Denham Capital, an energy-focused global private equity firm, has closed its first stand-alone mining fund at $558 million to expand its portfolio into new markets, including Australia.
According to an official release, the fund, named the Denham Mining Fund, will target investments in base metals, metallurgical coal, and industrial and specialty minerals in Australia, Canada, South America and Africa.
It will also continue the firm’s strategy of partnering with management teams with proven track records to acquire companies and assets in the metals and minerals sectors, that are close to or already in production.
“The close of our first mining fund marks a significant and strategic milestone for Denham Capital. Our limited partners share our belief that there is a robust pipeline of opportunities across the global mining sector and that they chose to work with us,” said Carl Tricoli, Managing Partner and Co-Founder, Denham Capital.
“It’s an attractive market where we see in many jurisdictions the opportunity to secure projects that meet our investment criteria,” added Bert Koth, Managing Director and Partner, Denham Mining Fund at Denham Capital. “We seek to partner with local management teams who understand capital efficiency and can demonstrate edge in accessing opportunity and execution through their superior technical experience and regional knowledge.”
The closing of the fund brings the amount of invested and committed capital under Denham’s management to approximately $9.8 billion.
The firm’s current mining portfolio includes Pembroke Resources, a Sydney based company pursuing and developing metallurgical coal projects in the Asia-Pacific region; Auctus Minerals, a Perth-based company developing base metals assets throughout Australia; Mining Ventures Brazil, that is currently developing a heavy rare earths project; Pangea Limited, a Johannesburg based mining platform targeting and developing projects in several African countries; Santiago Metals, a Chilean mining venture developing copper mines in Chile; and Stellar Mining, a mining and exploration company in Peru. The firm announced the sale of JDS Silver in 2017.
Founded in 2004, it boasts of more than $9.8 billion of invested and committed capital across nine fund vehicles. It has offices in London, Boston, Houston, São Paulo and Perth. The firm makes direct investments in the energy and resources sectors, including businesses involving international power, oil and gas, and mining, across the globe.
Specialist PE firms are relatively recent arrival to the mining space, after the global financial crisis dried up the availability of capital for exploration and development. Majors meanwhile have been focused on divesting non core assets to pay down debt.
Koth, however, is upbeat that PE firms can successfully seize the opportunities in this market.
“I haven’t seen this erode or undermine our opportunities yet,” said Koth, as quoted by Reuters. “There’s still a significant amount of balance sheet repair out there … that is the catalyst for some opportunities.”