About Us

Investment criteria and procedures

Investment Criteria

When evaluating investments, Strata focuses on opportunities that fall within one or more of the Core Investment Opportunities checklist below:

  • Significant discovery potential – pre or post discovery
  • Country/ district/ first mover advantage
  • Commodity price dislocations
  • Potential for economic resource growth
  • Financial restructuring opportunity
  • M&A opportunity
  • Macro/micro economic trading opportunity
  • Liquidity
  • Operational improvements
  • Cost dislocations

Origination:

Externally Sourced

 

Internally Sourced

Strata network

 

In-house research

  1. Technical contacts/consultants
  2. Brokers/Investment Bankers
  3. Corporates
  4. Co-investors
  5. Other industry contacts

 

  1. Desktop research
  2. Bloomberg terminal
  3. IRESS
  4. Technical papers
  5. Licence checks (where available)
  6. Industry publication subscriptions – Mining Journal and Mining News

Industry Conferences

 

 

 

Phase 1

Quick review of opportunities depending on six high-level criteria:

Commodity, technical merits, jurisdiction, management team, possible investment size (if available), co-investors/existing investors.

Phase 2

Does it fit the opportunity ?

  • Significant discovery potential
  • Country/district/first mover advantage
  • Application of improved exploration techniques
  • Exploration value uplift potential/brownfields
  • Financial restructuring opportunity
  • M&A opportunity
  • Macro/micro economic trading opportunity


Or is it a special situation opportunity?

Where does the investment and its assets sit on the development curve?

Phase 3

Categorise investment opportunity:

Core Investment Opportunity vs Complementary Investment Opportunity

  • Active/Passive
  • Public/Private
  • Establish possible investment size/structure (if not already done)
  • Establish likely investment timeframe
  • Balance within portfolio/cashflow outlook

Phase 4

Due diligence:

The level of scope and detail will depend on the investment size, time constraints, and categorization of the investment. In some cases, a basic investment framework will be agreed upon before detailed due diligence is conducted. This may involve higher level reviews prior to embarking on full due diligence.

Mining Due Diligence checklist

The Board may grant discretion to a certain amount to management, and Strata’s due diligence process tends to focus (although not exclusively) on the following areas:

Country & Political

  • Political, social and economic stability
  • Supply chains
  • Industrial relations
  • Insurance
  • Regulations/legal (e., corporate)
  • NGOs/Social licence


Property & Mineral Rights

  • Adequacy of mining/exploration rights and titles
  • Sufficiency of surface rights
  • Timelines for permitting/approvals
  • Royalties, Agreements & Encumbrances
  • Other significant risks/factors
  • Environmental Studies (if needed)
  • Environmental issues/permits (if needed)
  • Operating requirements and plans


Geology, Exploration, & Mineral Resources

  • Regional, local, property geology
  • Geological model
  • (Potential) mineral deposit type – comp analysis
  • Historical exploration/review of drill core, geophysical information, geochemistry etc.


Metallurgy & Mineral Processing

  • Review of likely/potential processing/metallurgy depending on stage of the asset.


Infrastructure

  • Water access, quality, reliability
  • Power access, quality, reliability
  • Communications
  • Road access
  • Labour availability/skills/employment law
  • Material shipping/transport logistics
  • Local Health, Safety & Security
  • Buildings/Structures
  • Offsite support
  • Other infrastructure


Operating costs

  • Estimated analysis of capital/operating costs for comps (locally preferably)


Other key review areas:

  • Review of management (desktop/Strata network)
  • Review of financials (where applicable)
  • Review of corporate structure
  • Commodity market review
  • In-house and/or third-party technical review (as needed)
  • Management calls/meetings
  • Third party feedback (analysts, other market participants)
  • Review of existing shareholders and potential attractiveness to new investors – is Strata at risk of being the sole funder?
  • FX concerns

Phase 5
(often in parallel with Phases 2-4)

Legal and tax structuring:

  • Review of existing legal structure and documents
  • Drafting and negotiation of legal agreements
  • Tax due diligence and advice on tax structuring where needed/cost effective

Phase 6

Investment approval:

  • Formal investment recommendation
  • Board approval/ discretion levels

Phase 7

Completion of investment:

  • Completion of documentation
  • Market announcement


Post-acquisition management

  • Regular calls / meetings with management
  • Actual vs expected performance
  • Portfolio balance/NAV valuation
  • Commodity outlook
  • Jurisdiction monitoring
  • Ongoing monitoring of technical results
  • Ongoing review of investee management performance/financial results
  • Exit strategy (M&A, IPO, share disposal)
  • Regular internal WIP meetings

Equity Investments

Royalty Investments