Our natural resources practice is led by Carrie James, who has extensive experience with international resource companies.
Equity investments from the UK into mining operations overseas, typically in Southern Africa, Australia, and the Americas, can create certain challenges due to the distance between the investors and the operations.
Two of our recent overseas cases demonstrate our capability in this area and significantly neither of these involved formal insolvency processes.
In Zambia we were engaged by the UK Shareholding Company of a mining operation in Zambia to investigate the overall debt position and consider the financial management controls of the company. Shareholders had concerns about systemic financial failings on site. At short notice, our investigation team attended site to execute a thorough review of the financial operation. Reporting to the shareholders on the issues uncovered resulted in taking control of day-to-day financial management from the incumbent team."
The level of mismanagement uncovered by SKSi resulted in preparing and delivering plans for the management of significant debt levels. Working with a new Senior Management Team, SKSi revised and implement new financial Standard Operating Procedures and ensured proper controls were instigated, so allowing for the continued support from investors in order to restructure and rescue the mine.
Canada was a somewhat different scenario. We were appointed by a UK stock market listed company to assist with a copper mining company operating in Newfoundland. The impact of Covid-19 on physical mining operations and a fall in the price of copper due to the economic slow-down caused by the pandemic had rendered the company in a difficult financial position. Our remit was to investigate and advise on a restructuring of its debt to meet the requirements of the funders and protecting the existing investment of the company shareholders.
Having reviewed the company finances alongside the CFO and proposed a restructuring of the existing debt the company was able to secure a US$13million refinancing package without the need for a formal insolvency process that would have significantly impacted on investment held. This instruction was handled remotely due to pandemic and restrictions in operation at the time.
Whether you are a UK or international investor in natural resource companies and have any concerns over the security of your investment please contact Carrie James.