- Focus on rarer metals like cobalt, titanium, niobium and tantalum
- Dealflow likely to be rapid
- Initial focus on Africa, widening to North America in due course
What Critical Metals does
Critical Metals Plc (LON:CRTM) plans to build up a portfolio of assets focused on more exotic metals, rather than the usual suite of base or precious metals that you find inside any standard diversified miner.
But whereas in most cases companies that are interested in the more exotic metals tend to stick with just the one and make a speciality out of it, the idea that Critical Metals will build a portfolio across several different commodities is likely to make it stand out from the crowd.
Strategy tailored for new economic paradigm
The thinking is straightforward enough.
With new trade barriers going up all the time and with the coronavirus highlighting the fragility of crucial supply lines, the Western World is now asking itself where exactly it gets its supplies of cobalt, niobium, titanium, tantalum, tin, niobium and copper from?
The answer, in many cases, is from jurisdictions that are less than salubrious and which in many
Critical Metals will secure supplies of crucial commodities in secure jurisdictions.
Dealfow likely to be rapid
As it stands the company doesn’t have any assets at all – it listed on London in September 2020 as a shell, with cash in the bank and a plan, as is allowed under the listing rules. Listing rules also state that for a vehicle set up like this a deal has to be done within a certain amount of time.
But the company’s had several potential transactions on the boil for some time, all waiting for the listed vehicle to make its entrance stage right and to provide them with a home. Initially, most of the assets that will come into the company are likely to be situated in Africa, but in due course the company will likely add a suite of North American assets to its portfolio too.
From chief executive Russell Fryer
“Over the next two-to-three years we’ll do three or potentially four transactions,” says Fryer.
“Allowing that some projects will be polymetallic that will likely bring us in between six and eight streams of EBITDA, such that by year three we want to be paying a dividend.”
At the same time, Fryer also knows that in making such statements he’s giving himself a lot to live up to.
“What I don’t want to do is feel like I’m kicking up a storm,” he says.
“I have a lot to prove in the UK market, and that drives us to get something done rapidly.”