UK-based CD Capital acquires Australia's Verdant Minerals
CD Capital, a natural resources and mining-focused private equity firm based in the UK, has agreed to acquire Australian mining operation Verdant Minerals in a deal that values the company at A$40.5 million ($28.6 million).
According to a regulatory filing, CD Capital will pay A$0.032 for all shares in Verdant other than those held by Australian conglomerate Washington H. Soul Pattinson (WHSP), which currently holds a 33% stake. Following the purchase, the company will be delisted, with WHSP retaining its interest.
The share price represents a premium to the A$0.015 closing price of March 8, the last trading day before the announcement. Following the announcement the share price opened at A$0.029 on March 11; it was trading around A$0.03 in the afternoon of March 12.
Verdant was founded as Rum Jungle Uranium in 1950 to operate the Whites Mine in Australia’s Northern Territory, which produced uranium, copper, and lead. The company changed its name to Rum Jungle Resources in 2010. It adopted its current name in 2016 following the discovery of the Ammaroo Phosphate deposit and a shift to focus on minerals such as phosphate, potash, and silica.
In its most recent annual report, Verdant recorded revenue of A$83,000 for the 12 months ended June 2018, down from A$227,000 the year before. Over the same period, its net loss shrank from A$3.1 million to A$2.7 million.
The company attributed the loss to expenses associated with exploring potential mining locations, combined with delays in securing the necessary agreements to develop its current projects. The CD Capital investment – along with a short term loan facility of A$800,000 from the PE firm – is expected to provide Verdant with the necessary capital to bring the Ammaroo project to production and return the company to profitability.
CD Capital is investing from its third natural resources fund, which closed in 2016 at $335 million. The fund targets metals and mining assets at the growth equity stage worldwide, with a focus on projects in Latin America.
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