EMR Capital readies adviser to help weigh up options for its 29Metals stake

29Metals' Capricorn Copper mine.

Private equity firm EMR Capital is said to be poised to hire an adviser to weigh options for its stake in listed copper miner 29Metals.

While EMR Capital has had some stellar results with its investments, and 29Metals is no exception, the public market performance of the copper miner has been disappointing for the firm that still owns 45 per cent, as well as its investors.

While 29Metals listed in 2021 with a market value of about $1bn, it is now worth about $300m following flooding at the Capricorn Copper mine in Queensland that had taken it out of operation.

Now there’s speculation that it will need another equity raising, having already tapped the market for $151m last year through Macquarie Capital and Jarden.

One solution is that the business, which also owns the Golden Grove copper and gold mine in Western Australia, is sold, and the understanding is that EMR is positioning itself to shop its interest to suitors that could be the catalyst for an all-of-company deal.

Macquarie Capital usually works for 29Metals, but the understanding is that 29Metals will seek out its own investment banking adviser.

DataRoom understands the highly acquisitive Metals Acquisition has taken a look at the business, as has Develop, headed by former Northern Star boss Bill Beament, but they have walked away. They may return to the negotiating table at the right price, particularly as they remain keen to increase their exposure to copper.

The 29Metals share price fell sharply last week when it delivered its quarterly report, revealing that money was tight.

Analysts at Jarden forecast a cash balance of $30m at December, assuming all loans are full drawn, and they said they remained of the view that additional funds were needed.

They pointed out that its cash balance had reduced to about $60m, from $85m at June, and its liquidity had fallen to about $104m, from about $130m, as net debt increased to $147m.

The 29Metals Glencore offtake finance facility was drawn by a further $US20m post quarter end, and it expected the remaining $US10m to be drawn in the current quarter.