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| Investment Strategy - Overview |
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The Funds strategy is to identify quality mining projects with strong fundamentals and appropriate valuations. The projects considered range from scoping study development assets through to producing assets.
The process of adding value to a mining project is often capital intensive, providing the opportunity for the Funds to make investments. The Funds will continue their strategy of investing in attractive mining assets with reliable management teams who, with support and supplementation as necessary, and when provided with patient capital, can realize significant value.
The transactions are generally privately negotiated, but may include other investors. As a condition of their investments, the Funds frequently require representation on the portfolio company's board of directors.
Historically, a large part of the Funds strategy was to fund companies through the development stage, at which time the company should be re-rated by the markets at higher value levels. While this strategy holds true today, The Funds have extended its strategy to include buyouts of operating assets and distressed opportunities. Most distressed opportunities in which the Funds invest in are due to coroporate financial issues, not project related technical issues.
Fundamental to the Funds' investment strategy is an emphasis on careful technical evalutaion of a project. Most of the projects that wil be considered by the Funds will have completed, at a minimum, substantial drilling programs and other test work including metallurgical tests to establish the potential size, grade and likely production scenario for the deposit. Due diligence typically includes technical, legal, financial and country/political analysis, as well as site visits and evalutation of the company's management group.
The members of the Funds' Management Team include mining industry professionals with broad experience covering most facets of the mining and mineral industries and extensive and diverse industry contacts. They have an extensive experience working with small and intermediate-stage mining companies throughtout the world. The expertise and reputation of the Management Team enhances the Funds considerable deal flow because prospective portfolio companies are often seeking outside technical and financial expertise in addition to investment capital. Each member of the senior Management Team reprents the Funds by serving on portfolio company boards of directors. Management of the Funds is further strengthened by the advice and conusel of the Advisory Board, which is made up of highly respected and well-known senior mining industry executives.
The Funds have the capacity to invest up to US$75 million in a single transaction but can make an initial investment as small as US$2 million. As a result of existing relationships and support of its existing Limited Partners, the Funds is comfortable considering transactions with a total value of up to US$500 million. |
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