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.