Davis’ VBR establishes SPAC aimed at hunting down battery minerals production

Mick Davis, founder, Vision Blue Resources

VISION Blue Resources (VBR), a company founded by ex-Xstrata boss, Mick Davis, has launched a $300m special purpose acquisition vehicle (SPAC) – ESM Acquisition Corporation (ESM) – that will hunt for minerals essential for a lower carbon economy.

A SPAC is a shell company that uses cash raised from a public offering to buy another company. ESM was created with Energy & Minerals Group and will “… focus on a target business that is positioned to benefit from the global transition towards a low carbon economy,” according to a VBR statement cited by Reuters in an article.

The transaction size could rise to $345m if the underwriter exercises a 45-day overallotment option granted by ESM, said Reuters.

In a separate statement, VBR said it will invest $12.6m into Ferro-Alloy Resources Group to expand a vanadium project and fund a new study. Ferro-Alloy, which listed in London in 2019, owns the Balasausqandiq vanadium deposit in southern Kazakhstan where it mines and processes the metal, which is used to strengthen steel and is a key ingredient in large-scale power storage.

In February, Davis announced plans to build a graphite mine in Madagascar through VBR.

VBR will invest $29.5m of the $60m raised in NextSource Materials, a company that has 100% ownership of the Molo Project in southern Madagascar. The project is billed as “… one of the largest known and highest quality deposits” of flake graphite globally. In its first phase, Molo will produce 17,000 tons a year of 98% purity graphite.

Davis said he was heartened by the financial support so far and promised more financings later this year. “We have also received significant additional expressions of interest to invest in VBR’s future fundraisings and we expect to return to the market later in 2021.”