TALVIVAARA in Finland before its recent closure. Photo: Talvivaara

TALVIVAARA in Finland before its recent closure.
Photo: Talvivaara

Dealmaker Julian Treger
in Buy Mode

Issue 120, March 2015

London-listed royalty group Anglo Pacific is not planning to bid for Canada’s Callinan Royalties, but may consider a nickel royalty in Finland, chief executive Julian Treger tells Global Mining Observer.

Treger’s hedge fund, Audley Capital, struck a deal with Finland’s government last week to buy 85 per cent of the Sotkamo assets of failed nickel miner Talvivaara, which entered bankruptcy last year after several major pollution mishaps.

“It has had a very troubled past,” Treger said by telephone. “We’ve done extensive work with technical consultants, all of whom are of the opinion that the problems are fixable, but there will be challenges I’m sure. It’s not going to be a straight road.”

Belgium-based nickel group Nyrstar paid $335m for a nickel stream over the mine in 2010, which it wrote down this week on news of the Audley deal. Treger, a formidable hedge fund manager appointed to Anglo Pacific to escalate its deal flow, said the mine’s grade and scale meant it “should have sufficient margins” to carry a new royalty agreement in the future.

Treger ruled out a bid for copper royalty junior Callinan, but said it was “a good deal” for Anglo Pacific’s lead rival, Altius, which bid C$112m ($90m) for Callinan earlier this month. “We have the greatest respect for [Altius chief executive] Brian Dalton,” Treger said. “We’ve talked about working together on transactions, which are too large for either of us.”

Audley is meanwhile thought to be considering opportunities in coking coal. Treger fought a proxy battle with US-based coal miner Walter Energy in 2013, saying it urgently needed to restructure its debt.

The incumbent board won and shares have since collapsed, as Walter has been forced to roll debt into equity to lessen its interest cost. The company has been threatened with a delisting, but has continued to pursue Treger through Alabama’s courts, accusing him of aggressive trading tactics.

The case was dismissed for the second time last month; Walter’s junior bonds are trading for 10 cents in the dollar. 

“It has had a very troubled past.”

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