Perspectives from ISB

Hancock Prospecting is an Australian mineral exploration and extraction, privately owned, company that holds the rights to some of world’s largest iron ore deposit. Gina Rinehart is chairman of Hancock Prospecting, a company founded by her father Lang Hancock. Rinehart has inherited 76.6% of the company with the remaining 23.4% constituting the Hope Margaret Hancock Trust.

 Hancock Prospecting recently announced that it would invest $300 million into a UK based potash mine owned by Sirius Minerals. As part of the deal, Hancock would take $50 million worth of Sirius shares and pay $250 million for a royalty stream on production. However, the royalty deal won’t kick in until Sirius has committed funds of $630 million to the project. In order to generate funds for the project, Sirius has raised $400 million in convertible bonds and finalised a $598 million placement at 20p a share.

 As per the deal, Hancock also has the right to buy 20,000 tonnes of product a year to use on its Australian agricultural operations. The project has potential to become one of the world’s leading producers of multi-nutrient fertiliser, and could have a life of 100 years.

 Source: CampdenFB