Advising Investors

There are certain risks inherent to the mining industry, including the cyclical nature of commodity demand, unpredictability surrounding exploration and production costs, access to transport infrastructure, management, access to labour, changing national regulations, geo-political concerns, local inflation, environmental compliance and currency volatility together with the less tenable but nonetheless material risks associated with sustainability, mine-rehabilitation, geographic remoteness and community relations. Investors in the mining industry need to factor these risks into their investments plans. The longer investment horizon normally associated with mining investments is in itself also a risk investors need to consider.

We understand the myriad of factors that influence mining investors and are experienced in advising on the legal safeguards that should be put in place to protect them. We assist investors balance the goals of risk minimization and profit maximization. We understand that although certain projects may appear to be fundamentally sound, legal risks can only be properly ascertained following the completion of thorough legal due diligence process.

Charltons also advises natural resource companies on strategic equity investments in mining project around the worlds. Typically natural resource companies apply different investment criteria when contemplating investments compared to those applied by non-mining industry PE investors. In this regard Charltons advises on “Off-Take” arrangements, incorporated and unincorporated joint ventures, and farm-in/farm-out arrangements. We also advise on EPCM and turn-key contracts and infrastructure access agreements.

Charltons can advise investors on:

• Due diligence
• Placings to existing shareholders (where option is available)
• Drafting share sale / subscription agreements and shareholder agreements
• IP protection where investor / farm-in party contributes IP
• Injection of PE capital via both incorporated and unincorporated joint ventures
• Where applicable the drafting and/or review of “off-take” agreements
• Exit strategies (including Hong Kong IPOs)
• Representing PE investor as shareholder
• Advising the PE investor’s board representative (where applicable)
• Putting in place corporate governance policies and practices to protect investor / investment
• Conflicts of interests with the invested company
• Freedom to transfer interests
• Investor rights
• Anti-dilution provisions
• Tag / drag along rights
• Borrowing and charges
• IP transfers

for investors who may be unfamiliar with the debt financing option, better understand the process so they can make the right choice as to what financing model best suits them. We are happy to play a key role in coordinating and/or managing the process between borrower, lender, sponsor (where applicable), professional advisers and technical consultants.

Charltons can assist sponsors and borrowers by:

• Advising on primary financing documents
• Advising on the provision of security and/or reviewing or drafting security documents as required
• Coordinating the due diligence process on behalf of the miner borrower
• Review and/or drafting off-take agreements, infrastructure agreements, construction agreements, equipment agreements, operating agreements, maintenance agreements, and product purchase agreements
• Advising on equity contributions (where the financing model combines both debt and equity)
• Advising on the legal aspects of life of mine plans and development plans
• Advising on hedging arrangements
• Advising on the Listing Agreement (where applicable)
• Advising on option, warrants, and similar rights
• Advising on convertible debt securities