“We’ve done 27 deals now,” says Rich Lloyd of NR Private Market (www.nrprivatemarket.com).
“We are flourishing, and we’re making money.”
NR Private Market is an alternative fundraising platform that allows investors direct access to equity financings. To date, much of the business done on the platform has been in the mining sector, although not exclusively so.
The biggest raise done by NR Private Market brought in £1mln, and was actually in the fintech space, there’s an ongoing deal involving spring water from the Amazon rainforest - “our most valuable resource! - and Barton Gold are looking to use the platform to increase investor awareness as UK listed Pensana PLC (LSE:PRE) currently do.
But by and large, the action has been in the mining sector. And there are several reasons for this.
First off the bat, it’s worth mentioning that Rich Lloyd himself is a mining geologist. It’s been a while since he practiced, but mining is a space that’s familiar to him, and that’s important in and of itself. NR Private Market won’t look at any deals that don’t make sense to the people that operate the platform, so it could be argued that on that basis the mining sector gets a head start.
But seasoned players in this space know there’s more to it than that.
Mining exploration is uniquely exposed to the vagaries of the equities markets, in that its activities at the junior end of the market are seldom accompanied by revenues of any kind. At times when equity funding is scarce, mining exploration juniors tend to suffer. However a recent £500,000-plus raise by Marula Mining shows that good companies can still raise equity funding.
But this is nothing new – it’s a dynamic that has been running for decades and decades, and it’s meant that to a certain extent more than other sectors mining financiers are open to new ideas.
Like NR Private Market……
NR Private Market is a service that looks to connect sophisticated and high net worth investors directly to companies looking for money.
The attractions of such an offering are many, not least since NR Private Market already has over 1,350 such investors registered to its platform, and Lloyd’s target is to get that number up to over 5,000.
And - cut out the brokers, cut out the fees, right?
Well, not really.
There is an element of that thinking at work here, but the central point is that NR Private Market is providing an additional - not an alternative - source of funding, and how that source is used is really the prerogative of the issuer.
“We’re not out there to eat everyone’s lunch,” says Lloyd.
“What the brokers and the investment community are realising now is that it’s complimentary.”
He cites as an example the recent funding completed by Cornish Metals, the company that’s looking to reopen the famous South Crofty tin mine in Cornwall and has discovered rich copper mineralisation nearby.
Cornish Metals raised £8.5mln in total, in a fundraising that was largely orchestrated by two well known names in mining finance SP Angel and Hannam Partners. But the crucial point is that NR Private Market brought in the final £500,000, for which Richard Williams at Cornish Metals was very grateful, and that money was from a different pool than the ones being tapped by the old school brokers.
In this sort of scenario everybody wins.
Is it easy? Not necessarily, but one virtue that NR Private Market has is that it can move fast. A recent fundraising done with Oriole Resources completed in about two hours, and the NR Private Market app, which is currently in development, only looks set to streamline the process.
But what’s the dealflow likely to be like, given that the markets aren’t exactly in great shape?
Lloyd paints a picture of lively activity.
“I look at around 15 deals a month,” he says, “and we may only do two. We’ve got to be sure our investor base is going to be excited about them.”
And where’s the interest at the moment?
“Battery metals, copper, and gold,” comes back the reply.
Gold in particular is set for a resurgence, he reckons, following the recent demise of the FTX crypto platform. To Lloyd’s mind, crypto is just a “barcode,” whereas gold has been a base currency asset for the past 5,000 years.
“Mark Bristow recently set US$1,600 as a base level for gold. But I can see it going to US$2,000 or even US$2,750. I think people are going to shy away from the US dollar. I think people are going to be interested in the physical.”
There are two offerings live on the platform at the moment – Optiva Resources and Annamite Resources with Amazon Spring Water’s £50mln IPO in the first quarter of 2023.
It’ll be interesting to see how they get away, and interesting too to see what sort of interest Lloyd can drum up during the mining conference season in London, which is about to get underway.