Leading private equity group Denham Capital commits $130m to Australian mining operation

Denham Capital, a leading resources and energy-focused global private equity firm, has teamed up with former Karara Mining Chief Executive Steve Murdoch to establish a joint venture which will focus on developing mining production projects and improving mining assets throughout Australia.

Image credit: Flickr User:  eastcolfax
Image credit: Flickr User:
eastcolfax

The new entity, which is called Auctus Minerals, will be headquartered in Perth and led by Managing Director Stephen Murdoch, who has recovered, developed and brought into production the $A3.5 billion Karara Iron Ore Project for Chinese/Australian joint venture.

As part of the agreement, Denham Capital will back Auctus with an initial equity commitment of US$130 million which will be used on developing promising projects into production as well as on improving the economics of operational mining assets throughout Australia.

“We’re delighted to partner with resources fund heavyweight Denham Capital. Our executive team has a highly regarded pedigree in delivering value enhancement outcomes in the Australian resources space. Partnering with Denham, which provides deep entrepreneurial culture and extensive knowledge of the global resources industry, has resulted in the formation of a powerful mining endeavour in Australia,” said Mr Murdoch.

According to Reuters, Mr Murdoch will be joined on Auctus’ management team by two former colleagues who have worked closely with him in the past, Finance Director Paul Sims and Commercial Director Terry O’Connor.

“Stephen and his team have a long and successful track record of implementing savings to operating and development costs in both base metals as well as bulk minerals. During the mining boom, Australia has become a high cost environment with productivity decline. Thus, the key to value creation in Australian mining projects today is the ability to achieve cash flow fast and reduce cost rigorously. Partnering with Stephen and his team will allow us to realize that opportunity,” said Bert Koth, Managing Director at Denham Capital and head of the Australasian region based in Perth.

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