Investment criteria and procedures

Does it fit the opportunity ?

• Significant discovery potential
• Country/district/first mover advantage
• Application of improved exploration techniques
• Exploration value uplift potential/brownfields
• Financial restructuring opportunity
• M&A opportunity
• Macro/micro economic trading opportunity

Or is it a special situation opportunity?

Where does the investment and its assets sit on the development curve?

Categorise investment opportunity:

Project Investment/Equity Investment/Special Situation Investment

• Active/Passive
• Public/Private
• Establish possible investment size/structure (if not already done)
• Establish likely investment timeframe
• Balance within portfolio/cashflow outlook

Due diligence:

This will vary in scope and detail depending on the investment size, time constraints and categorisation of the investment. Detailed due diligence may happen post agreeing a basic investment framework in which case higher level reviews will occur before embarking on full due diligence.

Mining Due Diligence checklist

The majority of potential active or project investments are earlier stage investments. Therefore, due diligence tends to focus (although not exclusively) on the following areas: 

Country & Political

• Political, social and economic stability
• Supply chains
• Industrial relations
• Insurance
• Regulations/legal (ie. corporate)
• NGOs/Social licence

Property & Mineral Rights

• Adequacy of mining/exploration rights and titles
• Sufficiency of surface rights
• Timelines for permitting/approvals
• Royalties, Agreements & Encumbrances
• Other significant risks/factors
• Environmental Studies (if needed)
• Environmental issues/permits (if needed)
• Operating requirements and plans

Geology, Exploration, & Mineral Resources

• Regional, local, property geology
• Geological model
• (Potential) mineral deposit type – comp analysis
• Historical exploration/review of drill core, geophysical information, geochem etc…

Metallurgy & Mineral Processing

• Review of likely/potential processing/metallurgy depending on stage of the asset.

Infrastructure

• Water access, quality, reliability
• Power access, quality, reliability
• Communications
• Road access
• Labour availability/skills/employment law
• Material shipping/transport logistics
• Local Health, Safety & Security
• Buildings/Structures
• Offsite support
• Other infrastructure

Operating costs

• Estimated analysis of capital/operating costs for comps (locally preferably)

Other key review areas:

• Review of management (desktop/Metal Tiger network)
• Review of financials (where applicable)
• Review of corporate structure
• Commodity market review
• In-house and/or third-party technical review (as needed)
• Management calls/meetings
• Third party feedback (analysts, other market participants)
• Review of existing shareholders and potential attractiveness to new investors – is Metal Tiger at risk of being the sole funder?
• FX concerns

Legal and tax structuring:

• Review of existing legal structure and documents
• Drafting and negotiation of legal agreements
• Tax due diligence and advice on tax structuring where needed/cost effective

Investment approval:

• Formal investment recommendation
• Board approval
• NOMAD approval

Completion of investment:

• Completion of documentation
• Market announcement

Post-acquisition management

• Regular calls / meetings with management
• Actual vs expected performance
• Portfolio balance/NAV valuation
• Commodity outlook
• Jurisdiction monitoring
• Ongoing monitoring of technical results
• Ongoing review of investee management performance/financial results
• Exit strategy (M&A, IPO, share disposal)
• Regular internal WIP meetings