AEON Metals drilling in Queensland. Credit: Aeon Metals

AEON Metals drilling in Queensland. Credit: Aeon Metals

Hamish Collins: Nathan Tinkler's Top Dealmaker

Issue 85, May 2014

The mining markets have bottomed and are due to “turn and head north”, Hamish Collins, former top dealmaker to coal boss Nathan Tinkler, told Global Mining Observer in a rare interview this week.

“We’ve been bouncing around at the bottom for 2 years now,” Collins says. “The problem is, no-one’s got any money or scrip, because everyone’s share prices have been hammered so badly. It’s a big impediment to deals.”

Collins spent 12 years in investment banking until 2008, when Tinkler sold a 10 per cent stake in Macarthur Coal to steel group ArcelorMittal for $423m and offered Collins the mandate of sourcing deposits, leading to a spending spree that struck the bottom of the market.

“No-one’s exploring,” he said this week, “so the supply side starts diminishing. Once that happens, something has to snap and that means commodity prices going up.”

His association with Tinkler ended in a legal dispute that Collins is restricted from discussing, but in April he bought the 58m tonne Walford copper deposit in Queensland from Tinkler’s administrators for his new vehicle, ASX-listed Aeon Metals.

Aeon paid A$1, plus A$7m in equity and the assumption of A$20m in debt. “They offered vendor finance to a number of people,” Collins says, “but we’re a similar business: an exploration company looking for base metals in Queensland, so it’s quite a nice bolt-on.”

Like Tinkler, who has always flipped deposits before bringing them into production, Collins says the “big money” in mining is in calling the market bottom, buying large deposits when financing fears outweigh the market’s appetite for tonnes in the ground.

He downplays the risks associated with trying to time the cycle and likens the Walford deal to a 3-year option: the debt is non-recourse with interest payable at the end of the 3-year term, so if markets do not improve, Aeon Metals can “hand back the assets.” If markets do improve, he expects warrants to cover half the principal.

“I’m not too concerned about the share price,” he says, “because over time, people will realise what’s there. I’m a big bull on the copper market. Its not like big coal seams or mountains of iron ore. Grades are going down and its hard to find.” 

“Over time, people will realise what’s there.”

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