The European Bank for Reconstruction and Development (EBRD) is seldom in the news, and yet it has played a significant role in shaping the world economy.
With accumulative business volume of $90 billion, the EBRD invests in 29 countries from central Europe to central Asia, supporting the development of democratic market economies.
They have offices in 33 countries and a staff of 1,500. Since 1991 they have funded 3,268 projects.
For the most part the EBRD steers clear of the mining extraction industry, preferring less speculative sectors like energy, technology, communications and infrastructure.
One notable exception is the $10.5 million investment EBRD made in Tirex Resources (TXX-TSX.V) a Canadian resource company developing a Volcanogenic Massive Sulphide (VMS) district in Albania.
VMS deposits contain rich veins of copper, zinc, gold and silver.
In fact, Tirex was the very first exploration company funded by the EBRD.
This is noteworthy because the EBRD’s due diligence protocols are stricter than most big banks.
The EBRD does not lend money to companies incapable of generating cash flow.
And as it turns out, the EBRD’s assessment of Tirex was correct.
The bank bet big on Tirex’s first mover status and that investment may now be ready to pay off in a big way.
Three years after the EBRD first backed Tirex, the company has again proven that it is one of the most creative companies at attracting financing in the exploration world.
Tirex has signed a Definitive Agreement with Ekin Maden, a privately held international mining company now operating in Albania. This agreement will allow Tirex to target a fast track into copper and gold production without any share dilution normally associated with such a capital intensive event.
In turn, targeted cash flows from the mining partnership will allow Tirex to explore what looks to be world-class potential for new discoveries in the Mirdita VMS District without continually raising capital.
Tirex and Ekin Maden each own 50% of the operating company.
Tirex will sell broken ore to the mill at the mill gate, and will receive a predetermined percentage of the gross contained value of the ore.
Substantial near-term production and cash flow is being targeted from the deposits being contributed to the operating company by Tirex.
Ekin Maden owns the biggest copper mining company in Albania, with two mines as well as the Fushe Arrez processing operations.
The mill and flotation plant complex was recently expanded to a 600 000 t/y capacity.
Tirex is contributing six historically-known mineral deposits from its Mirdita VMS project and Ekin Maden will contribute capacity at the Fushe Arrez mill to process ore mined by the new company.
Ekin Maden will also finance the mine development capital and equipment needed to start production.
Personal money management habits are typically engrained in our DNA.
Penny Pinchers will scrimp no matter how rich they get.
Big spenders will splash money around regardless of a ballooning debt load.
CEO’s also have an entrenched attitude to money.
You can de-code it by observing how they raise cash.
Tirex CEO Bryan Slusarchuk is a former Investment Advisor and Venture Capitalist who seems vehemently adverse to share dilution.
He’s never issued a warrant while raising capital for Tirex and has struck multiple deals allowing the company to spend money on the ground while keeping the share structure tight.
Maybe that’s how he pitched the EBRD.