Red Kite Reports on Initial Investments and Growth of Red Kite Explorer Fund Over First Year
Fund Is Unique Provider of Project Financing and Metal Off-Take Agreements to Mining Companies Globally
LONDON, NEW YORK and SYDNEY, July 22 /PRNewswire/ -- Red Kite, one of the world's largest metals-focused investment firms, today issued an update on the initial investments and growth of its Red Kite Explorer Fund. The Fund provides mining companies with project financing and metal offtake agreements, allowing them to initiate or expand mine production. All financing transactions include offtake, or forward-purchase, agreements enabling the Fund to purchase the individual mine's future metal production.
"The Red Kite Explorer Fund had a strong first year, completing several transactions. The Fund currently holds four financings in tandem with six offtake agreements," said Michael H. Carsley, a Managing Director of Red Kite and the portfolio manager of the Explorer Fund. "Because of the Red Kite team's long-standing participation and leading position in the global, physical metals markets, we are one of the few commodity investment firms that can provide financing as well as global distribution to mining companies. For this reason, deal flow remains robust and we annually are able to evaluate more than one hundred opportunities and pursue dozens in greater detail. This level of activity is an indication of the compelling nature of the Red Kite offering, the inherent inefficiency of the mine financing market, as well as a present environment that continues to be credit-constrained."
The Fund's transactions to date include:
- An offtake-only transaction with a refined copper producer in North America.
- A combined financing and offtake transaction with a gold mine in North America in which Red Kite led a syndicate of investors. Red Kite received the offtake agreements for the mine under development and other projects in the region owned by our mining partner.
- An off-take transaction with a copper producer in North America that included a pre-payment financing through a short start-up period.
- A combined financing and offtake transaction with a gold producer in which Red Kite led a syndicate of investors and received the offtake agreements for mines in North America and South Africa.
- A combined financing and offtake transaction with a gold producer in Australia.
The Fund continues to evaluate transactions globally with due diligence efforts currently underway in the U.S., Canada, Mexico, Argentina, Africa, Australia and South East Asia. In order to capture the strong market opportunities before it, Red Kite recently added two new members to its global mine finance team.
Over the first year of operation, the Explorer Fund delivered returns in excess of other similar strategies or indices.
About Red Kite
Red Kite manages a diversified group of investment strategies specific to the non-ferrous and precious metals markets, in addition to the Red Kite Explorer mine financing fund. Red Kite's team of experienced professionals draw upon proprietary information flows sourced through the group's operation of a significant physical metals business. The firm operates across the global metals industry from offices in Bermuda, Hong Kong, London, New York, Shanghai and Sydney. In addition to the Red Kite Explorer Fund, Red Kite manages four other funds -- Red Kite Metals, Red Kite Compass, Red Kite Prospect 1 and Hong Feng Zheng -- which are predominantly trading focused and hold arbitrage, relative value, and directional positions. All of Red Kite's funds delivered positive returns in 2008.
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