• Investment Process

We have a documented and structured investment process for all investments.  In summary, the investment process comprises the following steps.

1. Screen and evaluate investment opportunity

Our team evaluates both public issue and private transactions based upon a number of specific criteria.  Some of the key criteria are:

  • Macro outlook for the specific commodity
  • Country risk including
    • Political
    • Legal
    • Commercial
    • Security of asset
    • Personal security
  • Project factors, including
    • Deposit quality and grade
    • Project infrastructure and location
  • Strategic outlook including
    • Resources and reserves growth potential
    • Capital cost efficiencies
    • Production cost
  • Key financial metrics, including
    • Company valuation
    • Ownership analysis
    • Projected financial returns
  • Quality of management, including
    • Technical
    • Commercial
    • Financial
    • Governance
    • Track record and potential
  • Alignment of interests between management and investors, including
    • How management is incentivized and remunerated
  • Rationale for investment entry

After the initial screening, the investment opportunities are then shortlisted and prioritized.  As part of this process the Investment Team may meet with management of the investee company to discuss key issues relating to the company and projects and potential investment entry

 

2. Initial due diligence

The Investment Team will perform an initial “desktop” due diligence of the investee company and project, in relation to the following aspects, based upon information available and discussions with management:

  1. Technical
  2. Commercial
  3. Financial
  4. Governance
3. Initial Investment Committee approval

The Investment Committee will evaluate the investment proposal based upon the initial due diligence performed and investment case submitted by the Investment Team and whether the project should proceed to detailed due diligence.

4. Detailed due diligence

The Investment Team will perform a thorough due diligence of the investee company and the underlying project.

1.    Technical due diligence

This will always include a site visit and investigation of the following aspects:

  • Geological assessment/resource modeling and estimation
  • Engineering assessment
  • Metallurgical evaluation
  • Social & environmental assessment

2.    Commercial due diligence

3.    Legal due diligence    

4.    Financial and tax diligence

5.    Corporate governance

Independent experts and consultants will be engaged where appropriate.

 

5. Valuation and structuring of investment

The Investment Team will finalise

  • Its valuation of the target company or project
  • Financial model and cash flow projections,
  • Investment structure
  • Terms of investment

The investment opportunity is evaluated in detail by the Investment Team based upon both qualitative and quantitative metrics.  This evaluation is documented and becomes the primary input into the Investment Committee decision making process.

6. Investment Committee approval

 

7. Execute investment

Upon approval, the Investment Team will finalise agreements with the investee company and execute the investment.