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.