Brandon Hill Capital. November 2018

Transcription

1 Brandon Hill Capital November 2018

2 Overview Brandon Hill is a specialist natural resources merchant bank The firm was founded over 17 years ago and has built a deep network of capital sources globally We have sourced over ~$4 billion for junior and mid-tier clients We have a senior team that provide a range of capital raising and advisory services to the natural resources sector We offer more than the traditional institutional broker model; we participate in principal investments Finally, we have an entrepreneurial ethos with the aim of supporting clients throughout the development life cycle 2

3 Key Differentiators We have specialised in raising capital and advising natural resources companies for over 17 years; as a result we have developed deep networks globally across a number of market cycles. We are not a traditional London institutional broker that focuses only on targeting London funds We have a team that can access capital through a plethora of sources. We can raise conventional capital via equity capital markets and we can also raise alternative capital via structured finance and other financial products. Ultimately, we seek to raise capital that is most effective for the client We can offer merchant banking services to support clients by deploying our own capital into transactions The firm is focused on natural resources and is made up of highly experienced members with substantial sector expertise that deliver the best possible advice 3

4 Key Service Offering Raising capital - ECM Raising Capital - Debt and Alternative Broking ASX and TSX clients Sourced ~$4 billion for clients Global investor list from London, Europe, Middle East, Asia and North America Non-conventional capital sourced outside the typical institutional lists Debt capital from specialist funds Advisory services Assist both ASX and TSX companies access capital in London Roadshow in London/Europe Dual list where appropriate Research Substantial coverage experience Distribution to institutional and sophisticated investors Corporate Finance Merchant Banking General ECM advisory M&A Invested over 20m in transactions Equity, debt and convertible structures Deal sizes range from 100,000 to 5m 4

5 Equity Capital Markets Institutional investors Hedge funds Private Client Investors Examples Artemis Funds Blackrock Capital Group Fidelity JP Morgan Majedie Asset Management Miton Asset Management CQS GLG Lansdowne Partners Odey Asset Management Polygon Rosseau Toscafund European Wealth First Equity Hobart Capital Optiva Securities Shard Capital SVS Walker Cripps Current Sector view Appetite is returning following strong returns across commodity prices and equities in 2017 Oil prices strong in Q Generally favourable outlook for commodities Renewed interest in meeting new companies and ideas Funds inflow into the buy-side IPO market continues to be difficult for early stage projects Capital raising conditions continues to be selective Investor focus Project is de-risked both geologically and more widely (e.g. country risk) Clear pathway to development Capex not disproportionate to company size (i.e. equity dilution) Favourable position on the cost curve Attractive project returns Management expertise and experience Limited commodity price risk Value versus peer group Liquidity in the equity Market cap hurdles Clear equity catalysts Our role Continuous dialogue with institutions Build high quality register to support business plan development Actively manage the shareholder register to increase liquidity Provide high quality research to communicate the equity story Regular non deal roadshows to develop equity story Advice on capital raising structures and conditions to raise capital Provide accurate gauge of market conditions Feedback investor thoughts General IR advice Access global investor community 5

6 Millions Case Study - Eco Atlantic Oil & Gas TSX to AIM dual listing Background Oil & Gas in Guyana, South America and Namibia, Africa Eco has exploration acreage adjacent to world class discoveries made by Exxon in Guyana. They are in a JV with Tullow Oil. Market cap of ~ 72m Dual listed on AIM from TSX in February 2017 Summary Brandon Hill originally mandated to raise up to 3m Trading Volumes (millions) London TSX Background to dual listing Frontier international exploration understood by London market Unique exposure to Guyana in London via Eco Limited liquidity and access to capital on TSX Pre-marketing work indicated appetite for the company to list in London Completed over subscribed placing of 5m to sophisticated and institutional shareholders London is now the prime driver of liquidity and share price Share Price (pence) /11/ /03/ /07/ /11/2018 6

7 Case Study Phoenix Global Mining Pre-IPO, IPO and Secondary raises on AIM Background Copper in USA IPO on AIM in June 2017 Market cap of ~ 9.5m Total funds raised ~ 8.4m Share Price (pence) Summary 10 14/11/ /03/ /07/ /11/2018 Brandon Hill was appointed broker to PGM to complete a pre-ipo raise in January 2017 which was completed by March A total of 800,000 was raised from sophisticated investors for the pre-ipo at 20p Brandon Hill acted as lead financial adviser during the pre-ipo, March 2017 and IPO, June 2017 Brandon Hill raised 4.6m for the Company during the IPO on AIM at a placing price of 40p Brandon Hill led a secondary raise of 3m in May 2018 for the Company 7

8 Case Study - Atalaya Mining Funding production projects Background Formerly called EMED mining Copper in Spain Market cap of ~ 346.1m Total funds raised 125.6m since Share Price (pence) Summary Brandon Hill raised over 125m for the company from In June 2015 we closed an equity placing for c. 65m for the company to commence production at the Rio Tinto project in Spain Brandon Hill was lead broker in all capital raisings during this period Brandon Hill introduced a number of key institutional and strategic investors to the company during the period 50 18/10/ /02/ /06/ /10/2018 Brandon Hill introductions: Red Kite Majedie Asset Management Odey Asset Management Audley Capital Standard Life 8

9 Case Study - San Leon Energy Funding corporate acquisitions Background Oil & Gas in Nigeria Market cap of ~ 143.8m Total funds raised circa 300m Summary Acted as broker to the IPO in 2010 and raised 6m Raised a further 63.2m in secondary fundraises during 2010 Acted as Financial Adviser to San Leon during its takeover of Aurelian Oil & Gas (for 62m) in January 2013 In October 2013 we raised 31m In May 2015 we raised 29m In August 2016 we completed a raise of 170.2m to fund the acquisition of onshore assets in Nigeria by way of reverse takeover Brandon Hill has introduced a number of key institutional and strategic investors to the company Capital Raised m Total Notable Brandon Hill introductions: Capital Ingalls & Snyder Toscafund Standard Life Vitol Kingsbrook Partners GLG Partners 9

10 Debt and Structured Capital Institutions Trading Houses Specialist Examples Macquarie Capital VTB Capital London Rand Merchant Bank Helios Abraaj Gazprom Bank ICBC Standard Bank Mercuria ECTP Hartree Partners Glencore Louis Dreyfus Commodities Traxys Trafigura Single and Multi Family offices Commodity trade finance (CTF) funds Principal Commodity Groups Bridge Finance Funds DFI s Private Banks Specialist Debt Funds Current Sector view Specialist resources focused teams within the institutions, focused on well collateralised lending and structured equity transactions (e.g. repos, convertibles, preference shares, options) Emergence of well capitalised mid-tier trading houses with more flexible capital deployment capability including Equity. Competing with trade finance funds across CTF and prepayment structures Asset values have been rebased to accommodate lower pricing environment, and attractive yield opportunities versus traditional asset classes remain attractive for assetbacked debt and equity structures Investor focus Typical ticket sizes of >$50mm USD Preference for larger infrastructure and hard asset transactions. Less interest in commodity price risk exposure. Geographical preferences vary according to global footprint Well securitised transactions and potential for product/off-take optimisations Leveraging financing lines for greater ROE Balancing book of longs and shorts Value versus peer group Liquidity in the equity High Yielding structures Niche and/or strategic assets Our role Continuous dialogue with institutions Offer clients deal and non-deal roadshow forum for pre-marketing assessment of opportunity Preparing technical and financial material for deal committee presentation. Regular contact to understand existing book distribution and appetite Ability to structure trade flows in order to capture interest Advice on capital raising structures and structured trade finance mechanisms Understanding of investment objectives, transaction size preferences and tenures Analysis of investor feedback/comments/critique Plug and play into specific groups according to each deal requirement Access global investor community 10

11 Case Study Vast Resources Prepay & offtake Background Copper in Romania and Gold in Zimbabwe Market cap of ~ 33.4m Total funds raised $9.5m Share Price (pence) /11/ /03/ /07/ /11/2018 Summary Brandon Hill was appointed Financial Advisor for the fundraise in November 2017 The debt financing was completed in March 2018 with a $9.5m financing facility secured from Mercuria Energy Group Simultaneously with the prepayment agreement, an offtake agreement was also secured with Mercuria Energy Group for the period to April 2022 for up to 100% of the copper & zinc concentrate produced at Vast s mines in Romania 11

12 Investor Universe 12

13 Research Institutional coverage We are a research led firm We have dedicated sector analysts that provide analysis for the investment community to break through the technical aspects to deliver an investment story We provide coverage on all of our clients Regular contact with leading fund managers to discuss research Distribution Over 500 institutional accounts receive our research Made available on Bloomberg and Thompson platforms Circulated to UK PCBs Other discrete platforms for alternative capital sources 13

14 Mining Research Experience (Current & Past) Company Region Exploration or development Focus Listing Acacia Mining Africa Production Gold LSE Angel Mining Europe Development Zinc LSE Antofagasta Latin America Production Copper LSE Atalaya Mining Europe Production Copper LSE Aura Energy Africa/Europe Exploration Uranium LSE/ASX Barrick Gold Global Production Multi TSX BHP Global Production Multi LSE/ASX Buenaventura Latin America Production Multi NYSE Bushveld Minerals South Africa Exploration Vanadium LSE Calidus Resources Australia Exploration Gold ASX Celsius Coal FSU Exploration Coal ASX Celtic Resources FSU Production Gold LSE Colt Resources Inc. Europe Exploration Tungsten TSX Copper Development Corporation Southeast Asia Exploration Copper LSE/TSX Discovery Metals Africa Production Gold LSE/ASX European Lithium Europe Exploration Lithium ASX European Metals Europe Exploration Lithium LSE Exco Australia Production Gold/Copper ASX Fox Marble Europe Production Marble LSE Gippsland Limited Australia Exploration Tin LSE/ASX Gold Rim Africa Exploration Gold ASX Highland Gold FSU Production Gold LSE Hochchilds Latin America Production Silver LSE Iluka Australia Production Mineral Sands ASX KEFI Africa Development Gold LSE Kyrso Resources FSU Development Gold LSE Lihir South East Asia Production Gold ASX Mariana Turkey Exploration Copper/Gold LSE/TSX Meridian Latin America Production Gold TSX Mindoro Resources South East Asia Exploration Nickel ASX Minera IR Latin America Production Gold LSE/TSX Mount Isa Mines Australia Production Copper ASX Newcrest Australia Production Gold ASX Newmont Global Production Gold NYSE North Ltd Global Production Iron ore ASX Oracle Coalfields Pakistan Exploration Coal LSE Phoenix Global Mining USA Exploration Copper LSE Placer Dome Global Production Gold ASX Randgold Resources Africa Production Gold LSE Rio Tinto Global Production Multi LSE/ASX Sons of Gwalia Australia Production Gold ASX Westralian Sands Australia Production Mineral Sands ASX Zinifex Australia Production Zinc ASX 14

15 Corporate Finance We provide our clients with broad range of corporate finance support: IPOs Dual listings (ASX and TSX) Open Offers Takeover Code advisory Structured finance advisory Standard list LSE advisory Ongoing listing and AIM rules Valuation work Pre-pay & Offtake with Mercuria March 2018 $10m Financial Adviser Project finance March 2018 $1.7bn Financial Adviser Pre-IPO & AIM IPO June m Financial Adviser & Broker Dual listing to AIM February m Broker 15

16 Merchant Banking We have deployed over 20m into various client transactions since 2014 through the following structures: Equity placings Loans Payment of fees in equity Restructuring/working capital requirements Underwriting deal costs (e.g. dual listings) Conversion of Loan & fees paid in shares 0.325m March 2018 Equity Placing $6m August 2016 Pre-IPO & AIM IPO equity placing and fees in shares 0.25m Facility to underwrite transaction costs 0.5m June 2018 February

17 Other Case Studies

18 Case Study - Mariana Resources Funding juniors in exploration Background Gold/Copper in Turkey, Argentina and Peru Market cap of ~ 100m Total funds raised ~ 13m since 2013 Summary Brandon Hill was appointed broker to Mariana in April 2013 We led each fund raise and raised over ~ 13m over 5 separate placings during this period Mariana had successful exploration results at their Hot Maden project in Turkey in 2015 In October 2015, Mariana attracted its first institutional investors to fund additional drilling at Hot Maden. European and North American institutions such as Gold 2000, Resource Capital Funds and Sprott joined the share register. More recently in March 2016, Sandstorm and other select Swiss specialist funds were added to the share register In June 2017 Mariana was taken over by Sandstorm following a bid of 109p per share Brandon Hill has proven capability of assisting juniors through the development curve by sourcing equity globally Share Price (pence) Notable Brandon Hill introductions: Sprott Resource Capital Funds Gold 2000 MENA capital Swiss private banks Swiss family offices 18

19 Millions Case Study - Tlou Energy Dual listing from ASX Background Trading Volumes (millions) Coal bed methane gas in Botswana Dual listed on AIM in November 2015 Market cap of ~ 23.9m Summary Brandon Hill completed a pre-marketing exercise for Tlou in March 2015 in anticipation of dual listing in Q Mandated as Financial Adviser and Broker to the dual listing in November 2015 Raised over 4m since dual listing on AIM Liquidity improved over the course of the first 12 months trading on AIM London is now the prime driver of liquidity and share price following a lengthy period of investor education and awareness campaigns London ASX 19

20 Case Study Victoria Oil & Gas Developing a project into production Background Gas in Cameroon Market cap of ~ 42.1m Total funds raised 91.8m Brandon Hill introductions: Fidelity GLG Partners LP Sunrise Securities Hadron Capital Capital Group Summary Brandon Hill raised over 90m for the company from Brandon Hill acted as lead broker throughout this period In 2013 we raised 23 million of equity for VOG: Roadshow was arranged with a variety of UK institutions, emerging market funds and natural resources funds Over 100 funds were approached, with c. 40% taking meetings Majedie Asset Management Hargrave Hale Limited Nubuke Africa Multi Strategy Africa Master Fund YF Finance VOG is now in production 20

21 Senior Mining Team Oliver Stansfield Peter Rose Jonathan Evans Arron Smyth CEO & Head of Equity Sales Head of Mining Research Head of Corporate Finance Structured Finance Co-established the equity sales team at Fox-Davies Capital in 2004 Appointed Chief Executive Officer of BHC in September 2014 Specialist equity sales in natural resources for over 14 years Strong relationship with equity funds, hedge funds and strategic investors globally Raised over $2 billion for natural resource clients in 14 years Joined Fox-Davies in 2007 following a long career with Deutsche Bank, Sydney as global gold analyst with coverage of base metals Commenced career with Pru Bache and James Capel in Sydney Trained as metallurgist and spent16 years in industry Member of the Institute of Mining & Metallurgy and a Chartered Engineer Qualified chartered accountant with over 12 years experience of advising clients on equity capital markets Formerly a nomad for the purposes of the AIM rules Led IPOs including Bushveld Minerals, Fox Marble, Phoenix Global Mining, Eco Atlantic Focused on natural resources sector Strong relationships built across London, Australian and Canadian markets Over 15 years financial services experience Former owner, Director and Investment Manager of UK Asset Management business Physical commodities trading, including trade finance and structured financing solutions. Experienced in debt and equity markets with a focus on the Oil & Gas, Mining, Agri and Renewable Energy sectors. Advisor and principal investor across emerging/frontier markets including Sub- Saharan Africa and Middle East Tel: Tel: Tel: Tel: oliver.stansfield@brandonhillcapital.com peter.rose@brandonhillcapital.com jonathan.evans@brandonhillcapital.com arron.smyth@brandonhillcapital.com 21

22 Senior Mining Team Robert Beenstock Director, Corporate Finance Joined in 2014 FCA chartered accountant 15 years advising small-mid cap companies General ECM advisory - IPO s and capital raisings City Code advice Private equity advisory Previously a Nomad for AIM Companies Wei Jiao Director, Corporate Finance & Chinese Distribution Joined in 2013 CFA MA Finance Mandarin speaker Focus on accessing strategic investors and equity investors across Asia Strong network with corporate groups in China seeking JV s, farm ins etc. Regularly roadshow clients in China Tel: robert.beenstock@brandonhillcapital.com Tel: wei.jiao@brandonhillcapital.com 22

23 Contact Brandon Hill Capital Limited 1 Tudor Street London EC4Y 0AH Telephone: Fax: