Dispatch from New York 2025

Our Dear Leader has been in New York for a few days attending the Mining SME conference. The conference is run by SME (Society for Mining Metallurgy and Exploration) but is actually CTMF 2025, Current Trends in Mining Finance.

In today’s changing world, it is so important to be close to the action and at the moment that is in the USA. Also, Our Dear Leader is a believer in Bamboo Investment Banking and so will happily go to where the capital and best projects are. Those that have followed Our Dear Leader for some time will know he has for many years been saying that the end was coming for Bretton Woods (and it seems like he has been proven right) and why commodities are becoming increasingly important from a geopolitical point of view.

Major nations now realise they must have their own supply chains in critical metals as they cannot risk being beholden to a “single non market actor”…which is how they describe China without actually saying it!

The conference was very focused on critical metals and how the US secures not just mines and the upstream but also processing capability. According to Andrew however, the issue is that they are still very confused as to how they will do it, as highlighted by this slide which shows the org chart for accessing US Government money in mining…

…basically, even the US Government is confused and so the ability to get money from the US Government is actually easier said than done!

Not only is it overly complicated, but institutions like US Exim Bank are also currently over-trading for their capabilities. As an example, it is believed they currently have 140 LoI’s out but with DOGE and Elon Musk cutting costs, it is reckoned it will take over 20 years to execute those let alone take on anymore.

Most of the talks did end up discussing “where is the money for mining?” which is a serious problem, we know that, but it does require real out of the box thinking and mining companies need to show how they can protect investors’ money and give them the greater returns they want for taking the risk.

The other area of growing interest is the rejuvenation of mining in the USA itself now that Trump is making it a priority and trying to get “mining going again”. Central Asia Metals has just demonstrated its willingness to follow this trend with the proposed acquisition of New World Resources and its 100% owned Antler project in Arizona; a brown field copper project at DFS stage. The deal is expected to be funded from existing cashflow and some additional borrowings. Domestic mining in the USA is likely to get better borrowing or grant facilities and Government support especially in Critical Metals. Two small companies that interest us in that respect are Myriad Uranium (uranium in Wyoming) and Guardian Metals (tungsten in Nevada).

Pretty much everyone agrees that the macro environment for investing in mining has never been better but the big elephant in the room is ‘where is the capital’ and ‘why is it still wary of investing in mining when the opportunity looks so good?’. Mining is viewed as risky, very slow and not a high return, therefore to attract capital, the mining industry needs to show how it can remove risk, speed up the time to get returns, and show how returns can be significantly higher than other sectors. This isn't easy but also not impossible but does need some first movers who can see it.

Meanwhile, VSA is moving offices. Since we announced the alliance between VSA Capital and Drakewood Capital Management last year, we have been both deepening and broadening the relationship and the services that we can offer in natural resources and transitional energy/cleantech.  Over the summer, VSA Capital will initially be based at the same address as Drakewood: 99 Bishopsgate, London EC2M 1RP, which is just round the corner from our existing building and the main tube station still Liverpool Street. We expect to make announcements over the summer about our future permanent office plans and expanded service offerings, which will position both Drakewood and VSA Capital for the future in a very positive way and allow "the Oar" to be hung correctly!

Finally, Our Dear Leader will be headed to Mexico for the last 2 weeks of August. These are not holiday plans but visits to various Mexican silver and gold Mines including Sierra Madre, Guanajuato Silver, Luca Mining and Avino Silver and Gold. Mexico is a proven jurisdiction for silver and gold and one of the largest is Fresnillo, a FTSE 100 company. Andrew thinks there are some very interesting potential opportunities for investors to be involved with the more junior space and so is on a mission to do more research…and maybe hone his guacamole recipe.