Minvest Partners taps overlooked advanced exploration niche market

November 26
12:02 AM 2013

A Mining Markets article noted that the advanced exploration market have yet to be given attention by bigwig private equity funds like Carlyle Group, KKR & Co and Apollo Global Management. However, Toronto-based merchant bank Minerx Group intends to dominate this niche market with a new private equity arm called Minvest Partners, which it had started a year ago.

President of Minerx and managing partner of Minvest Stephen Stewart said, "We recognized a while ago that the industry was grinding to a halt. We knew that there would be all sorts of opportunities available in larger junior companies, mid-tier producers, or even some of the juniors that have more advanced-stage assets that could be acquired at low costs, but wouldn't be attractive to the typical private equity."

Stewart said the fund's goal was to highlight the opportunities that could be present in earlier-stage exploration projects.

"All the assets we're looking at make no claims to production in the next twelve months, which is sort of what everybody else is looking for," Stewart disclosed.

Almost all of the principals of Minerx and Miverva are professionals - financiers, geologists, engineers and lawyers - who had done traditional mining exploration and development deals until the public capital markets ran dry.

Stewart offered a view of the state of producing or near-producing mining asset market. "I don't know when the market's going to turn, but I know it's not short term. The public markets, the traditional financing partners of the mining and metals space - whether it's retail or institutions... they've been beaten down so hard that they don't want to participate."

Stewart believed that although backing up early exploration assets will have costly exploration risks, a private equity firm should have assessment measures in place in order to conduct a review on a potential acquisition or investment in question prior to making that investment.

"Private equity and many smart people see the opportunity and recognize that it's going to take some time, but if you can be patient, you have the right team, the right strategy, and the ability to identify and evaluate the good assets and separate them from the bad assets, of which there are many - if you can do that and buy right and hold onto it for a little bit, there's a real opportunity - a once in a generation type opportunity," Stewart added.

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