RAB Capital

RAB Capital PLC/RAB Special Situations Master Fund/RAB Special Situations Company Ltd/RAB Energy Fund

As revealing a statement as any, made by this leading hedge fund to denote its true purpose, was proffered by RAB in its Capital Situations Company Ltd annual report and accounts for 2007:

"Sadly our two largest holdings, Oxus Gold and Global Coal Management (formerly Asia Energy, now GCM Resources) lost US$85 million (or 12% of the Master Fund's starting NAV} between them, due to extreme local political difficulties which can be judged by the fact that people were shot in both locations" (!).

RAB then goes on to say: "We have bought more of both stocks and believe we will make good returns in the future..."

RAB had (still has?) a stake in Ascendant Copper, the Canadian junior whose misdeeds (including use of a private security force which launched attacks on local community protestors in Ecuador) are the subject of the 2006 award-winning film “The Cost of Copper.”

In 2008 it was:

• the biggest single shareholder (27.28%) in Oxus Gold PLC (operating in Uzbekistan) [Hemscott 13 February 2008].

• the second largest shareholder in Kopane Diamond Developments PLC [Hemscott 12 February 2008].

In 2007, RAB Capital launched a Global Mining and Resources Fund, worth US$ 171 million at the end of that year [RAB Capital annual report 31 December 2007].

RAB Special Situations (Master Fund) Ltd was in 2008 the second biggest shareholder (7.19%) in Coal International PLC which has operations in West Virginia and interests in coal properties in Canada and the UK [Hemscott 14 February 2008].

It was also:

• the biggest shareholder (29.90%) in Carnegie Minerals PLC [Hemscott 11 February 2008];

• the leading shareholder in African Eagle Resources PLC (17.63%);

• number one shareholder in Kalahari Minerals PLC (total of 21.42%) [Hemscott 12 February 2008];

• owner of 4.95% of African Copper plc [Hemscott 23 January 2008]; and

• holder of 4.04%. of Lonrho PLC. [Hemscott ibid]

• holder of 3.72% of Target Resources Plc (see JP Morgan Asset Management)

• holder of 7.88% in African Minerals Ltd (see Prudential PLC) [Hemscott 3 August 2009]

In 2007, it held 19.40 % of minerals exploration company, Cambridge Mineral Resources plc, on behalf of client, Credit Suisse Client Nominees (UK Ltd) [Cambridge annual report, 14 June 2007].

In May 2008, RAB Capital PLC held 25.96% of GCM Resources (formerly Global Coal Management, earlier Asia Energy plc), the owner (though ownership has been disputed) of the Phulbari coal lease in Bangladesh. However, at the end of January, Polo Resources Ltd (qv), listed on AIM, agreed to buy out the majority of RAB’s stake (20.5%). As of 20 February 2008, Polo held 8.8% of GCM, while Polo’s chair, Stephen R Dattels (qv) owned a personal stake of 5.77% [Hemscott 20 February 2008].

By 9 June 2008, RAB’s stake in GCM Resources had fallen below the notifiable 3% level.

RAB Capital also sold out its stake in Central African Gold PLC at the end of January 2008 [Hemscott 28 January 2008]. Just over four months later, it sold its entire (21.85%) stake in Maghreb Minerals Plc.

As of February 2009, it was the largest single shareholder in African Eagle Resources PLC (with nickel holdings in Tanzania and a copper J V in Zambia) [Hemscott 12 February 2009]; also the biggest stakeholder (at 16.61%) in Amur Minerals Corp, a UK-listed company exploring in eastern Russia [Hemscott 12 February 2009].

As of January 2009, RAB Special Situations LP was the third biggest shareholder in African Minerals plc (see Prudential PLC) [Hemscott 22 January 2009], and second largest (at 4.98% in Minco PLC (see Barclays) [Hemscott 14 February 2009].

In August 2009, RAB Capital was the third biggest shareholder (at 6.56%) in Toledo Mining plc (see Daintree Resources Ltd) [Hemscott 15 August 2009].

The main corporate shareholders in RAB Capital PLC in 2008 were:

• Karrick Ltd,

• Santino Global Assets Ltd,

• Sofina SA,

• Credit Suisse First Boston Equities (4.18%),

• Morgan Stanley (3.79%)

[Hemscott 10 June 2008]

The main shareholders in RAB Special Situations Company Ltd were:

• the Danish local authority workers’ Pension Fund,

• Kommunernes Pensionsforsikring (14.75%) and

• Sweden’s state AP Pension fund(13.81%),

• followed by JPM Multi-Manager Growth Fund (5%)

• and Henderson Absolute Retirement Fund (4.38%)

[Hemscott 24 February 2008]

During 2009, the value of RAB's extensive investments in mining had fallen dramatically. While they had recently peaked at more than US$7 billion, by February 2010 they had slumped 80% to around US$1.4 billion [MJ 26 February 2010].

RAB's flagship RAB Special Situations Fund had to be "locked up" to prevent clients precipitately redeeming their investments, and the Fund thereupon proceeded to auction their stakes [MJ 26 February 2010, ibid].

RAB Special Situations (Master) Fund Ltd in February 2011 held 5.29% of African Minerals Ltd, acive in Sierra Leone [Hemscott 22 February 2011].

Then, in May 2011, RAB Capital - as the Mining Journal put it, "the doyen of investors in the exploration sector", announced that it would likely de-list from the London stock exchange, after some investors had exercised their right to "redeem" (claim back) their investment.

This followed RAB's imposition of a 2008 moratorum on redemptions, which expired in April 2011, and the revelation that, by the end of last year, RAB had less than US$1 billion under management.

Nonetheless the firm still expressed optimism that it would be to "re-organise" itself at a later date [MJ 13 May 2011].

This expectation seemed eroded somewhat, the following month, when Hong-Kong-based Sunway Group (owned by the Choi family) announced it intended to acquire RAB's energy and octane funds, in order to found a "large-scale" hedge-fund business based in London [MJ 1 July 2011].