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RCF Sponsors AICD in Support of Board Diversity

RCF proudly announced the sponsorship of Australian Institute of Company Directors (AICD) Western Australia’s 2019 Director Pipeline Program (DPP) at the 2018 DPP Wrap Reception held in Perth on 6 September 2018.  Launched in 2011 by the West Australian Division of the AICD, the DPP aims to create a pipeline of “board-ready” executive women in the WA business community, and to complement AICD’s national board diversity initiatives.

The program runs from February to September each year and provides the opportunity to extend networks with other senior executives and directors, raise their profiles through exclusive events and functions, and attend a range of workshops and professional development programs.  The 2018 participants included 44 women from a wide range of organisations, industries and backgrounds.

Barbara Gordon, RCF’s co-Legal Counsel, Australia spoke at the reception about RCF’s encouragement of diversity at the board level of WA companies.  As of 6 September 2018, 38%[1] of RCF’s ASX listed investments have women on their boards, including one in the role of Chair.  This compares favourably to 21.7%[2] of ASX All Ordinaries boards having women directors as at 30 June 2018.  Globally, 27%[3] of RCF’s investments have female directors.

“This diversity and strengthening of board skill sets is something RCF has been actively working on and we continue to be open to ideas that will help us to identify talent for our portfolio company boards.“ said Ms Gordon.

 

AICD released a Gender Diversity Progress Report[4] on 7 September 2018 indicating the boards of Australia’s largest companies are drawing closer to achieving 30% female representation by the end of 2018.

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Caption: 2018 Director Pipeline Program Wrap Reception held in Perth on 6 September 2018

[1] Source: RCF internal data, 6 September 2018

[2] Source: AICD website, 7 September 2018

[3] Source: RCF internal data, 6 September 2018

[4] Source https://aicd.companydirectors.com.au/advocacy/board-diversity/gender-diversity-momentum-continues-asx-200-boards

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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.

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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.

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Caption: Ore load-out causeway

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Alufer Mining Ltd’s Bel Air Project – Strengthening Long-Term Community Development

Resource Capital Fund VI L.P. is an investor in Alufer Mining Ltd, a private company nearing the completion of construction at its Bel Air bauxite project in the Republic of Guinea. This video, which was funded by the International Finance Corporation and directed by a young African film producer, highlights the strategic partnerships which have been developed between Alufer and local communities to develop skills and sustainable businesses which aim to strengthen long-term community development.

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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.

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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

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Alufer Mining rapidly advancing the Bel Air project in Guinea

Alufer Mining rapidly advancing the Bel Air project in Guinea

Alufer Mining Ltd. is an independent private mineral exploration and development company headquartered in London, with significant bauxite assets in the Republic of Guinea, in West Africa. Bauxite is the main commercial mineral from which aluminium oxide is extracted, which in turn is smelted to form aluminium metal. The company is focused on the development of the Bel Air project, which is expected to commence production in 2018. Significant capital has been invested in exploration since January 2011 and substantial work programmes have been identified both at Bel Air and at Labé, which was Alufer Mining’s original bauxite asset.

The mining industry in Guinea accounts for over 70% of the country’s exports (African Business Magazine, March 2017). Guinea has deposits of bauxite, iron ore, gold, and diamonds all with significant geological potential. Guinean bauxite reserves contribute to 94% of Africa’s reserves and 25% globally. Bauxite from Guinea has certain qualities which make it useful to Chinese refineries. Medium and long term bauxite demand is high, driven by growth in key sectors including transportation, construction, and consumer products.

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RCF Involvement

RCF has built a strategic partnership with Alufer Mining. RCF’s Fund VI was originally approached by Alufer in May 2011 for funding to conduct exploration on Bel Air, but declined due to the early stage of the project. RCF kept in contact with the Company over the next two and a half years and began to look seriously at the Project again in Q4 2013, upon the completion of its 2013 Feasibility Study. In 2013, the original management team of Alufer Mining approached RCF representative, Mike Price, in London with an intriguing project proposal. RCF was extremely interested in this project for a variety of reasons. Firstly, RCF believed the envisioned project in Guinea would have a lot of material to offer, aside from having potentially one of the biggest bauxite resources in the world. Secondly, RCF identified that the Bel Air project had an attractive logistical advantage. Generally, the majority of bauxite deposits are inland. However, the Bel Air project was unique in that it is located right on the coast. Thirdly, the deposit was of a good quality, therefore from a mining perspective, RCF believed it would be relatively easy to mine and anticipated it also could be easily exported straight away. In conducting its initial due diligence RCF identified that the company first needed to complete fundamental work to get to a satisfactory feasibility study, followed by the actual construction of the project.

As such, RCF became a key financier of the construction of the Bel Air project through its initial November 2015 investment in Alufer via a $10 million bridge loan funding completion of the Definitive Feasibility Study (“DFS”) of the Project.  After the company’s early 2016 completion of the feasibility study, RCF further extended the bridge loan and an additional $4 million was provided to the Company in September 2016.

Successful completion of project financing was completed in December 2016 in collaboration with the finance institution Africa Finance Corporation (AFC), and with specialist mining investor, Orion Mine Finance.  After significant negotiations with the Company led by RCF, a project financing package was agreed upon by the investment groups to provide US$110.0M in a combination of equity and convertible debt.

Construction activities commenced in 2017, resulting in the growth  from 15 employees to 1000 employees – over an estimated 15 month construction period.

At present, along with its ongoing financial assistance, RCF continues to assist in the facilitation of new appointments to the Company’s management team and governance committees to strengthen the expertise required for the ongoing work to fast track the project. As part of the financing package, RCF developed an independent board of directors and three separate committees:

  • The first committee is the Project Development Committee, which is chaired by RCF’s Allan Brownrigg, and oversees the construction and monitors the contractors, ensuring the project is on time and on budget.
  • The second committee is the Environmental, Social and Governance (ESG), chaired by RCF’s Allison Forrest. Community relations are fundamental as the project employs many local people and the Government of Guinea also being a major shareholder in the project.
  • The final committee is the Marketing Committee, encompassing the process of setting the offtake agreements for the purchase of materials, which is chaired by RCF’s Mason Hills.

 

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The significance of the project in Guinea

This project is very significant for the Guinean Government, who holds a 25% stake in the mine. The project is a milestone that will contribute to the development of the mining sector in Guinea, helping create around 3,500 direct and indirect jobs during its construction phase. Alufer Mining plans to extract bauxite using surface equipment that limits the negative impact on the environment and local communities; and transport will be undertaken with trucks to be loaded onto barges that deliver to vessels at sea.

The $205 million deal is one of the largest foreign investments in the country since the 2014 Ebola crisis.

The project is anticipated to be completed in September/October 2018. It has a nameplate capacity of 5 million tonnes per annum but can be easily scaled to 10 million tonnes per annum. It is one of the major projects of the Guinean Government and is of national significance, both in terms of the employment and community benefits it brings to the country.

RCF conducted significant risk work and took due diligence measures with the project. In 2014 the largest outbreak of Ebola hit multiple countries in West Africa, with Guinea, Sierra Leone and Liberia suffering most. Furthermore, Guinea historically had a reputation for corruption that had pervaded, in particular, the mining sector, as evidenced the international scandal involving the Simandou Project.  RCF General Counsel Cassie Boggs and RCF representative Mike Price first visited Guinea in May 2014 to conduct preliminary country due diligence in an effort to assess country risk. While in the country, RCF met with Ambassadors from the US, UK, South Africa, the Guinean Minster of Mines, Deputy Chief of Staff to the President, Mining Advisor to the President, the IFC, and along with other Guinean governmental, international-affairs, and business representatives. In parallel, RCF also engaged a London based law firm with significant experience in West Africa and Guinea to assist in certain legal due diligence, and a political risk consultant with extensive experience in Guinea to review and update political risks, conduct inquiries and to consider certain specific issues regarding the application and enforcement of environmental standards and regulations in Guinea, corruption issues, and issues of general political stability.

After the conclusion of its diligence, RCF was pleased to find that President Conde and Minister of Mines Kerfalla had demonstrated decisive governmental leadership in combating corruption, by requiring an unprecedented level of transparency in regards to the review and issuance of mining licenses, including the publication of all mining agreements on the Internet. RCF continues to monitor the country’s anti-corruption climate along with Alufer’s actions in Guinea through internal due diligence and third party consultants to ensure it maintains its strict procedures and complies with all local and international laws.

In February 2016, the Guinean Government and Alufer Mining signed the Mining Convention for the Bel Air bauxite project, and in his address, Prime Minister of Guinea Mr. Mamady Youla, commented “Efforts since 2010 to boost economic activity in developing countries have ended up paying off and the signing of the bauxite project Bel Air is a good example. This is a strong signal to the international community and investors. After two years of courageous struggle against Ebola, the fight against the epidemic is finally won, and the development of Guinea can resume vigorously”.

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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.

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Post 2017 PDAC discussion

The Prospectors & Developers Association of Canada (PDAC) is one of the premier international events for the mining industry. PDAC is held annually in Toronto in early March. 

PDAC is the world’s largest mining and exploration convention, with more than 24,000 attendees this year from across the globe. Participants from the Americas, Africa, Europe and elsewhere brave the inclement weather to travel to Toronto in March for deal making and to promote doing business in their respective countries. This year RCF had a 20-person strong contingent from our Denver, Toronto, and Santiago offices in attendance.

A happy coincidence is that our Toronto office is a mere five minute walk from the convention centre. This enables us to have companies come to our office, rather than scrambling to find a place to meet (which can be a challenge during the convention). We can efficiently meet with management teams, investment bankers and commodities consultants on our “home turf”, increasing the number of people we can connect with over the course of the convention.

For the second straight year, RCF hosted a booth on the trade show floor, the only investment fund to do so.  Tucked in between big and small mining companies alike, we were a magnet for companies that were in search of capital for advancing their projects. We also find the booth attracts numerous individuals who are curious about a career in private equity. We are more than happy to spend some time with them, as it is an ideal opportunity for recruiting and to highlight some of the university programs we support through scholarships and internships. We also held our seventh annual dinner in which 60 guests had an opportunity to catch up and discuss our sector. Given the dinner’s informal setting and the close knit nature of the business, most invitees make time in their busy PDAC schedules to attend our event every year.

The mood at PDAC this year was the polar opposite of a year ago. Last year the sector was four years into a prolonged industry slump. The mood was subdued, with many smaller exploration companies scrambling to find “keep the lights on” funding. This year’s sentiment was considerably more buoyant, with many companies focused on renewed exploration spending and a desire to replace and grow their resource bases. Some capital is slowly becoming available to the sector after a long hiatus and a new sense of optimism for the future is palpable.

 

Private equity will continue to invest in the mining industry

 RCF has been investing in mining for nearly 20 years, through good times and through tough times. This is what we do. We are a group of mining professionals who are in this for the long run. The opportunity set is broad and deep and there are always great projects to invest in, regardless of where we are in the investment cycle.

We have found that the private equity style of investment is well suited to investing in the mining space. We are a source of patient capital and are comfortable operating in this cyclical industry.

 

RCF is very active in Canada

 RCF has carried out a tremendous amount of investment activity in Canada both in the past and more recently. Several of our larger deals in RCF VI, the current fund, are in Canada — TMAC Resources and Riversdale Resources.

RCF recognizes Toronto as a global financial hub for the mining industry and understands the importance of having a physical presence here, especially given the number of mining companies in Toronto. RCF is here for the long haul, and we will keep working with companies that have great assets and strong management teams to maximise the value of those assets for all stakeholders.

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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.