Another sign the Natural Resources sector is near the nadir?

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A piece in today’s Telegraph (below) looks to reaffirm our stance that the mining sector is in the early stages of a strong cyclical bull market. The retracements last week are only natural after such a strong showing following the QE3 announcement of a week ago. We have chosen beaten down, undervalued plays with specific problems that we expect will result in some type of corporate activity as part of our Buy list (link here, pagw 21 –

Mr Pengilly seems to have a similar idea….

One of the JP Morgan bankers who was a driving force behind the delayed Glencore-Xstrata mining mega-merger is understood to be raising a $2bn fund to invest in natural resources projects.


Lloyd Pengilly, one of several of JP Morgan’s crack unit of mining rainmakers who has left the bank this year, is said to be looking to act like a private equity company by investing in “early-stage projects”. Industry sources said he would then look to sell on the projects or companies at a profit and maybe list his fund on the stock exchange in the coming years, though some doubted he could raise more than $1bn in current market conditions.

The news has led to feverish speculation that JP Morgan ally Ian Hannam, an SAS veteran who is fighting a £450,000 Financial Services Authority fine for market abuse, will soon team up with Mr Pengilly.

Mr Hannam is leaving JP Morgan in the wake of the FSA’s charge, though will stay on as a consultant until the fate of the £50bn Glencore-Xstrata mega-merger is resolved. JP Morgan has been the key adviser to Xstrata since 2002, when it was spun-out of Glencore as a collection of coal assets.

Glencore, which trades commodities from oil to wheat, has long held ambitions to reunite with Xstrata. For years Mr Hannam and Mr Pengilly have plotted what the merged group would eventually look like.

That vision was supposed to have been realised by tomorrow, when the Xstrata board was expected to agree to Glencore’s merger terms.

However, both parties requested that the Takeover Panel give them another week to iron out the deal’s finer details, which was granted on Friday afternoon.

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