Appian Capital Advisory bought the Santa Rita nickel mine out of bankruptcy for $68 million and the Serrote copper-gold project for $40 million in 2018. The previous owners of the Santa Rita had already spent $1 billion building the mine and Appian splashed another $400m on the property bringing it into production.
Last week, the London-HQ company sold the two Brazilian properties for $1.065 billion, $65m of which is associated with a contemplated gold royalty on Serrote.
The transaction is a prime example of what Michael Scherb, Appian founder and CEO, told MINING.COM in 2018 is the firm’s investment philosophy: “Mining is the perfect industry for applying long-term value investing principles because it’s so cyclical, and you let the industry create the entry and exit windows for you through its volatility and irrationality.”
Few metals give nickel a run for its money when it comes to volatility. When Appian bought Atlantic Nickel in 2018 the price averaged just over $13,000 a tonne and on its way to today’s $25k the devil’s copper briefly topped $100k. And if someone said in 2018 that not one, but two automakers would fund the investment to buy the mines, few would have called that rational.
For the rest of this article: https://www.mining.com/1-billion-spac-deal-shows-how-mining-supply-chains-are-breaking-up/