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Cloudbreak stands out from the crowd as London’s only prospect generator in battery metals and bulks

Cloudbreak took an indirect stake in a Serbian borate project on 22 June, its first transaction post-listing

Cloudbreak Discovery PLC -

Cloudbreak Discovery PLC (LON:CDL) debuted on the Standard List of the London stock exchange a couple of weeks ago, raising £2mln in the process in a fundraising that was heavily oversubscribed.

As a ‘prospect generator’ the company will source and transact on mineral properties, following a business model that’s well-known in Canada, but which is less well established in the UK.

Prior to Cloudbreak’s listing, only one other company in the UK - gold and Africa-focussed Altus Strategies (LON:ALS) - has been actively following the model.

But Altus, it seems, has blazed just enough of a trail to soften up the market for rCloudbreak.

“We had a better reception than we first anticipated,” says Kyler Hardy, Cloudbreak’s chief executive.

“It seems the UK understands the business model – the concept has got traction.”

In particular Cloudbreak has two things going for it.

First off - while there’s a general acknowledgement that the prospect generator model is tried and tested in Canada and that it works, the lack of competitors in the UK market narrows the focus. If UK investors want prospect generators, it’s either Altus or Cloudbreak Discovery.

And that brings us to the second point.

Because while the overall model is similar, the type of projects that Cloudbreak is likely to be transacting on will be markedly different from Altus, which is focussed on the traditional area of precious metals.

Cloudbreak Discovery, by contrast, is looking fully to the future in its focus on battery metals and industrial minerals.

That plays well with investors at the moment, not just because metals prices are doing well, but also because of the prevailing narratives that serve as a backdrop to those strengthening prices – the need to reduce carbon emissions, to build more electric vehicles and more electric infrastructure generally, and to concentrate above all on going green.

As a deal-maker in this space, Cloudbreak was always going to garner significant attention. Especially as this isn’t a company that’s simply starting from scratch. Hardy and his team have long track records of deal-making in the resources space, and the company began day one of its life as a listed entity with several assets already inside the portfolio.

And it won’t be long before there are more.

Hardy reckons that news-flow is likely to come at a fairly rapid and regular pace from here on in. While the timings of any deals - whether they be acquisitions, asset sales or spin-outs - can never be certain, in an ideal world he’d like to be doing around one a month.

“There are a lot of opportunities out there,” he says.

“Once we’ve been able to get back to operating, after this focus on listing, we see a fairly hefty amount of work ahead of us.”

The main focus will be North America for now, although there is also an ambition to build upon a small existing presence in West Africa.

“We’re definitely focussed on industrial metals, aggregates, bulks, iron ore, bauxite and anything that’s consumed day-to-day,” says Hardy.

“We’re deliberately not focussing on gold, but we do include silver as an industrial metal.”

And how does he see the future shaping up more generally?

“I’m really excited about commodity markets,” he says.

“I think we’re coming to the market at a great time, especially with the US proposing to come back into the Paris Accords.”

The summer slow-down is nearly upon us, but don’t expect things to go quiet as far as Cloudbreak is concerned. Already, it's transacted, via a 15.8%-owned subsidiary, on a borate project in Serbia, and there's should be plenty more newsflow to come.

“We’ve got a great chance now to get a lot of news-flow worked up for the fall,” says Hardy.

Watch this space as the momentum builds.

Quick facts: Cloudbreak Discovery PLC

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LSE:CDL

Price: 2.189 GBX

Market Cap: £8.53 m

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Cloudbreak Discovery PLC (LON:CDL) Presenting at the Proactive One2One...

Cloudbreak Discovery PLC is a leading natural resource project generator working across a wide array of mineral assets that are being developed and managed by an experienced team with a proven track record. Value accretion within the projects being developed by Cloudbreak’s generative model...

on 2/7/21

4 min read