Resource Capital Funds, a private-equity firm that invests in mining assets, has hired a syndication specialist to help pull together entire financing packages for miners.
"The real potential value to be created in this market is to be the catalyst to bring the financing, the entire package together," Denver-based Resource Capital partner Ross Bhappu told a mining conference in Toronto on Wednesday.
Joining forces with other private equity firms such as Houston-based Denham Capital Management LP would allow the funds to bring more firepower to the table.
The handful of private-equity firms dedicated to the mining industry are competing with banks and other stock market investors, which are more traditional sources of capital for the mining industry.
The new syndication specialist's "whole role is to help us put these deals together, work with other groups like a Denham, like others out there that would be willing to come in and co-invest with us," he said.
The level of interest in private equity was high at the Prospectors and Developers Association of Canada conference, where miners were hoping to attract much-needed investment. Funding in the sector has become scarce with the slump in commodity prices.
The smaller miners, particularly the ones not yet in production, were hit the hardest when investors dumped mining stocks last year.
Rock-bottom stock values combined with more interest from private-equity firms created unrealistic expectations that private pools of capital would quickly step in and fill the funding void. But that has not happened even though there is about $1-trillion in private-equity funds ready to be invested.
Resource Capital's Mr. Bhappu said he was looking at three areas: assets that the bigger mining companies are trying to divest, projects that are ready for construction, and early-stage companies that would normally raise capital on the Toronto Stock Exchange.
"We see [them] as a great opportunity for private equity," he said.