Lions Bay Capital

Developing Portfolio of High-Growth Potential Mining and Energy Generation Assets

This profile is part of a paid investor education campaign.*

Overview

Lions Bay Capital Inc. (TSXV:LBI) is a strategic investor in the junior resources sector. Whilst the company recently listed on the TSX venture exchange in November 2017, the founders and management have established a proven business model and have a successful track record in the sector.

Lions Bay Capital typically acquires activist stakes in companies that meet strict investment requirements and adds value by providing advice on financial and strategic issues, as well as leading restructuring of undervalued assets, as appropriate. To this effect, the company has established five pillars of investment: battery metals, precious metals, tin, brine minerals and power technology. Within these industries, Lions Bay Capital is typically focused on opportunities where the company can catalyze corporate restructuring and business combinations led by successful management teams. Lions Bay has already established a portfolio with strategic positions in several listed companies as well as a position in several fast growing private companies.

In 2017, the team behind Lions Bay Capital played a pivotal role in the transformation of ASX-listed Jervois Mining (ASX:JRV), helping to advance it from a market capitalization of approximately $5 million, into one of the leading near-term cobalt nickel appraisal companies. During the course of a successful turnaround and transition to a new management team with proven experience in bringing cobalt and nickel projects to production, the market capitalization of the company expanded beyond $100 million. Following the leadership transition, Lions Bay Capital retains a strategic position in Jervois Mining valued at approximately $3 million.

More recently, in early 2018, Lions Bay Capital initiated the restructuring of Montan Mining (TSXV:MNY;FSE:S5GM;SSE:MNYC) and is currently repositioning the company for near-term value creation from both new opportunities and Montan Mining’s existing assets including the Cerro Dorado gold processing plant, and associated Rey Solomon gold mine, in Peru. Lions Bay Capital holds 45.33 percent of the company and is working closely with Montan Mining to successfully recommission the Cerro Dorado plant and expand the project portfolio. Following the restructuring, Lions Bay Capital became a control person of Montan Mining and currently owns in excess of 40 percent of the company, leading a near-term recapitalization initiative.

In addition to the positions in Jervois Mining and Montan Mining, Lions Bay Capital also holds several additional strategic investments in promising mining companies, including 12.5 percent of Eurotin (TSXV:TIN), which recently agreed to sell the advanced stage Oropesa tin orebody in Spain to Elementos Ltd (ASX:ELT). Lions Bay Capital plans to also increase its stake in Elementos so as to own a material interest in the project. Lions Bay Capital is also at the advanced stages of finalizing the acquisition of the remainder of Consolidated Potash Corporation (CPC) and the ownership of Activated Technologies’ aMES™ technology platform, and has a 3.78 percent stake in power technology company Kalina (ASX:KPO).

Company Highlights

  • Target of over 25 percent growth per annum with a potential $30 million to $50 million portfolio by 2020.
  • Strategic investor in junior resources sector providing advice on financial and strategic issues and leading restructuring of undervalued assets.
  • Helped develop Jervois Mining from $5 million market cap to $100 million market cap.
  • Flexible investing approach to ensure ability to participate in outstanding opportunities identified or developed by management and/or associates.
  • Deep industry experience and extensive network to identify strategic investment opportunities.

Company Holdings

As part of their investment strategy, Lions Bay Capital has identified five pillars of investment: battery metals, precious metals, tin, brine minerals and power technology. To this effect, Lions Bay Capital has identified in companies that show high-growth potential in the near-medium term within these areas.

Battery Metals: Jervois Mining

Jervois Mining is evaluating the potential nickel and cobalt at the Nico Young project in New South Wales, Australia, focused on near-term production. The project has access to regional rail, road, power and gas infrastructure. The project hosts high-grade nickel and cobalt areas with Joint Ore Reserves Committee (JORC) code-compliant inferred resources of 167.8 million tonnes grading 0.59 percent nickel and 0.06 percent cobalt with a 0.6 percent nickel equivalent cut-off.

Drilling at Nico Young Nickel Cobalt project, in NSW, Australia. 

Jervois Mining has recently completed an infill drilling program in early 2018, which was focused on upgrading a section of the resource from inferred to indicated, and on proving up shallow, higher grade cobalt zones that may be amenable to early mining. Currently, an open cobalt resource extension has also been tested and the drilling results are expected later in 2018.

Jervois Mining is conducting a pre-feasibility study (PFS), which will assess the economic advantages of a heap leach project based on current metallurgical data, which indicates there is the potential of commercializing the resource at a lower capital and technical risk than competing process routes. The PFS is being coordinated by leading industry consultants and the Jervois Mining team has been directly involved in the construction and operation of trial heap leach pads at the Murrin Murrin nickel-cobalt operation in Western Australia.

Jervois Mining has also acquired a 4.54 percent stake in eCobalt Solutions (TSX:ECS; OTCQX:ECSIF; FRA:ECO), which owns 100 percent of the high-grade Idaho cobalt project in Idaho, US. The project is the only cobalt property in the US that has environmental permitting, and the company is working on advancing the project towards near-term production, expected to begin in 2020. A 2017 feasibility study showed a 12.5-year mine life with proven and probable reserves of 3.66 million tonnes grading 0.47 percent cobalt.

Precious Metals: Montan Mining

Montan Mining is a precious metals mining company focused on developing its production profile. In January 2017, Montan Mining acquired the Rey Salomon gold mine and toll mill in Southern Peru. The toll mill is currently on care and maintenance with operations expected to restart within 2018.

Montan Mining owns the operation-ready Cerro Dorado gold processing plant, which is adjacent to the Rey Salomon mine. Montan Mining is in the process of securing funding to restart production and intends to restart the mill by the end of 2018 as a toll milling operation. The company expects to be able to process 40 tonnes per day with production increasing to 120 tonnes per day in early 2019.

Ball Mills at Cerro Dorado plant at Rey Saloman gold mine. 

Agitator Tanks at the Cerro Dorado gold processing plant.

Cerro Dorado holds an option and permits to operate the Rey Salomon gold mine which contains two kilometers of underground development and 32 identified veins across four concessions that covers 1,172 hectares. It is the only permitted mineral processing plant in the prolific Atico Valley.

In addition to its work in Peru, Montan is also exploring acquisition and consolidation opportunities to further build its resource base.

Tin: Eurotin and Elementos Ltd.

Lions Bay Capital has a strategic stake of 12.5 percent of Eurotin. Eurotin’s Spanish subsidiary, Minas de Estano de España (MESPA), has been developing the Oropesa tin orebody, of which it owns 96 percent. The company has been completing a definitive feasibility study for the project, with a technical report expected in coming months.

In July 2018, Eurotin announced that it had entered into a binding heads of agreement, under which Elementos Ltd. would acquire all of the issued and outstanding shares of MESPA. Elementos is developing a strategy to build a production base from multiple assets in the tin and base metals industries. Lions Bay Capital plans on developing a material stake in Elementos, and will remain tied to the Oropresa project.

The orebody on the Oropresa property hosts an indicated resource of 9.2 million tonnes at 0.56 percent tin, for 51,700 tonnes of contained tin with a 0.2 percent cut-off. In October 2015, a SRK technical report suggested that the grade in the starter pit is would be higher than the figures in the Oropesa resource. Eurotin has performed extensive flowsheet development to support commercial production of tin with recovery based on both gravity and flotation, using conventional ore processing technology.

Oropesa orebody drill cores. 

In October 2017, Eurotin submitted an application for an exploitation licence for the Oropesa project. Their application covers the technical aspects of the mining and processing of the Oropesa orebody and associated infrastructure, equipment and tailings storage facilities, which are essential in order to build and operate the small 500,000 tonne per year mine. The mine will be an open pit operation which will develop into an underground mine via ramp access.

When developed, Oropesa will be one of the few newly developed tin mines, globally.

Beyond the Oropresa project, Elementos also owns the Cleveland tin project in Australia, which hosts a historic mine that saw 5.65 million tonnes of production at 0.68 percent tin and 0.28 percent copper. The property has a mineral resource of 5 million tonnes indicated at 0.69 percent tin and 0.28 percent copper, and an inferred resource of 2.44 million tonnes at 0.56 percent tin and 0.19 percent copper.

Elementos has also recently entered into an MOU to acquire the Temengor tin project, a major historical tin mining operation in Malaysia.

Brine Metals: Consolidated Group

The Consolidated Group is made up Activated Water Technologies (AWT) and CPC, which is using its affiliate’s aMES™ mineral processing technology to build a portfolio of global potash interests by focusing on the appraisal, development and optimization of potash projects. Lions Bay Capital has recently consolidated ownership of CPC and the aMES™ technology platform.

AWT developed and owns the innovative aMES™ mineral processing technology platform and the technology is being commercialized through secured grants and in partnership with a major Australian university. The technology is suitable for recovery of minerals, reagents and water from aqueous solutions, including industrial and mining waste streams. AWT has licensed the global rights to the aMES™ technology in the potash sector to CPC and has established a substantial business development pipeline beyond potash opportunities.

 

aMES™ pilot plant commissioning 

The aMES™technology has the capability to process output from salt lakes, tailing ponds, solution mining and waste water streams, delivering high-purity products in a range of high-value forms. The outputs of the technology include lithium, potash, reagents (including ammonia and acids) and pure water in a cost-effective and environmentally-friendly manner.

In August 2017, CPC agreed to acquire up to 40 percent of Verdant Mineral’s (ASX:VRM) Karinga Lakes potash project (KLPP) by investing up to $3 million in the project. CPC successfully secured acquisition terms with Verdant by demonstrating the performance advantages of the aMES™ technology as part of a test program that utilized brine and salt samples sourced from the KLPP. CPC has also prepared an internal scoping study to demonstrate that the aMES™ technology can potentially provide substantial capital and operating cost advantages over conventional technologies. CPC is funding the staged commercialization of the aMES™ technology as a way in which to develop the KLPP.

The Consolidated Group is also exploring various business development opportunities in the lithium and potash sectors, as well as in oil well projects.

Power Technology: Kalina Power

Kalina Power owns the patented Kalina Cycle® power generation technology. Kalina is focused on the ongoing commercial roll out of the Kalina Cycle® technology in high value markets to address energy security and sustainability challenges global industries face.

Power generation technology has improved the efficiency of thermal power generation by 20 to 40 percent. The technology is designed to recover wasted heat from industrial operations or to use renewable sources to generate electricity. The Kalina Cycle® technology has been deployed on 15 plants and over $140 million has been invested in the project. The roll-out technology is supported by a platform of strategic partners and Kalina Cycle® technology has a strong foundational intellectual property portfolio with international patents and extensive know-how.

Sinopec Hainan Refinery, site of Kalina Cycle® WHR plant. 

By 2020, Kalina expects to have over 100 electric megawatts of installed Kalina Cycle® operating capacity. Kalina’s management has focused their attention on both the North American and Asian markets, where there are numerous business opportunities to apply the Kalina Cycle® technology.

Kalina is currently conducting engineering and feasibility studies for Kalina Cycle® applications in the North American market in order to enhance the performance and profitability of gas-fired power plants. Kalina has also plans to develop geothermal power plants in Oregon, USA in partnership with a local organization.

Management

John Byrne — Executive Chairman

John Byrne has 40 years experience in the natural resource industry as a financial analyst, investor and mine developer. He formed and mentored Cambrian Mining Plc. in 2002. Cambrian started with net assets of GBP1.4 million and before being acquired in 2008 had net assets of GBP149 million.

Byrne has been Chairman and CEO of numerous successful resource companies, including Western Coal Corp., which was capitalised at less than C$1.0 million when he joined, and was sold for C$3.3 billion in 2010.

Bahay Ozcakmak — Executive Director

Bahay Ozcakmak is a corporate strategy expert with extensive public and private company experience including CEO and director level roles in the technology, energy and resource sectors. His recent experience with resources has been with companies focused on cobalt, gold, lithium, nickel, uranium and potash projects. Bahay is currently a director of Activated Water Technologies and several mining focused companies, including Consolidated Potash Corporation and Montan Mining Corporation.

Ross MacLachlan — Non-Executive Director

Ross MacLachlan has been involved in energy and technology development and commercialisation as an active venture capital investor and executive for over 30 years.

Keshwaran Thurairasa — CFO & Corporate Secretary

Keshwaran Thurairasa has been involved in managing corporate finance and associated public company administration for over 25 years.

Alwyn Davey — VP Corporate Affairs

Alwyn Davey has extensive legal and commercial experience in the management of public companies, including in the technology and resource sectors, for over 20 years.


 

*Disclaimer: The profile provides information which was sourced and approved by Lions Bay Capital in order to help investors learn more about the company. Lions Bay Capital is a client of the Investing News Network (INN). The company’s campaign fees pay for INN to create and update this profile page, to which links are placed on Investingnews.com and channel newsletters.

The company description, investment highlights and catalysts were sourced by INN and approved by the company. INN does not guarantee the accuracy or thoroughness of the information contained on this page.

INN does not provide investment advice and the information on Investingnews.com profile should not be considered a recommendation to buy or sell any security.

INN does not endorse or recommend the business, products, services or securities of any company profiled.

Readers should conduct their own research for all information publicly available concerning the company.