A generational investment opportunity

The world is moving rapidly towards a vast supply shortage of the critical metals required for the green energy transition. Infrastructure electrification and the energy use of the back of the AI revolution are the two megatrends driving demand.

Take copper for example, where demand is expected to double between 2022 and 2035, going from 25 to 50 million tonnes per year.

But supply is actually decreasing. While 120 new copper mines were found in the 1990s, only 12 new major copper discoveries were made in the recent decade – less than a tenth of the required amount estimated by BHP.

Copper, the electrification metal, is facing a vast supply gap soon (source Adobe)

A key reason behind this is that the existing exploration model is broken.

Majors have virtually ceased greenfield exploration, getting their new projects via M&A instead. However, the juniors have not filled this gap because exploration is risky and requires talent, capital, networks and access. Red tape is a major issue – it takes over 20 years in the US to get a mine permitted.

The consequence is that the new project pipeline for the majors is rapidly drying up. For the real economy this ultimately means higher metals prices, supply shortages and a delay in the large-scale electrification efforts global governments have committed to.

Anticipating this as a generational investment opportunity four years ago, MDF Global has developed a platform model that reimagines mining exploration. By combining centralised, world-class specialists with a capital-light structure, they systematically build, scale, and multiply metals projects.

This model follows a continuous cycle: originate, create value, monetise, and reinvest – returning capital to both the platform and shareholders.

MDF’s new model for exploration

MDF’s model differs vastly from the traditional capital-heavy-data-poor exploration model.

The business brings together geologists credited with discoveries worth over A$100 billion in planned or executed production, as well as highly experienced mining dealmakers who can play the full value chain of mining from greenfield to production.

MDF’s mission is to solve the metals supply shortage and become the largest pure-play exploration company on the planet.

To do this, the team uses proprietary AI technology to scour through thousands of opportunities to find the best prospects. It’s a global top-down approach where they first narrow in on a region (or ‘hub’) to build a portfolio by originating projects from scratch or acquiring them.

AI is exciting because it helps MDF’s team to process vast amounts of information but the key to winning is the proven geological experience and also the ability and networks to acquire the land.

The model is similar to Kobold Metals, a US company backed by Bill Gates, Jeff Bezos and legendary VC fund Andreessen Horowitz which raised funds at a valuation A$4.7 billion earlier this year.

Kobold combines AI and geological experience to find the metals of the future. Its portfolio includes two projects in Africa which, while not yet having a resource estimate, have clear indications of being large tier-1 assets.

Bill Gates and Jeff Bezos have invested in Kobold Metals, a more capital heavy version of MDF, most recently valued at A$4.7 billion (source BW Africa)

Obviously, Mr Webb has been following Kobold closely:

“Kobold and MDF are running very similar models — combining AI, top-tier geoscientists, and global reach to systematically discover new economic metal deposits. We’re both building scalable, technology-enabled platforms in an industry that desperately needs them. The key difference right now is valuation — they’re valued at A$4.7 billion, and we’re at A$70 million.”

Joe Webb, Co-founder & Managing Director, MDF Global.

The outcome of MDF’s approach has been impressive – including a near-production antimony mine and the largest exploration land deal of its kind in history.

An impressive four-year track record

MDF started its model four years ago and have since had tremendous success in their first hub, Alaska.

With only A$15 million in total invested they have already created a portfolio of 25 projects, four of which are moving into feasibility studies.

One example is Felix Gold, which MDF founded and seeded from scratch before listing it on the ASX. Since inception Felix has not only built a 831 Koz gold resource next to an ore-hungry Kinross Mine, it has also made an exceptional antimony discovery which features 5 of the global top 7 near-surface antimony intercepts ever recorded according to S&P Global.

Felix is targeting production as early as the end of this year which at current antimony prices could lead to a substantial cash flow. The company’s market cap is currently around $70 million but a production start could rerate the business into the hundreds of millions.

Even though MDF only put minimal seed funds into Felix, it still owns 11% after handing an 8% stake to MDF shareholders. If Felix gets into production next year, this could lead to significant potential cash flows and returns to MDF.

Clearly visible – Felix features 5 of the global top 7 antimony intercepts (source Felix Gold)

A second example is Copper Bay, whose Pyramid copper project already has an existing resource with over A$7 billion of contained metal value. Based on this alone, the project has the credentials to be a future mine and defined pathways to production at a targeted rate of 50 ktpa – which could put it among the 10 largest copper projects in the US.

MDF secured the project in partnership with traditional owners and is looking to advance the asset and sell or list it this year.

But their biggest success yet – and also the most exciting growth driver going forward – is the Critical Metals Alliance which is an unprecedented exploration deal in both scope and scale.

Largest land deal of its kind in history now supercharging MDF’s model

Last year MDF announced that it had secured the largest exploration land deal of its kind in history. This is both proof of their pedigree and the major opportunity for their future growth.

Under a fully funded program for up to US$50m, the Critical Metals Alliance (CMA) deal gives MDF access to up to 10 million acres of underexplored Alaskan land that has been out of reach for explorers for decades.

MDF also gains access to large amounts of historical data, worth tens of millions of dollars and priceless in the hands of their skilled team, from mining companies that were exploring in the area half a century ago.

The deal is funded by strategic investors, including well-known Australian mining billionaires, and is in partnership with traditional landowners. MDF Global provides the experience and their IP in return for 30-50% of the upside via carried interest, again proving their capital light model.

A historical deal with traditional landowners – MDF’s ultimate proof of concept and scaling opportunity (source: MDF)

For Mr Webb, this is the ultimate proof of concept and opportunity alike:

“To strike a deal like this, you need the networks and pedigree to get the traditional owners to trust you with their land and strategic investors to trust you with their money – and we demonstrated this. The land and data access we will get now is key for our geologists to run their AI models and select the prospects with the highest chance of success. This unlocks the future for MDF and is a blueprint for other hubs across the globe”. 

For the next five years, they are targeting the creation of 10 new projects from this deal. If just one tier-1 project could be found, this could be a major success for MDF shareholders.

And if that’s not enough, the team have spent the last two years preparing for their next hub – Chile – which is the world’s main source of copper and also has all the regulatory ingredients to possibly become another CMA-like deal.

Potentially the last capital raise

MDF is looking to raise capital – potentially for the last time.

According to Mr Webb, once the portfolio has matured to a stage where it starts to ‘spit out’ cash through royalties, dividends and the sale of assets, the model will likely become self-funded. At that stage one part of the proceeds could go to investors and another part into originating and progressing portfolio projects.

“The goal here is to build a golden goose for our investors – a company that spits out cash while creating and advancing new projects. That’s what we are aiming for.” Joe Webb, Co-founder and MD of MDF Global

This wholesale capital raise is an opportunity to invest alongside some of Australia’s leading mining billionaire families. Click here to request the offer documents (Wholesale Investors only).

Reach Markets provide Corporate Advisory Services, including managing investor communications to MDF Global Limited and will receive fees for its role in managing this offer based on the uptake by investors.

Reach Wholesale Nominees Pty Ltd ATF Wholesale Holdings MDF Trust and Reach Investment Group Nominees Pty Ltd ATF R Markets Unit Trust, related entities of Reach Markets, hold stock or shares in MDF Global Limited.

Past performance is not a reliable indicator of future performance.