By Thomas Balogun, CSyP 10 January 2026
RIYADH — In this article, I outline my perspective on why strong #mining projects often fail to attract private equity capital.
Over the last 12 to 24 months, I have reviewed dozens of responses from private equity funds active in the mining space, and one thing became very clear to me: the feedback was not random. In fact, it was remarkably consistent. That consistency is the real insight. These were not emotional rejections or subjective opinions. They were precise signals pointing to structural gaps between the deals being presented—often with out-of-the-world, non-realisable funding expectations—and the way private equity investment committees are trained to underwrite risk.
Time and again, the language was almost identical. “Too early stage.” “Lack of resource definition.” “Need drilling or a near-inferred resource.” “Minimum PEA or PFS required.” “NI 43-101 certified report required.” At first glance, comments like these can feel dismissive. In reality, they are simply describing where private equity sits on the mining risk curve.
When exploration-stage or early post-discovery projects are presented, I quickly learned that private equity does not operate there. PE funds typically enter at late PEA, PFS, and occasionally DFS. By that point, geological risk should largely be removed. Discovery risk, early drilling risk, and uncertainty around whether a resource even exists are not priced by private equity. That risk belongs with venture capital, strategic junior miners, or project generators. The root issue is not project quality, but timing. These deals are being shown one full risk layer too early for the capital being targeted.
Scale is the next issue, and it comes through just as clearly. Comments such as “under 200 thousand ounces is light,” “25 thousand ounces is too small,” or “100 thousand ounces is on the smaller side” are not critiques of geology. They are reflections of fund economics. Private equity thinks in terms of minimum cheque sizes, portfolio construction, and absolute dollar returns. If a project cannot absorb a $25–75 million equity cheque, or if the resulting NPV is too small to materially impact fund performance, it simply does not work. Small deposits fail not because they are unviable, but because they are not institutionally scalable.
They do not move the needle, and they introduce concentration risk.
In some cases, I noticed that funds were willing to look past lower grades or technical complexity—but only if there was clear upside leverage. What they asked for was telling. They wanted to see near-asset exploration targets, advanced targets that could be added to the existing resource, and a credible pathway to materially expanding the resource base. What they did not see clearly was a district-scale story, multiple parallel targets, or a platform capable of growing well beyond the initial asset. Too often, opportunities were framed as single-asset outcomes rather than scalable systems. Private equity can tolerate complexity, but it needs upside optionality to justify it.
Jurisdiction came up repeatedly as well, and this is where many people misunderstand the conversation. When funds say the Central African Republic, Zimbabwe, Mali, Sudan, Venezuela, or Colombia are not jurisdictions of focus, this is not a judgment on the country or the geology. It is mandate-driven. LP constraints and limits, ESG exposure, sanctions considerations, and exit liquidity all play a role. If a jurisdiction falls outside the mandate, no amount of persuasion changes that. This is non-negotiable, regardless of asset quality.
Another recurring theme was documentation. Requests for NI 43-101 reports, block models, metallurgical testwork, PEA or PFS studies, financial models, and clear sources-and-uses frameworks are not hurdles raised late in the process. They are basic entry requirements. When these documents are missing or incomplete, it signals that technical risk has not yet been underwritten and that the project is still being framed narratively rather than institutionally. Private equity committees do not debate narratives. They underwrite data.
Economics also matter in absolute terms, not just percentage returns. One comment in particular stood out to me: “Capex of around $30 million with an NPV just above that falls below our usual ticket sizes.” Even if IRR looks attractive, if the absolute dollars returned are small, the project fails investment committee. Private equity does not chase marginal NPVs or low-multiple projects. It needs scale in both capital deployed and capital returned. Projects can be viable and still not be fund-viable.
Commodity exposure and cycle positioning also play a role. Some funds are already full in graphite or anode materials. Others have stepped back from lithium due to grade, cost intensity, or cycle fatigue. Private equity actively manages commodity concentration and downside protection. Entering a crowded or fatigued commodity at the wrong point in the cycle can be enough to pass, regardless of project fundamentals.
Taken together, all of this points to a single meta-lesson. This is not a rejection of the deal originator, and it is not necessarily a rejection of the assets themselves. It is a capital stack mismatch. Good early-stage projects are being shown to late-stage capital. That is not failure. It is sequencing.
The structural fix is straightforward, but it requires discipline. Greenfield and early exploration assets should be directed toward strategic miners, project generators, listed juniors, family offices, and, selectively, toward sovereign or state-linked capital. Before private equity ever sees a deal, it must be reframed. That means a clear pathway to 300–500 thousand ounces or more, a PEA or PFS underway, a documented expansion strategy, a district or consolidation story, and a defined capex and funding plan. Internally, pipelines must be segmented deliberately into generator assets, PE-ready assets, and future PE assets that remain milestone-dependent. Mixing these categories wastes time and blurs positioning.
The strategic upside, however, is significant. Receiving this level of consistent, repeated feedback is a gift. It tells me exactly where the valuation cliffs are, which milestones unlock which pools of capital, and how to engineer projects toward the right investors rather than hoping investors adapt to the project. Very few originators get this level of clarity.
In the end, the problems are clear. The deals are too early stage, too small in scale, insufficiently defined, lacking documented upside, misaligned on jurisdiction, incomplete in technical and economic documentation, or below fund thresholds. None of these are fatal. But they demand different capital, different sequencing, and a far more deliberate strategy.
That is how real mining platforms are built.
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