Two of the biggest names in Australian mining join SPAC frenzy

Two of the biggest names in Australian mining have thrown their weight behind a star-studded special purpose acquisition company (SPAC) in the United States under plans to acquire copper and battery minerals assets (reports The Australian Financial Review
16th July 2021
Resources Rising Stars

Former Northern Star Resources talisman Bill Beament and former Fortescue Metals chief executive Nev Power have joined Glencore director Patrice Merrin in “Metals Acquisition Corp”; a SPAC that filed its prospectus with the United States Securities Exchange Commission (SEC) this week.

SPACs are listed shell companies with no business activity that raise money with the sole purpose of making future acquisitions and Metals Acquisition Corp hopes to raise up to $US287.5 million ($384.3 million) ahead of a likely listing on the New York Stock Exchange.

The company’s plans were outlined to a small number of potential Australian investors this week and comes after a year in which government stimulus and cheap debt drove a proliferation of SPACs in the US.

While Mr Power and Ms Merrin are directors of the new SPAC, Mr Beament is listed in this week’s prospectus as an “advisor”.

That advisory role continues a big year of change for Mr Beament, who drove Northern Star’s $5.76 billion acquisition of Saracen in October, announced his shock departure from the merged entity in February, and then became the biggest shareholder in ASX listed copper explorer Venturex.

The new SPAC has strong links to Venturex, with Venturex director Mick McMullen set to be chief executive of the new vehicle.

Mr McMullen is also an adviser to the privately held US resources company, Black Mountain Metals, which owns Western Australia’s Lanfranchi nickel mine.

Black Mountain founder Rhett Bennett was listed this week as a director of the new SPAC.

The prospectus makes clear the SPAC intends to capitalise on the “once in a century” opportunity created by the decarbonisation of the world’s economy.

“Major government initiatives are being rolled out to curb GHG (greenhouse gas) emissions, in some cases banning internal combustion engine vehicles altogether, through the electrification of transportation and its surrounding ecosystem,” said the prospectus, naming copper, nickel, lithium and cobalt as likely to benefit from the trend.

“These sectors are currently undergoing what is best described as a once in a century transition that will create value-accretive ripple effects across several core areas, including the mining and metals sector.

“An additional opportunity that has arisen within the mining and metals space, driven by global macroeconomic events, is based in gold and precious metals. These metals are set to benefit significantly from the large amount of Quantitative Easing that is occurring and expected to continue globally.

“Recently, prices for precious metals have eased considerably due to the rapid global COVID-19 inoculation drive and heavy investment in infrastructure development. These factors may create potential value opportunities for the near term as the major global economies continue to grapple with interest and inflation levers. In addition, the precious metals industry remains highly fragmented and in need of meaningful consolidation.”

Like most SPACs, the funds raised will be returned to shareholders if an acquisition is not successfully executed within two years.

Mining industry heavyweights Robert Friedland and Sir Mick Davis have topped the list of investors getting involved in SPACs as a way of buying mining and energy assets.

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