Denham backs West Australian mining venture

The global energy firm has invested $130m in Perth-based Auctus Minerals

Resources and energy private equity firm Denham Capital is investing $130 million in Western Australian mining company Auctus Minerals, according to a statement.

The newly-formed venture, based in Perth, will focus on developing projects into production, as well as improving the economics of operational mining assets throughout Australia.

The firm is teaming with the Auctus management team, which is led by Stephen Murdoch, an engineer with around 25 years of experience in the Australian mining sector, having worked on large production projects in resources, construction and manufacturing.

“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,” Bert Koth, managing director and head of Australasia at Denham Capital, said in a statement.

“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 realise that opportunity.”

Denham’s flagship vehicle closed on its $3.05 billion hard-cap in April 2012, with about 90 percent of the fund’s commitments coming from existing investors, Private Equity International reported earlier. The fund, which launched in 2011, was targeting $2.5 billion.

The firm now has about $7.9 billion in assets under management and typically seeks global buyouts between $50 million and $250 million. It targets sectors including, oil and gas, mining, power and renewables. The firm’s fifth fund, a 2008 vintage, raised $2 billion.

“We’re delighted to partner with resources fund heavyweight Denham Capital,” Auctus’ Murdoch said in a statement.

“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 endeavor in Australia.”