Karbine

Karbine has been providing engineering design, development and operating services to the global resources industry for 5 years, with clients including BHP, Anglo, and Kinross.  Its founders and directors are engineers embedded in the industry, not speculators.

In 2013, Karbine established its own operating gold mine in Papua New Guinea, exiting that investment in 2015.  Its focus is now primarily on the abundant opportunities in Australia.

 

The Gold Divergence & Opportunity

The Mining & Resources industry is in crisis.  Bulk commodity prices have collapsed, asset and company valuations have collapsed, and access to new sources of debt and equity are near non-existent. In parallel with this, gold is re-establishing itself as the metal of choice in an increasingly volatile world.

Karbine strongly believes there has been no better time in a generation to develop and operate mines to acquire physical gold:

  • At c.AUD1750/oz, gold is very close to its all time high of $1800/oz, supported by both strong Indo-Chinese demand for jewelry, and as a hedge for uncertain economic times
  • Yet the asset values of ASX held gold mines have collapsed, dragged down in the general mining & resources malaise, providing a pipeline of distressed assets at basement prices
  • Operating costs in Australia are falling, with lower diesel prices and wages, and rising labour availability

Karbine’s Active – Not Speculative – Strategy

As the Mining & Resources crisis has unfolded, there has been a stampede of investors headed for the door. 

A small number of vulture plays have emerged, mostly backed by international capital.  But these are mostly “buy and hold” plays, speculating that a future up-swing in the overall commodities cycle will increase the value of the corporate assets many-fold. In other words, betting on the market.

Karbine doesn’t like gambling.  It is pursuing a “buy low and operate efficiently” strategy, using its strong internal operational capabilities to produce gold bars with high investment returns.  Any future uplift in the value of its underlying assets will be a bonus to this primary focus.

 

Karbine’s Core Capabilities for Success

Karbine’s success is underpinned by three core and critical capabilities:

  • The deep experience to look beyond macro market views to diligently identify the attractive and undervalued assets
  • The ability to optimize capital cost through design and project management expertise and an established global supply chain (our sister company is Karbine Services, a leading provider of mining services)
  • The ability to optimize operating cost efficiencies through deep operational experience and private, low overhead structures (we are an active mining operator, not an explorer).

 

Physical Gold for Investors

Karbine acquires, develops and operates gold mines on behalf of shareholders and partners. Investors receive equity (dividends) and discounted physical gold offtakes (right to buy physical gold at significant discount to spot prices). Investors can choose to invest into the parent entity (with the founders and mangers, for exposure to all assets) or into asset specific holding companies.

 

Investment Memorandum

For further information, sophisticated investors should contact Rob Foster.