Sydney-based Regal Funds Management has become a major shareholder in True North Copper (ASX:TNC) after acquiring a 10.2% stake in the emerging copper producer.
Regal Funds, which was started in 2004 by Andrew and Philip King and manages around $12.2 billion in funds, picked up a further 80.4 million shares at a cost of $4.5 million, or around $0.056 per share.
This takes the fund’s investment to 91.3 million shares.
True North, which has a market capitalisation of around $50 million, in late May completed an entitlement offer and placement, raising $16.6 million for mining operations at its Cloncurry Copper Project in Queensland.
Investment interest in the copper space continues to rise given the growing demand for the red metal in the global clean energy transition.
Bank of America and Citi analysts predict prices will average over US$10,000/t by the end of this year and US$12,000/t by 2026. Tribeca Investment Partners is even more bullish, predicting the copper price will hit US$15,000/t in the coming years.
Philip King said in an interview with Forbes earlier this year that Regal Funds Management is very focused on commodities and is very bullish on both soft and hard commodities, particularly copper.
Prior to creating Regal Funds, King — who was inducted into the “Australian Fund Managers Hall of Fame” — was a portfolio manager at London-based De Putron Funds Management and an equities analyst at Macquarie Bank.
“One area that we like at the moment is resources. We think resources are trading at cheaper valuations than historically they have,” he said in the March interview.
“The number of new mines that we’re seeing outside one or two commodities like lithium is very, very few. Not only that, but it’s getting harder and harder to find new deposits of economic significance. Even for existing mines, operating costs are going up a lot. So, there’s a lot of supply-side pressure.
“On the other hand, we’re seeing that some of the factors that work on the demand side, such as de-carbonisation, will mean that demand for things like copper is expected to double over the next 10 years.
“When these supply constraints and demand increases collide, we think it will have a powerful impact on commodity prices.”
Write to Angela East at Mining.com.au
Images: True North Copper
