Private Placement Mandate

Hello, Found this on the internet and seemed interesting. Can someone with experience help fill this out? Or we can all work together? ------------------------------------------------------------------------------------------ Here Is a Private placement mandate was given during the interview: Mineral Company looking to start and Is looking for strategic investors and already has bank loans for start up. However new investors will be given a stake in the company as they inject $60M. The company has a feasibility study and all industrial licenses to show with the current loan arrangements. Questions How do you locate investors? How do you value the company and is approach as it has now past data? What things you would put on the presentation? How would you decide fees on the project as Ibanker? Would you charge the company or investor? The company wants investor to add strategic value through directions… What kind of info back you would have and how will you sell this Placement?

  1. How do you locate investors? Approach established miners especially those with assets near the Mineral Company’s mines so there’s perceived synergies. Go through the bank’s and personal networks to look for HF/PE investors or wealthy families (especially those whose wealth came from a mining background) that have previously backed early-stage mining companies - not strategic but these investors can take a piece of the capital to reduce initial outlay for the strategic and provide industry contacts. 2. How do you value the company and is approach as it has now past data? Not quite sure with mining companies, but I guess you would take the probable reserves in the mine and used that as a basis for comparative valuation - benchmarking to recent private placements (usually gives higher valuation…) as well as public comp. Or you can do the usual, pie-in-the-sky DCF based on the projected capital and operating budget. 3. What things you would put on the presentation? Details of the mine, probable/potential reserves, excerpt of the key positive points from the feasibility study, list of license, list of management’s expertise in mining, potential exit opportunity, valuation benchmarks, summary projections, recent price trend of the mineral in question and 3rd party demand projections. 4. How would you decide fees on the project as Ibanker? Would you charge the company or investor? Whether the fee comes from company or investor is irrelevant here. The fee will ultimately come from the $60MM of capital raised. If you are working for a boutique then probably charge a % of the capital raise (2%?), or charge a fixed fee if this type of private placement is usually too small of a deal for the bank. In either case, you would want to link the private placement mandate with a future IPO/M&A advisory mandate as that’s when the bank cashes in. 5. The company wants investor to add strategic value through directions… I say BS to that (internally at least). At this stage the company needs a big cheque to jump start their project as otherwise it has no value. If Joe the Plumber wants to give them $60MM, they’ll take it and use the money to hire the engineers they need. 6. What kind of info back you would have and how will you sell this Placement? Business Plan. Market Study on the commodity. Feasibly Study etc etc etc

Thanks for the help Zuran, You have a background in this kind of stuff?

Yup, have been on the receiving side of private placement advisory.