9 June 2023
The Insider: Meet the Fund Manager sessions are a great way to hear directly from leading fund managers. They share their approach to investing, favourite companies and their market view for the year ahead.
One of Australia’s oldest mines is set to return to the ASX. The company bringing the ~150-year-old CSA Mine (CSA) back to its home ground is Metals Acquisitions Limited, a US-based special purpose acquisition company (SPAC). In doing so, it is being slated to provide the kind of mid-tier copper exposure much awaited by Australian investors.
Copper is considered a bellwether for the health of the wider economy considering its plethora of applications across multiple industries and its criticality as a transition metal. Despite the metal’s underlying importance, Australia is found wanting for pure-play copper producers – compounding a considerable gap in the sector.
Speaking on Reach Markets’ The Insider: Meet the Fund Manager in May 2023, Jeremy Bond, Chief Investment Officer at Terra Capital recognised Metals Acquisitions Ltd (NYSE: MTAL) as one that could fill that gap and one of his favourite stocks to boot. He also discussed mining’s changing landscape and why the world needs more copper mines. Watch the full The Insider: Meet the Fund Manager session.
Mr Bond noted Metals Acquisition as a ‘funny one’. “It’s a SPAC (laughs) which is not something I’d have ever invested in to be honest in the resource fund,” he said referring to Terra Capital’s wholesale Natural Resources Fund which typically invests in mining and energy companies. As at May 2023, the fund had yielded 23.4% net returns per annum over a three-year period.
Metal Acquisitions caught the attention of Terra Capital and Jeremy Bond for two correlated reasons: the idea that the business has brought CSA from mining giant Glencore back to Australian investing territory; and the particular ‘dearth of options’ for Australian investors within copper mining.
On 15th June 2023 Metals Acquisition completed the acquisition of Cobar Management Pty Ltd, the company that owns and operates CSA, for the consideration consisting of US$1.05 billion in cash and US$50 million of common equity of Metals Acquisition, which gives Glencore a 20.6% stake in the company.
“What’s important here is, [CSA] is an old asset for sure, but it’s super high-grade…it’s one of the better assets in Australia,” Mr Bond said. “It’s still producing very high-grade copper, it’s producing a beautiful concentrate. I think maybe Glencore hadn’t given it the same love that the new management team will.”
Metals Acquisition CEO Michael (Mick) McMullen is held in high-regard by Mr Bond. As CEO of Stillwater Mining, Mr McCullen was instrumental in increasing the company’s market cap from US$1.3 billion to US$2.2 billion. During his seven-months as CEO of Detour Gold, he took the company’s market cap from CA$2.1 billion to CA$4.9 billion, prior to its acquisition by Kirkland Lake Gold in 2020.
“We think if we can bring down a new management team with a new asset for people in Australia to own we think [investors] will be pretty inquisitive,” Mr Bond said, citing Oz Minerals’ recent sale to BHP leaving investors with only two large-scale producers to choose from – presumably BHP and Rio Tinto.
“I believe [Metals Acquisition] could quite easily become that mid-tier copper exposure that many people want,” he said, hinting at the possibility of the company’s stock attracting a premium in the Australian market.
Metals Acquisition has appointed Barrenjoey Markets and Canaccord Genuity as joint lead managers to support its listing on the ASX which, by Mr Bond’s estimation, would occur within the three months of the CSA Mine deal closing with Glencore.
Click here to view more videos from Jeremy Bond’s The Insider: Meet the Fund Manager session.
Reach does not assume responsibility for the accuracy or completeness of any information provided, and the views expressed are not reflective of Reach Markets’ position. Any advice contained within this presentation is general advice and does not consider your personal circumstances, you should consider whether it is appropriate for you.
The information we are giving you is for educational purposes only. “Investing is about understanding your risk” and every time you invest in the share market there is a risk of loss.
Past performance is not a reliable indicator of future performance.
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Past performance is not a reliable indicator of future performance.
The CEOs of all the companies chosen as Fund Manager favourite stocks are invited to present at our Meet the CEO series. Reach does not assume responsibility for the accuracy or completeness of any information provided, and the views expressed are not reflective of Reach Markets position.
Any advice contained within this presentation is general advice and does not consider your personal circumstance, you should consider whether it’s appropriate for you.
The information we are giving you is for educational purposes only. “Investing is about understanding your risk” and every time you invest in the share market there is a risk of loss.