Cyanide maker Draslovka mulls equity raise to drive new mining technology

Sasol

30/06/2023 16:21

By Jan Lopatka
       PRAGUE, June 30 (Reuters) - Cyanide maker Draslovka is
considering an equity fundraising worth hundreds of millions of
dollars support the roll out of new technology that could help
miners slash use of cyanide, its CEO said in an interview on
Friday. 
    The privately-held Czech company is the world's leading
sodium cyanide maker. The poisonous chemical is used in the
extraction of gold and silver from ores, chemical manufacturing
and more. 
    Now, Draslovka has put helping miners use less cyanide at
the centre of an ambitious growth plan. It acquired Australian
Mining & Process Solutions last year, which developed innovative
glycine leaching technology that can cut cyanide usage in mining
by about half, depending on the circumstances. 
    Draslovka hopes the technology will spearhead a
transformation of the industry, raising its effectiveness and
reducing environmental impacts. It wants to raise funds to help
it drive uptake, taking advantage of its existing customer base,
Chief Executive Pavel Bruzek Jr. said.
    The company aims to quadruple its earnings before interest,
depreciation and tax (EBITDA) to $400 million over five years,
mainly via licensing the patented glycine process and providing
services, he continued.
    The company entered into a $150 million preferred equity
investment with U.S.-based Oaktree Capital Management last year,
but Bruzek said this did not show a clear equity valuation of
the firm.  
    "As we are moving closer to the market, we would like to get
a valuation tag, clean equity," he said of the equity round
under consideration.
    Draslovka would look to offer a minority stake, he
continued, adding large players that would help boost its
profile preferred a size of at least $200 million. 
    Draslovka has been working with JP Morgan in London as
advisers, he added. 
    The company would tell investors its existing business
infrastructure and relationships are key to the roll out of the
new product, Bruzek said. 
    The company has already acquired cyanide maker Chemours
 CC.N  in the United States and another business from Sasol
 SOLJ.J  in South Africa as part of an ambitious expansion
strategy, which Bruzek said had left it with a global market
share of around 16-20% in sodium cyanide.
    Gold miner Barrick Gold  ABX.TO  signed up to test and
implement glycine for leaching ores with Draslovka in March. 
    Bruzek said Draslovka had another 10 similar potential
projects lined up by year-end, including a top nickel and cobalt
miner. 
    Bringing Draslovka, controlled by Czech family office BPD
Partners and Bruzek's family, public is a longer-term goal, he
added. 

 (Reporting by Jan Lopatka; Editing by Emma Rumney)
 ((jan.lopatka@thomsonreuters.com; +420 234 721 614; Reuters
Messaging: jan.lopatka.thomsonreuters.com@reuters.net))