By Jan Lopatka
PRAGUE (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 in the United States and another business from Sasol (JO: SOLJ ) 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 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.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.