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Heron project fits the bill

WHEN Resource Capital Funds signed a deal early this month to become a substantial shareholder in Heron Resources, the Colorado venture capital company backed its first nickel venture and prepared to add only its third Australian project to its international mining portfolio.

The initial RCF investment in the form of 10 million ordinary Heron shares at 30 cents is significant on a couple of fronts.

RCF’s investment committee chairman Henderson Tuten is chief executive officer of the holding company for the Rothschild family US private equity interests.

And with the exception of the Anaconda placement to Glencore, no big brother investors have appeared in the laterite sector for quite some time.

With a history of backing large projects in small companies, RCF believes Heron’s Goongarrie nickel project fits the bill and is no doubt aware of the Kalgoorlie-based company’s opportunity to be involved in the tender outcome for Centaur Mining’s nearby Cawse nickel processing plant.

RCF’s expertise in capital fund raising will ensure Heron remains a player in any outcome and a potential frontrunner in the rationalisation of the Australian nickel laterite industry.

Heron managing director Ian Buchhorn said the company was already in a position to operate a stand-alone four million tonne per annum plant with ore from Goongarrie, but is waiting to know the Cawse outcome before making production decisions.

“The new owner of Cawse might be someone who wants the plant and wants to use Heron’s ore, or could be a consortium which includes Heron, or might be Heron itself,” Mr Buchhorn said.

“There are all manner of permutations there.”

RCF’s other Australian investments are with Southern Cross Resources, a listed Canadian company building a uranium production plant near Broken Hill, and with Pan Australian Resources, to fund an interest in a Thai copper project.

Due diligence on the Heron deal is planned for completion next month.

Heron has traded between 20 cents and 42.5 cents in the past year and currently has 100, 958, 727 shares on issue.

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Share Price

Closing price for the last 90 trading days
Source: Morningstar

Total Shareholder Return as at 29/06/18

1 year TSR5 year TSR
15thHeron Resources788%-12%
312thMetals Australia25%-19%
473rdEclipse Metals-0%6%
564thBarra Resources-13%52%
722 WA (and selected non WA) listed companies ranked by 1 year TSR relative to other companies with similar revenue
Source: Morningstar

Share Transactions

16/07/18
$13k Bought
29/11/17
$0 Issued
29/11/17
$0 Issued
Total value as at the date of the transaction
Source: Morningstar

Revenue

217th↓Heron Resources$140k
259th↑Metals Australia$56k
260th↓Barra Resources$55k
263rd↑Eclipse Metals$50k
507 listed resources companies ranked by revenue.
Source: Morningstar

Remuneration from Heron Resources

164thWayne Taylor$590k
300thCharlie Kempson$377k
520thSimon Smith$237k
Ranked by total remuneration from all listed WA companies

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