A combination of undervalued assets and

the promise of high returns means that pri

the mining industry. In 2013, the estimated

amount of private capital raised was over

$10 billion to be directed at the mining sector,

yet few deals of significance occurred.

While private equity firms are slowly

learning about the risks and rewards of the

mining industry, mining companies often

perceive private equity funds as debt pro

firm Resource Capital Funds (RCF). Another

misconception is that private equity funds

are vulture funds. “In reality, we are looking

for good assets managed by talented teams

that have the ability to shepherd projects

through the various stages of development,”

said Thomas.

RCF has made investments in Noront

Resources and First Nickel in Ontario, and

David Thomas sits on Noront’s board of di

private equity investments. Waterton Global

Resource Management, a Toronto-based

private equity firm, dedicates a significant

amount of time and capital to developing a

mining asset.

The company recently raised $1 billion

for a fund designed to invest in precious

metals. “When we set out in June 2013

to establish the fund, our target was $750

million; however we quickly saw that high

quality investors from around the world

were coming to us as the mining space

continued to worsen, making the opportu

partner and CIO of Waterton.

With a $1 billion fund in hand, the industry

may expect to see a number of investments,

but Isser Elishis countered the

idea that there are currently a lot of quality

assets available at distressed prices. “When

it comes to booms and busts for commodity

prices, many companies end up cutting

back on development and high grading their

assets,” said Elishis. “When we look at what

has happened over the last two years in the

market, the valuation of a company relative

to where it sits today is not distressed.”

Private equity may eventually become

an important element in financing mining

projects in Ontario, but there are some improvements

that need to take place in the

regulatory framework and on the infrastructure

side to unlock the true value of some

of the deposits, according to Ben Gibbons,

vice president, corporate finance at accounting

firm Collins Barrow Toronto LLP.

“While there are a number of significant as

are solved, private equity participants will

gain interest in the market.”

Michael White, president of Torontobased

financial house IBK Capital, believes

the province has allowed its collective passion

for producing metals to wane over the

last hundred years, especially in Ontario.

“The province was a frontier for metals and

mine development – we wrote the book on

many different mining techniques and have

built up service industries around that, all

the way up to our capital markets, which

were founded on mining,” he said. “Many

Ontarians do not understand the signifi