 Backed by venture capital firm Truffle Capital, OSEAD was established in 2006
and specializes in the exploration and extraction of mineral deposits (lead, zinc,
copper, uranium, etc.). It has also developed a unique technology for extracting
hydrocarbons from tar sands and schists, which delivers energy savings while
protecting the environment. Truffle Co-Founder and General Partner, Energy,
Jean-Francois Fourt talked to us about the progress OSEAD is making in mining
and exploration in North Africa. "We are not high risk investors
Mr. Fourt has a solid background as a
Silicon Valley entrepreneur, a pioneer in
technology transfer, a specialist in
spin-offs from large companies, and an
expert in energy issues. He notably is a
former advisor to ABN Amro Capital
France in Silicon Valley. In total, he has
led 20 investments as a Silicon Valley
business angel. Today his many
responsibilities include that of board
member of ISIS-Innovation, Watteco,
Rf-IT (Austria), and Diestwell. He
additionally was a member of the Gaz
de France spin-off committee and
EDEN (European entrepreneurial
innovation hub in energy).
Currently his main focus is on Truffle
Capital, a leading independent
European private equity firm originally
set up for investing in spin-offs from
companies active in the Energy,
Information Technologies and Life
Sciences sectors. The firm is led by
Mr. Fourt and three additional
General Partners, each with decades
of successful investment and
entrepreneurial experience in both
Europe and Silicon Valley. Backed by an
investment team of international
experts, for a total of 12 professionals,
Truffle Capital aims to achieve superior
financial returns by leveraging its
industry knowledge, extensive
network, and operational experience
to identify business opportunities that
match latent market needs.
Truffle has three investment focus
areas: life sciences, information
technologies, and energy. In the latter
sector, Truffle founded OSEAD in 2006.
This company specialises in the
exploration and production of energy
resources, and has an exclusive licence
to patents and technology for the
extraction of hydrocarbons from tar
sands and bituminous schists, typically
found in Canada and Venezuela.
Following an investment by Truffle
Capital in 2006, OSEAD is pursuing
opportunities for uranium and other
mineral projects in Africa. In June 2008
OSEAD successfully listed its Moroccan
mining subsidiary, CMT, on the
Casablanca stock exchange. This year,
OSEAD established a subsidiary in
Mauritania, in collaboration with
Groupe AZIZI , and OSEAD's Moroccan
subsidiary Compagnie Minière de
Touissit ( CMT ).
 Groupe AZIZI is a partner of choice
because it holds (via its Macoba and
ID-Geoservices subsidiaries) the largest
number of mining permits (for
uranium, gold and iron) in Mauritania
- a country with some of the world's
most abundant uranium deposits. "We
are delighted with this collaboration
with a world-reputed Mauritanian
group. The agreement will enable us to
reinforce our mining exploration
activities in Mauritania. The country's
potential for uranium extraction has
been underexplored and the results of
our initial work are very encouraging",
emphasized Mr. Fourt. In addition to its
activities in Mauritania, OSEAD is
currently exploring in Ivory Coast and
plans to prospect in Algeria.
Mr. Fourt points out that OSEAD
already produces over 27kt of lead/
silver concentrate and almost 5kt of
zinc concentrate via its Moroccan
subsidiary CMT, which is also pursuing
an ambitious exploration programme,
notably in Morocco. CMT's partnership
with Groupe AZIZI is a great advantage
because, moreover than being one of
Mauritania's largest companies, AZIZI's
mine subsidiaries (ID-Geoservices)
can count on the strategic support
of its subsidiaries specialized in
complementary fields such as logistics,
construction, road & air transport and
goods handling. Interesting from the
African perspective is that there's a real
trend for international investors to use
Morocco as a springboard for investing
in Mauritania.
Mr. Fourt, who is responsible for energy
investments in the Truffle Capital
group, said that obviously as investors
they ideally aim for the energy
companies in their portfolio to make optimal use of group synergies. OSEAD
notably makes use of technologies
from Novad, a French spin-off from
GTI (Knauf Packaging) specialized in
the treatment and decontamination of
soils, water and air. The company
has patented technologies for the
fabrication of an adsorptive material,
Adsorpol™ that adsorbs hydrocarbons
and heavy metals. The company has
also developed products for water
filtration both above ground and for
decontamination of underwater
springs and water tables. These are
highly specialist technologies, added
Mr. Fourt. "Exploration is generally
seen as high risk but I believe that if
you're humble and focus on niche
market segments, you can be
successful in this space as an investor.
Truffle is not a high risk taker in the
energy industry in general. North
American VCs generally have much
more money to spend than us and
perhaps as a result take much higher
risks. We're also much more hands-on
than these North American investors.
We don't just invest; we start the
companies ourselves and subsequently
run the show."
 Back on the subject of Morocco: the
country has a long tradition and history
in mining said Mr. Fourt. According to
the Moroccan government, mining andrelated activities accounted for about
6% of national production in 2002.
Morocco notably is the number one
phosphates exporter in the world and
the 3rd largest producer. Twenty mining
products are extracted in Morocco,
including some with a significant
tonnage and on an international scale:
silver, gold, lead, zinc, copper,
manganese, barytine, and cobalt. "For
OSEAD that means there are plenty of
highly qualified people available locally
for mining and exploration," Mr. Fourt
pointed out. He also emphasized that
they're looking not just at Mauritania
for further prospects but also at other
countries in North Africa for areas with
good uranium potential.
Uranium is a delicate metal and the
market for it can be described as
equally delicate, some analysts would
argue. For a long time, the uranium
market was dominated by the
liquidation of inventories, both
commercial and military in origin. As a
result, price was depressed and
production and exploration efforts
were cut back. Over the same period
that production was stagnant, reactor
requirements were increasing as
utilities were able to increase their
capacity factors and uprate their
reactors. More recently, new demand is
emerging from China, India, and Russia as these countries seek to dramatically
increase their nuclear power
capabilities. As a result of these
changes, the excesses of the past
market have disappeared. As demand
increased and supply disruptions
appeared, inventories were consumed
at a faster rate. As a result, the market
for uranium has gone through a
transition from an inventory-driven
market to a production-driven one.
Production is said to be far below
requirements, which are growing,
which can only be good news for
uranium miners like OSEAD.
 Mr. Fourt too believes OSEAD has a
great future. "I expect that we can take
the company public within twelve
months, so before the end of this year.
" He said that you can basically take a
mining and exploration public at any
stage of development; realistically all
an exploration company needs is an
option for either ownership of a
mineral title, lease, patent, or other
such terms used. The mineral property
should have prospective work or
historical data available in order to
articulate the reason for exploring the
ground. It is generally considered
important to have a professional team
and good property. People have gone
public with less, however, when filing
from scratch, within this sector companies have shown patterns of
paying attention to these details since
there have been a historically large
amount of exploration companies that
have not been able to explore due
to property inconsistencies and
management. OSEAD has none of
these problems however: the fact that
it is already producing actually places it
in a pretty favourable position when
compared to the many mining and
exploration companies worldwide who
aren't anywhere near that stage, yet
already listed on the stock exchange.
"Taking OSEAD public won't be a
problem," Mr. Fourt agreed. "Overall I'm
very positive on the future of our
current investments. The problem for
us at Truffle is more of a prioritisation
issue. With so many opportunities laid
out for us, which ones do we choose?
And we need to keep raising money of
course."
About OSEAD's parent company
Truffle Capital screens proprietary technologies and products in large
European technology companies that present strong market potential but
lack corporate support. Truffle Capital estimates that the top 100
technology-driven European companies waste about 15% to 20% of their
R&D expenditures on projects that are not properly exploited when they fall
outside of corporate priorities. And we believe there is a great need for
private equity funding for these projects. In many cases, Truffle is said to
have approached management to suggest they consider selling a nonstrategic
asset. Truffle has completed spin-offs from major groups including
Areva, Abbott Diagnostic, Edap Technomed, Infineon, Inserm, Knaug,
Société Générale, and Schneider. Spin-off companies are an attractive
investment target according to Truffle since they combine the advantages
of a late-stage technology or product with a low risk profile and low
valuation at entry. This should result in faster returns on investment.
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