One of the most prominent Anglo-Russian metal industry executives is looking to raise $125 million for a new mining venture through a London-listed special purpose acquisition company.
Artem Volynets, former CEO of EN+ Group, believes now is a good time for mining deals, especially for critical metals like copper and cobalt, despite difficult market conditions.
“This is a great time. Valuations are low,” Volynets told the Financial Times. “The next 12 months is a great time to negotiate a transaction. . . It has been placed in our hands.”
New blank check fund ACG wants to raise up to $125 million in its IPO on Thursday and will identify a target mine that produces copper, nickel, cobalt or another metal.
Prices These metals have all declined in recent months on fears of an economic recession, but demand is expected to increase over the next decade on demand for clean energy products and electric vehicles.
The Spac structure allows executives to raise money through an IPO and then merge with another company, effectively reaching the target audience.
Volynets, who led the Hong Kong listing of Russian aluminum giant Rusal in 2010, said Spacs are well suited for mining companies as they offer a relatively quick route to an IPO.
“I’ve done IPOs with mining companies. It is very difficult . . . and you don’t know until the last moment if it’s going to happen,” he said.
Last year, Russian mining company Nordgold had its London listing pulled at the last moment due to volatility in commodity prices.
Volynets was deputy CEO of Rusal until 2010 and worked for billionaire mining magnate Oleg Deripaska until 2013.
The mining sector has been largely untouched by the Spac craze, with only a handful of significant deals materializing so far
The best known of these was Metals Acquisition Corp; it was listed in New York in 2021 and agreed to buy Glencore’s $1.1 billion CSA copper mine in Australia earlier this year.
Vision Blue Resources, a fund founded by former Xstrata CEO Mick Davis, backed a spac that raised $300 million in New York last year.
One of the disadvantages of the Spac format arises in the event that shareholders decide to exercise their redemption rights. In that case, the company would have to buy back its shares, potentially posing a liquidity challenge.
According to Volynets, ACG can avoid this by exercising a $100 million forward purchase agreement it has with IXM, a subsidiary of China Molybdenum.
The Company will be looking for a target mine that is already producing ore that is close to production. Copper, nickel and cobalt are “high on our list” for a target that could be anywhere in the world outside of Russia, Volynets said.
https://www.ft.com/content/69dd7232-adf6-4e5e-abe0-3505ddbac413 Former Rusal boss establishes London’s first mining spa