Features

Mason Hills – Resource Capital Funds

Staking a claim in a world less dependent on pollutants

Although an accomplished commercial and corporate attorney in his native Australia, Mason Hills held off on taking an American bar exam after his employer moved him from Perth to Denver in 2012.

In Colorado, Hills was to lead one of the Resource Capital Funds investment teams. He’d have plenty to keep busy, new capital being the lifeblood of this private equity firm that partners with hundreds of mining companies worldwide. While Hills’ experience with one of Australia’s biggest law firms would be an asset, RCF’s then-general counsel could be counted upon to front the legal end of the business.

But when that general counsel retired in early 2019, the executive team commenced searching for a successor only to come back to Hills as its choice. While he was amenable, he first had to pass the bar exam. RCF gave him the time to study, and the U.S. and Australian legal systems having some commonalities, Hills passed the New York bar on his first try, and assumed the role. However, he says it replaces one pressure with another.

“The hardest transition wasn’t so much the change of law but moving from investment principal to advisor,” Hills explains. “As the lawyer, my job is to make a recommendation and even in some cases a strong recommendation. As the investment principal, you must make the choice and live with it.”

Hills having trained some members on the investment team, he says everyone’s often on the same page and how exciting the past few years have been. Though he concedes that the mining industry is often disparaged as environmentally insensitive, he says RCF invests with progressive operators and how essential some minerals and metals are for the world to reduce its carbon footprint.

Keen on copper

Copper is among those metals, it being a highly efficient conduit for generating power from solar, hydro, thermal and wind energies, and indispensable for charging the electric vehicles that some major automakers have committed to only produce by mid-century.

“The energy space is going to consume a lot of metals in the next 10 years and we’re short in key commodities,” Hills says. “Copper, nickel, lithium—these are critical materials. If there’s a shortage of a material necessary for making microchips, the whole supply chain falls off. It’s one of these things people don’t realize: how to make renewable energy happen.”

This past spring, Hills says RCF furthered that cause through a complicated joint venture at a northern Chilean copper mine. The mining company, Pucobre, committed $290 million for a 76.32 percent interest while RCF assisted in contributing $90 million for the remaining shares.

Sealing that deal took some doing, Hills collaborating with RCF’s Santiago personnel and journeying to the Chilean capital for due diligence and face-to-face negotiations, which he prefers.

There’ll be more deals to announce, Hills describing how RCF constantly explores options for partial or full investments in mining operations worldwide, particularly those for the metals and minerals that’ll be in most demand for green technologies.

A lot for legal

As for his legal department’s role in this process, Hills breaks it into three main sections: managing the investments, regulatory compliance and contributing to the general business of this boutique firm with offices in the United States, Canada, Chile, Britain and Australia. His team of eight dedicated professionals—five lawyers and three support staff—span a large range of expertise and cover all time-zones in a 24-hour operation.

Managing the legal side of the deals is the biggest responsibility of the team, as RCF’s investment strategies focus on four areas. Prospective mining sites are always on the firm’s radar. Then there are the early-stage operations that show potential. Innovative technologies also can be a worthy investment, Hills says, describing how RCF has sunk funds into an electric conveyor belt system that’s safer underground since it doesn’t emit fumes. RCF also will extend credit to an operation that seems viable.

The sites often being a continent or ocean away, such management often involves arrangements with outside counsel and an eye on costs. There’s also the need for due diligence, documentation and exit strategy. RCF often holding onto its investments for several to 10 years, there may be mergers, initial public offerings or other refinancing mechanisms along the way.

Lines thus blur between managing and compliance, RCF being a regulated investment advisor in the United States and worldwide. As far as the business end goes, it’s everything from insurance to contracting to personnel.

Technology stands to help lighten the legal load while simplifying tasks for the investment team, and Hills has collaborated with infotech on that front. Everyone needing quick access to information, there’s a large in-house database that enables the investment team to fully understand issues such as political and legal risks in numerous jurisdictions. Also, much standard documentation has been automated, and that includes volumes of confidentiality agreements and consulting agreements, that for RCF are often business as usual.

From the startup

For Hills, it’s all part of being general counsel of the firm where he led an investment team for seven years after agreeing to the move to Denver. He’s actually been involved with RCF since its startup with him counseling it as a partner with the Perth firm of Wright Legal during the early and mid-2000s.

Convinced that RCF had legs, Hills left Wright Legal in 2006 to begin his 17 years-plus tenure and he’s comfortable with that long-ago decision as well as his move to the United States. Much as he enjoys Denver, he’s relocating to the New Orleans area. His Southern-born wife is all for the move and Hills preferring surfing to skiing, he’s eager to hang 10 at the Gulf Coast beaches. They’re a family of achievers, the oldest daughter a teacher, the youngest a Loyola University student and the son a computer scientist.

And for Hills, there’s much yet to achieve as RCF pursues more opportunities to invest in progressive mining operations.

“I really like my role because it brings a lot of benefits you don’t have in private practice,” says the Murdoch University law graduate. “There you’re never too close to the client. Here we are the client.”

View this feature in the Vanguard Fall I 2023 Edition here.

Published on: August 25, 2023

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