Regent returns to game with big Quebec deal
Former Barrick CEO makes first deal with his new firm Magris
• Two years after being sacked as Barrick Gold Corp.’s chief executive for failing to ignite its share price, Aaron Regent is back in the mining game with a half-a-billion dollar deal he calls the “first of many.”
Mr. Regent’s private equity-backed Magris Resources Inc. is teaming up with some deep-pocketed Asian investors to buy Iamgold Corp.’ s Niobec mine in Quebec for $500-million in cash. The buyers have agreed to pay another $30-million for a nearby rare earth element deposit when it goes into production.
The market has been rife with speculation about Mr. Regent’s dealmaking following his termination at Barrick, which let him go in 2012 after a three-year tenure. The executive generated more profit for every dollar he was paid in his last year of employment than any of his six main peers in Canada and the United States, according to Bloomberg.
For nearly every asset rumoured to be on the market, Mr. Regent’s name popped up as a potential buyer. This is his first acquisition since founding Toronto-based Magris in early 2013.
The financial backers are Singapore sovereign wealth fund Temasek Holdings and CEF Holdings Ltd., a Hong-Kong investment firm owned by billionaire Li Ka-shing’s Cheung Kong Holdings Ltd. and Canadian Imperial Bank of Commerce. Magris is also tapping a term loan from two Canadian banks to help finance the transaction.
“We hope this will be the first of many [deals],” Mr. Regent said in an interview Friday. “We and our partners are also looking to continue to acquire more mining operations or properties.”
Closely held Magris is opportun- istic and won’t restrict itself in terms of the geographies and asset types in which it will invest, Mr. Regent said. Still, the firm has a bias for assets located in the Americas and for base metals or industrials over precious metals, he said.
Temasek and CEF represent a “core team” of backers for Magris, Mr. Regent said, and they will likely be partners in future transactions. Magris could seek a public listing in the future but there are no plans for an IPO at the moment, he said.
Niobec produces about 7% of the world supply of niobium, a key alloy element used to strengthen steel. Iamgold assumed control of the asset in 2006 with the takeover of Cambior Inc. The mine is located in Saint-Honoré-de-Chicoutimi, about 200 kilometres north of Quebec City.
The deal shifts Toronto-based Iamgold into a pure-play gold company and significantly improves its balance sheet at a difficult time for gold miners globally. As the price for the precious metal has dropped — falling under US$1,200 for the first time this year Friday — firms are under pressure to improve efficiencies and lower costs.
Iamgold plans to use the money for acquisitions or to reduce debt.
“This was a sale that had been well-telegraphed over the last few years,” said Tony Lesiak with Canaccord Genuity. “The only issue is timing. Obviously with gold prices in free fall here, some might question getting rid of an asset that would be somewhat insulating. It’s a strong component of their cash flow.”
Iamgold fell 4% to $2.92 in Toronto Friday. They’ve shed 37% over the past 12 months.