Waterton raises over $1 bln for precious metals fund

TORONTO, April 7 Mon Apr 7, 2014 5:00am EDT

TORONTO, April 7 (Reuters) - Mining-focused private equity firm Waterton Global Resource Management has raised $1.016 billion for its latest flagship precious metals fund, the firm said on Monday.

The Waterton Precious Metals Fund II will focus on late-stage development projects in politically stable jurisdictions, primarily North America.

Private equity firms were once only minor players in mining, but an extended capital freeze has brought down valuations, attracting more firms to the sector and leaving miners with few other options to raise funds.

Bankers, deal lawyers and private equity firms are predicting a flurry of private equity transactions in mining this year by smaller, mining-focused private equity groups like Toronto-based Waterton.

"I think as the market stays depressed, people won't view it as depressed. People will view it as the new reality," said Isser Elishis, chief investment officer at Waterton.

Investors and boards will have to decide whether to dilute their share bases or sell, said Elishis, and that is likely to boost private equity activity.

The firm will look at acquisitions, joint ventures and partnerships. The fund is set to run for nine years from last July, and acquisitions will likely be in the range of $25 million to $200 million, Elishis said.

"We aim to have the capital deployed over the next few years, but it will speed up or slow down depending on the opportunities," he said.

Waterton is already in the midst of a hostile bid for Chaparral Gold Corp, a Nevada-focused precious metals explorer. (Reporting by Allison Martell; Editing by Eric Walsh)

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