Mining tycoon Sir Mick Davis, the ex-chief of former FTSE 100 miner Xstrata, is back on the comeback trail in the industry after raising $300 million for his new mining venture with a special purpose acquisition company (SPAC) in the US.
Davis, one of the mining industry’s most well-known figures, has partnered his Vision Blue Resources company with New York-listed ESM to look for mining ventures producing metals key to the electric vehicle and green energy revolution.
Davis’s plan is to use his Vision Blue business to invest in smaller mining projects, something which could well cause excitement among small cap mining stocks, while ESM will seek big investment opportunities, gearing up the $300 million with debt for the right opportunity.
VANADIUM MINER SOARS ON DAVIS INVESTMENT
One investment he has already agreed, separate to the SPAC deal, has been to put up to $12.6 million into small cap UK-listed vanadium miner Ferro Alloy Resources (FAR), in a deal which will see Davis join the company’s board as chairman.
Shares in the firm soared over 34% to 14.11p following the news, with Davis hailing its ‘compelling’ investment case, ‘attractive risk profile’ and the ‘many qualities that are difficult to find in other mining investment opportunities’.
With operations based in Kazakhstan, Ferro Alloy has two main business activities: an existing vanadium concentrating plant and, seen as the firm’s jewel in the crown, its Balausa vanadium deposit in southern Kazakhstan which it hopes will turn it into the lowest cost producer of vanadium globally.
FAILED COMEBACK ATTEMPT
Davis will hope his latest industry comeback turns out better than his last, which ended in 2016 after his previous acquisition vehicle, X2 Resources, raised $5.6 billion in 2013 but failed to do any deals in three years.
The vehicle had won commitments on the promise it would pick up bargains in the market at a time when there was a sustained sell-off in commodities with an accompanying fire sale of assets.
It was reported at the time that the X2 was looking to buy coal mines from Rio Tinto (RIO) before the deals failed to happen, and also looked to buy some mines from BHP (BHP) before the mining giant instead decided to spin them into what is now known as South32.
www.ferroalloynet.com
