Digging In To The Kids’ Inheritances

There’s a book I raved about when I hosted Bloomberg Business Breakfast some decades ago. The unsociable hours this gig incurred meant I had little time or energy to read, but I did consume ‘Live Rich, Die Broke’ a seven-part financial plan that followed the premis of affording the lifestyle of your dreams and telling the kids to ‘do one.’

Author Stephen Pollan warns his children not to expect any inheritance because he had provided for them till adulthood, sent them to good schools and had given them the tools to look after themselves. The money he’d saved and earned subsequently was going towards his existence solely.

The book is a little outdated now, but that severe takeaway remains a constant and I was reminded of it recently when Paul Atherley, the chairman of Pensana PLC revealed he had put his daughter’s inheritance into the company and it was the seven figure sum of a million U.S. dollars.

I wondered at the time if that revelation was breaking news to Atherley offspring, however Paul later qualified he hoped to ‘take some money off the table’ in approximately five year’s time, so family harmony may be restored unless of course permission has been given to dad to ‘die broke.’

Pensana is in the final stages of financing what it believes will be the world’s next major rare earth mine and in the EV economy webinar Paul put the Pensana possibility into context by citing the competition. “Our only two competitors that are in production are MP Materials and Lynas and they have market capitalisations of $3 billion and $4 billion respectively so there’s a lot of headroom if we get this right.”

Paul is appearing at the Master Investor show on March 9^th and you can ask him how the company is going to get it right and if the inheritance investment is public knowledge. Well if it wasn’t – it is now.

Webinar commitments meant I was unable to attend the Mining Indaba in Cape Town. The ’Investing in Mining Africa Indaba,’ is a long-established event and been enjoyed by the mining movers and ‘manoeuvrers’ for thirty years.

It’s evolved from the debate light and late into the night networking gathering into a well respected melting pot of sector sharing intelligence shaping the future of socially responsible critical minerals extraction, the electric vehicle economy and the partnerships required to make the potential a reality.

Sleuthing away at the attendees list which ran into the thousands, I was mind mapping which companies on paper would make perfect partnerships in terms of capital raising savviness and project expertise.

I was doing that for fun, but others do it professionally despite it being a small industry with a disproportionate amount of disappointment.

Take the insights of KoBold Metals president Dr Josh Goldman for example. He was at Indaba banging the drum for mineral exploration investment to generate the pipeline of high quality projects required for a global fleet of electric vehicles and the transition to renewable energy

In a sobering conversation with news anchor Nastassia Arendse he has a theory about what is holding back investment in exploration around the world. “The reason we haven’t seen it is exploration success rates are too low. More than 99 projects will fail to become economic mineral resources. If we can get the exploration success rate up the capital will flow.”

And that is the multi-million dollar conundrum resulting in chairmen raiding their children’s piggy banks. Dr Goldman was however speaking from the comfortable position of having funds. After discovering a huge copper deposit, KoBold is backed by venture firm Breakthrough Energy Ventures. Read the board and investor roll call of this venture firm. It includes Bill Gates, Jack Ma, Aditya Mittal, Jeff Bezos and my old boss Michael Bloomberg. Small world.

That’s a tick of confidence for KoBold which is positioning itself as a partnership-ready AI unicorn that has cash, AI exploration abilities and world leading experts. Apparently it’s showing or shown interest in AIM-listed Bluejay Mining which is developing the Disko magmatic massive sulphide nickel-copper-platinum-cobalt project in Greenland.  That deposit has been compared to the Norilsk project in Siberia described as the largest nickel, cobalt, and palladium mine in the world.

Which brings me to my final metaphor. Ideally investment unfreezes and at this month’s Master Investor show I look forward to hearing about capital inflows coming in from the cold and inheritances repaid.