baker_steel_capital_managers_llc_logoThe London-based gold fund, Baker Steel (named after co-founders Trevor Steel and David Baker), have made their first investment in shale oil.  The investment firm has solely focused on metals companies, but given the similarities between the extraction and processing of shale oil and metals, the firm is comfortable with the space.

Baker Steel bought 3.3 million shares of London-listed Global Oil Shale Group Plc at 53 pence (for total proceeds of 1.75 million British Pounds or roughly CAD$3.2 million).  This represents a 5.8% stake in the company.

Global Oil Shale is a private explorer and developer whose Julia Creek deposit in Queensland, Australia holds 2.18 billion barrels of shale oil at between 40 and 90 litres per tonne.

The Global Oil Shale controlled Julia Creek deposit covers an area of 605  square kilometres and represents approximately 10% of the current known oil shale resources in Australia.  The company also recently signed an MOU to develop a shale oil deposit in Morocco.

Oil shale is a fine-grained sedimentary rock containing organic matter that yields substantial amounts of oil and combustible gas upon destructive distillation. It is amenable to large scale strip mining methods.

In a statement, Baker Steel said that the stake is its first investment in the energy part of the mining sector and in Australia. It said the investment "provides exposure to a nascent industry which is yet to be focussed on by mainstream investors."

Baker Steel Resources Trust, which was the vehicle that bought the shares of Global Oil Shale, holds shares in a number of public and private mining companies including: Ivanhoe Mines, China Polymetallic Mining, Bilboes Gold and others.

Read: Baker Steel Places Shares to Fund Global Oil Shale Investment