MetalNRG plc (LON:MNRG) Chief Executive Officer Christopher Chadwick caught up with DirectorsTalk for an exclusive interview to discuss his background and his role within MetalNRG, the acquisition of CMO, who Orion Resource Partners are, and the name change to Atlas Metals Group.
Q1: Chris, could you tell us first a bit about your background and the role that you’ve now taken at MetalNRG?
A1: I’ve been involved in the mining space from 2009 in South Africa, both as the Chief Executive Officer of a company called Gold One International, which were listed in Australia, as well as Johannesburg, as well as a Board member of Sibanye-Stillwater. So, I was involved with those two companies through to 2017, and then left Sibanye-Stillwater and Gold One with the view of creating other consolidation vehicles across Africa in the gold space, as well as precious metals.
We set up a couple of vehicles, set up a SPAC in New York, where we raised $400 million in that vehicle, as well as a royalty company in Abu Dhabi, and was just looking at various opportunities internationally.
Took the opportunity to move back to the UK, this is about three years or so ago and set up a private company here where we were looking at some of the smaller opportunities and projects predominantly across Africa. I was fortunate enough in September of last year, to be invited to join the board of MetalNRG, on the main Board, and looking for projects and looking for looking for some management.
So, joined in September, and we looked at various projects that we had within our portfolio and bringing the first project to market is always is always critical. We were looking for a strong producing asset, preferably in copper, and definitely in a good jurisdiction in Africa. As we were aware, Morocco is a very good country in terms of the ability to do business, and especially in the mining space.
So that’s just a bit of background as to where we got here.
Q2: As you’ve mentioned, just you’ve announced the acquisition of a copper producing mine in Morocco, CMO. Could you tell us more about CMO and how the transaction has been structured?
A2: So CMO, it’s a copper producer in Morocco, it’s been in production since 2014. It’s cash flow positive, and with strong earnings, owned by the Managem Group, which is a very reputable mining company in in Morocco. In fact, it’s the largest mining company in Morocco.
So, Managem themselves were going through a repositioning, focusing on far larger tier one assets and because of that, decided to start disposing of some of their non-co-assets. Given the fact that this is the fourth asset that management have sold in Morocco in 95 years, we were in the fortunate position that they trusted us to take the project forward.
The transaction itself is 100% acquisition. It’s being funded predominantly through Orion, which is an $8 billion asset management company with a specific focus on mining, Orion are putting up $25 million of the acquisition funding through a convertible structure. I’ll come back to that shortly.
The balance of the purchase consideration, we’re in discussions with various strategic investors, bringing them in before the RTO. The RTO is necessary just because we’re fundamentally changing the size of MetalNRG, and because of that, it requires a relisting on the on the main board. So, that comes with a prospectus and CPR and all these good things when you’re looking to list a mining company, all of which are well underway, and all of which will be available to the public in due course.
Coming back to the financing structure on the asset, we decided on convertible note, we looked at various funding structures but felt that the convertible loan note structure that we’ve put in place was the was the most appropriate, not just for the project itself, but also for existing and future shareholders.
It’s been structured very carefully and we, along with Hannam Partners and Orion, all the time looking at various structures, and again, whether you’re putting something together, which was appropriate, and going forward we’ll not have overly dilutive shareholder value.
So, again, we’re very happy with the transaction structure, we’re dealing with the absolute world-class advisors and funders internationally, and so we’re in a very good space.
Q3: You mentioned Orion Resource Partners earlier, and you said you’d come back to them, could you tell us more about them?
A3: So, it’s an $8 billion management company, they run various mining funds and they, at the moment, are focused on emerging markets and have a strong priority for copper, for copper assets.
So I’ve been working with Orion for many years, and we’ve been working together on a number of transactions, and s, we know each other very well and we look for ways to partner together. So, it’s a long-term relationship, Orion will look to look to fund us, not just in this transaction, but potentially transactions going forward as well so we’re in a very, very fortunate position.
In terms of the Managem process and who they were looking to sell this asset to, they were looking for i) a strong management team that had a track record of operating sustainable assets across Africa, and ii) the introduction of Orion into Morocco, which, given the opportunities that exist in country, is a big deal for both parties.
Q4: You mentioned earlier in RTO, you’re changing the name to Atlas Metals Group. Does that also mean, and I think you’ve just answered this a minute ago, that you’re planning further acquisitions in due course?
A4: Yes, we are. It’s been important that we reposition ourselves from MetalNRG, this is effectively a new listing, it’s a new management team with a new strategy and a new project, which we bring into the market.
So, in the short to medium term, we’ll be looking at other opportunities, specifically in copper, across Africa, but in really strong jurisdictions, with the view of over the next couple of years, building mid-tier operating company wit, 5-6 operations within the portfolio.
So that’s what we’re looking to do, and Atlas Metals Group, Atlas, has a nice ring to it, it is the mountain range in Morocco and so the name was thought up during a drive to site. We’ve secured AMG as our stock ticker on the London Stock Exchange, which would be nice as well.
