Teeka Tiwari has a big teaser pitch out right now for “Deal #12”, which is launching with a presentation tonight (8pm EST, October 6), and will presumably lead into a sales pitch for his Palm Beach Venture newsletter (which has a list price of $5,000/yr, though those letters are never promoted at full price) — with the payoff being that he’ll connect you with private equity investments into companies that are not yet public, but hope to use a wave of private financing to raise enough money to make it to the next step, and perhaps get a public listing in the future. We haven’t seen the presentation yet, of course, so maybe he’ll be selling one of his other products… but he’ll surely be selling something.
This is a slippery area to operate in, because Teeka Tiwari and other newsletter pundits who try to steer folks to private placements are acting sort of like brokers and investment bankers, and want to give you that feeling that they alone can get you into this hot deal and get you the insight you need… but to stay at arms length a little he’s really just hinting at that investment in his ads, and probably in his presentation will tease it as a high conviction idea and recommendation, with boilerplate language about risk, but, once you cough up your $5,000 or $2,400 or whatever, will pass you off to the company itself so you can decide if you want to invest. Again, I’m guessing here just based on the many “pre-IPO” pitches we’ve looked at over the past few years, since Teeka hasn’t made the presentation yet, but most of them seem to walk that fine line.
And the hints he drops in the teaser videos, which have a “Indiana Jones going into the jungle to find treasure” vibe, including shots of Teeka climbing into a seaplane, are almost nonexistent… but I did pick up a couple things from the videos… mainly that he’s researching some kind of project or company in the Amazon river area, that his meetings about this project were in Brazil, and that one of the folks at the table with him at those meetings was Stan Bharti, the longtime junior mining investor and banker (he runs Forbes & Manhattan, which is a merchant bank, though I think of it as sort of a venture capital/early incubation/advisory firm for mineral exploration companies).
So what does that tell us?
Well, from that limited bit of information, the Thinkolator points us toward the active private fundraising campaign underway from Brazil Potash, a company that is trying to raise capital to get a little closer to construction on their first potash project, which they call the Autazes Project, in the Amazonas region of northwestern Brazil.
We can’t know for sure whether this is what Teeka will pitch tonight, of course, he didn’t actually drop many intentional or specific clues about the project, but we know that for a big marketing campaign like this, to a very large mailing list, it has to be a pretty accessible deal that can be done almost self-serve, without Teeka as the newsletter pundit holding your hand and getting too close to being a fiduciary who has to be legally looking out for your best interests, or deciding whether a risky private placement in a prospective mining company is the right match for your needs.
What does the presentation say? Mostly it’s a big-picture argument about the opportunity that a big potash producer would have in a major agricultural area, where potash has to be imported from overseas… but we get into some details: They are not quite in construction for this project, but are “near construction ready” and have a deal with CITIC Construction, the big Chinese state-owned global construction company, to both finance (with equity and debt) and build the project (though I haven’t seen what the terms of that deal are, or how firm it is); They provide some projections for future EBITDA and offer comparisons for that hypothetical future against the current multiples of the big fertilizer companies, which tend to trade at an Enterprise Value (market cap plus net debt) of 5-8X EBITDA. If they can hit their projected “base case” production, which they do not explain in any detail in the presentation, that could generate $718 million in EBITDA in their base-case pricing scenario ($334/tonne for Brazilian potash prices — they’re been swinging up to $600 or so in recent months, but that may not be sustainable).
The company’s own website reminds us of the long time horizon and the inherent challenge in developing new mineral extraction projects — they say the began exploration in 2009, presumably identified their target area in