A SUB-SAHARAN FERTILISER LEADER IN THE MAKING
Kropz was one the very few mining IPOs in 2018. At the end of November, Kropz completed an IPO on AIM raising ~US$35m with the aim of becoming one of the pre-eminent suppliers of fertiliser feedstock in sub-Saharan Africa, leveraging the near-production Elandsfontein phosphate project in South Africa as the platform for growth. Kropz’s BEE partner, Patrice Motsepe’s African Rainbow Capital, in our view is one of the strongest BEE groups in South Africa, both politically and financially. Kropz offers strong returns owing mainly to the high level of sunk capital and the low level of additional capex required for the recommissioning of Elandsfontein.
HINDA OFFERS ENORMOUS OPTIONALITY
Concurrent with its IPO, Kropz used its new listing to make an all-share offer to acquire unlisted Cominco, owner of the Hinda phosphate project in Republic of Congo, which offers Kropz enormous optionality: a relatively low-capex, fast-to-production initial project is envisaged with the option of scaling up to a much larger project in future.
STRONG MANAGEMENT TEAM
Kropz has a strong board, including Ian Harebottle (CEO) and Mike Nunn (founding shareholder and NED). Messrs Harebottle and Nunn have built several previous companies in the mining sector (including TanzaniteOne, Gemfields, MDM Engineering and Xceldiam).