Dispatch from South Africa 2025

The intrepid VSA Capital team has been back to South Africa for the annual Mining Indaba and as usual comprises our Dear Leader, together with his trusty team of Raks (Andrew Raca) and Ollie (Ollie O’Donnell).  This year we have pushing the boat out with the VSA budget for entertaining and business development (although no boats were actually involved).

The VSA Capital Trandem

Those that know Our Dear Leader will know that he is a very active sportsman and extremely competitive and this year new to the VSA Events programme was the inaugural Mining Indaba Padel Tournament. 14 players gathered on the Saturday afternoon at Virgin Greenpoint Padel Club for some hard fought matches and more importantly everyone had fun.

The VSA Padel Tournament

The winners were Matthew Venturas of S-RM and Oliver Tors of Antler Gold with a special mention for runner-up James Wood of Winterflood Securities.  Andrew did make it to the final but he was also in charge of the scoring.

Sunday is always the busiest day for VSA with both the Table Mountain Walk and also the Big Sunday Party.

The Table Mountain Walk, which was arranged in partnership with Dentons, had 52 people making the climb; a record number.  The excuses we get early on a Sunday morning from those not being able to attend do give us a good chuckle; it is amazing how many people get urgent requests from clients to attend a breakfast meeting on a Sunday, or need to write a document urgently by Sunday lunchtime.  But we are relaxed as it is always a great walk with great company.  Next year is expected to be even bigger.

Delirious with pain and joy

Table Mountain Top                                       

The Big Sunday Night Party is organised in conjunction with fellow partners and is now very much the start of Mining Indaba.  Our thanks to all partners which include Africa Mining Indaba, PKF, Andaman Partners, Watson Farley Williams, Riverfort, Moshe Capital, and Carey Olsen.  As usual about 500 guests came along and enjoyed the evening and meeting old friends again.  This party also uses any surplus funds to donate to the Kusasa Project, which is a charity in Franschhoek to break the cycle of poverty,  which we have been supporting now for nearly 20 years.

The Big Sunday Night Party

It isn’t all just fun and games! The team were present at the Mining 1-2-1 event meeting with junior mining companies and investors. Numerous discrete meetings and dinners with clients were also held. We are told they even managed to find some time to attend a few other drinks parties and events!

Our Dear Leader is always amazed how every year Africa Mining Indaba just gets bigger and bigger both the main conference and also the events and parties as people fly in from all over the world to network. The atmosphere this year also has been remarkably upbeat considering we are probably now about 18 years into a mining downturn.  Maybe the fact that there is geopolitical turmoil around the world especially with Trump now as the new President of the USA, Russia still fighting an absurd war in Ukraine and China (who are never seen at Africa Mining Indaba due to the clash with the Chinese New Year – the Year of the Snake) being still in some economic uncertainty, people just want to escape to a world of sunshine and parties.  The Brits, who do lead the charge when it comes to hosting parties, certainly are relieved to be away from London for a week and to forget, albeit briefly, that our current Labour Government is destroying the UK economy faster than anyone could have imagined.  Africa though is still a continent where there are abundant natural resources and where a land grab is still pursued.  Everyone knows there is now huge interest in battery and critical metals and maybe he who controls them, will control the World.  But also processing is becoming increasingly important and we know China is dominant here but the Middle East is rapidly emerging as a new competitor with plenty of money.

VSA does have a Shanghai office, although since covid it has been somewhat quiet, but Our Dear Leader has noticed more and more clients talking to him about what can be done in China.  He feels this is partly driven by a lack of capital available to the mining industry in the Western world and so China may offer solutions. Expect more news about China and what Andrew has planned out there as 2025 rolls out.

On Wednesday Andrew sat on an expert panel on copper in the main conference of Africa Mining Indaba (yes, we were quite surprised he was an expert on copper).  His fellow panellists were Jill Cooper (Orion), Ketiwe Lwando (Afreximbank) and Quinton Adams (Copper 360).   The main discussion points were around China and its influence on copper; will the Transitional Energy revolution really boost demand; and can African Cooper mining be ESG compliant?  Seeing as Andrew is the expert, if you want to know the conclusions do ask him directly.

The Copper experts

It has been very useful to be marketing out at Indaba along with Drakewood Capital Management who are VSA’s new strategic shareholder.  VSA Capital and Drakewood have been arranging numerous meetings in Cape Town with mining companies seeking funding to bring their mines into development.   The Drakewood team led by Tim Wilson (ex Standard Chartered and JP Morgan) and David Freeland (ex Trafigura and Concord) have joined with David Lilley (ex Red Kite founder, and founder of Drakewood) to establish a Mine Finance Fund.  The Fund sits alongside Drakewood’s other funds for commodities (base, precious and ferrous derivatives) and natural resources (listed equities).  Good progress is being made with setting up the Fund and Drakewood are about to soft close on the first tranche with seed investors, with additional investors in process.  The broad mandate of the Fund is to provide mid and junior mining finance, through structured and flexible debt, generally senior secured, with a 12–36-month tenor.  Typically, mines of interest will be in or close to production (<18 months) and with a view to production flows.  For VSA, this allows for some very interesting conversations where, in addition to our investment banking and broking expertise, we can offer a full suite of capabilities to help junior miners.  We expect exciting progress with this developing relationship in 2025.

Last year’s conference feels a long time ago and while public capital markets remain tricky, the low point for Africa may have passed with a drip-drip of strategic and corporate-led funding into development projects starting to happen.  The geopolitical backdrop is undoubtedly more difficult and fewer jurisdictions are investable but that seems to be encouraging diversification across the continent from those groups who are ready to take advantage of the opportunities that the lack of funding has created. 

The big news over the conference was probably the investment by Zijin into Predictive Discovery but over the year other companies received strategic funding and that is now bearing fruit.  Kobo Resources and Chilwa Minerals have been drilling in Cote D’Ivoire and Malawi to great effect while Midnight Sun just announced an impressive 21m @ 10.6% Cu.  Montage Gold’s deal again with Zijin has catapulted project development forward and driven the share price up 217%.

At the conferences and our meetings we saw a number of other projects worth getting excited about.  The conclusion is that we might well have passed the low point for Investing in African Mining

With the conference winding down, VSA laid on quite an extravaganza on Thursday for an eclectic range of friends.  The early morning involved scooter riding through the vineyards of Stellenbosch, followed by a wine tasting.

Easy Riders in Stellenbosch

A tour of the Banhoek Chilli Oil facilities was next followed by a tasting of the 7 different oils; Original, Lemon & Herb, Garlic, Olive Oil, Unplugged, Chipotle and Asian.  those that have never tasted Banhoek Chilli Oil you may not understand the excitement.  At VSA it is a compulsory accompaniment!  We recommend trying it as it really is remarkably good and sold in most Sainsbury stores in the UK and Amazon globally.

So we say farewell to South Africa having had an intensely busy time developing relationships and making new connections internationally.  VSA is broadening our service offering and strengthening our presence in the market.  PDAC now beckons and the team will be represented by Andrew Monk, Ollie O’Donnell and our Senior Geologist, Paul Renken.  If anybody would like to meet members of the team in Toronto, please get in touch with your usual VSA contact.