Transcription of Finance News Network interview with director, Gary Cochrane of Novus Energy Fund.
Clive Tompkins: Hello Clive Tompkins reporting for the Finance News Network. Joining me to discuss a new vehicle for investment in the energy sector is Gary Cochrane. Gary welcome to FNN. You are one of the directors of the Novus Energy Fund, how much are you looking to raise, where will the money go and will the Fund be listed?
Gary Cochrane: We are looking to raise between twenty to thirty million dollars and the funds will be used in the energy sector for coal, coal seam methane and underground coal gasification projects. We expect most of these projects will be pre-IPO and we will probably take equity positions or in some instances, there may be some credible notes.
Clive Tompkins: Energy has certainly captured people’s interest in recent years. Can you tell us more about the initial targets for the Fund and their prospects?
Gary Cochrane: Yep, the initial targets are several smaller and private coal companies, exploration companies that are operating in the Bowen Basin and also in the Surat Basin, mostly for coal tenements. But the coal seam gas and underground coal gasification also have tenements in that area, but there are some in the Surat Basin just west of Brisbane.
Clive Tompkins: Your PDS states that target companies will preferably be at the pre- IPO stage with a view to exiting those investments within three years. Why the attraction to companies at the pre-IPO stage?
Gary Cochrane: We think that would give us the best return and the best opportunity. There is certainly a higher risk than at a later stage, but generally in our own experience, certainly amongst the number of directors, is if you can get in at that stage - after early exploration so there is still at least quite a bit of drilling has been completed, but you are getting into detailed feasibility studies. There’s quite a bit known about these projects but they still lack the funds that they need for construction or more mature development - but the multiples are then generally much larger.
Clive Tompkins: And how big will each investment be?
Gary Cochrane: We are looking at a range but it would generally be between one to two million dollars for each investment.
Clive Tompkins: Last question. The offer is open to sophisticated investors. What’s the minimum investment and when does the offer close?
Gary Cochrane: The minimum investment is twenty thousand dollars and then that can be increased by lots of ten thousand dollars. At this stage we are still finalising the prospectus, but it is anticipated within the next four weeks that we would have - we start to look at finalising the prospectus and the target dates for raising the funds.
Clive Tompkins: Gary Cochrane, good luck with the Fund.Gary Cochrane: Thank you.
