http://www.theglobeandmail.com/newsletters/streetwise-and-rob-insight-newsletter/a-troubling-sign-for-mick-daviss-x2-fund/article29794187/
A troubling sign for Mick Davis’s X2 fund
The Globe and Mail
Published Thursday, Apr. 28, 2016 7:10PM EDT
Last updated Thursday, Apr. 28, 2016 7:12PM EDT
The Caisse de dépôt et placement du Québec has slashed its investment in X2 Resources Partners LP Inc., a potentially troubling sign for mining magnate Mick Davis’s fund.
The Caisse reduced its position in X2 to between zero and $5-million at the end of 2015 from as much as $30-million in the previous year, according to the Quebec pension fund’s documents released in April.
Mr. Davis, the former Xstrata chief executive officer with a sterling reputation, easily raised $1-billion (U.S.) in 2013 to start his own mining venture. He has since raised up to $5.6-billion from investors when most of the mining industry has been begging for cash. Of that amount, $4-billion is committed capital, which can be spent immediately, and the remaining $1.6-billion can be spent under certain conditions.
But X2 has yet to deploy any of its capital even as mines are increasingly put on the auction block amid a prolonged commodities downturn.
The problem for Mr. Davis is that his investors must sign off on any deal before he can pull the trigger, sources said. The other difficulty is that the investors expect a higher rate of return on their investment, making it harder for X2 to compete with mining companies for the same asset.
Some investors have privately expressed frustration with what seems to be a lack of progress, sources said
