the Emily Ann nickel mine.  I was on site during the year it took to take the project from a set of feasibility documents through to production, overseeing construction and commissioning.


Having completed postgraduate study in applied finance, majoring in investment analysis and a diploma in financial planning, Pete joined RCF as an analyst in 2003. Pete credits the valuable experience gained in his underground mining roles with being able to provide cost savings and advice on efficiency to portfolio companies.

Pete: Using the underground experience I’ve gained, we were able to help an investment held in Peru optimize its operations by improving its processes to reduce costs and increase production. The company was an existing operator with a number of underground mines and were very good miners but were insulated and unaware of what was happening at a global level. Understanding mining at an operational level helps to quickly identify not only the practical issues and risks faced by companies, but also to recognize the opportunities available.

Ultimately RCF take the view that whilst our capital is the same as the next investors we hope to provide more than just dollars and the sensible question that should be asked by any company is ‘why should I take RCF’s dollars ahead of somebody else’s?’ The real differentiator is that our people have a unique skill set, we’ve been in mines and we’ve operated mines and can add value to our portfolio companies beyond simply providing funding.

As an organisation, RCF has held majority ownership in mines and assisted management in both set up and operation of mines, we really understand the industry and don’t get frightened by short term issues whether it be macro issues concerning commodity prices or foreign exchange rates or micro issues that are mine centric. We understand that it is helpful to have someone who has completed their due diligence and understand a good asset.  Rather than walk away from an issue we’ll work through it and use our global network in terms of other means of raising debt or equity and providing advice on the best approach. It’s our depth of experience across the financial and resources industry that really sets RCF apart.


During his time as Captain of the First Response Mines Rescue Team on site in Kambalda, Pete recognized the important contribution mining operations can make to the community in rural locations.

For eight years after I graduated, I worked across nine different mine sites, living both residentially and in a fly in fly out role. I recognize the importance of the provision of services to remote or rural communities that the development or presence of mining often brings. During my time living in Kambalda, I was the Captain of the First Response Mines Rescue Team. This involved providing emergency response not just for any incident on site but providing back up to the community’s emergency services. During this period, I was also a volunteer fire fighter and a qualified industrial ambulance officer.

I was lucky enough to meet my wife during my time in Kambalda. She is a geologist and was working as part of the exploration team at another site. Personally, I found that I preferred being residential over having a FIFO roster during my time working on site as a Mining Engineer. Living as part of the broader community has its advantages in terms of quality of lifestyle, although it is not always a possibility for some companies or locations.