Saturday, April 12, 2014

Mining financing in times of crisis

Miners don’t need banks – writes Barry Sergeant at MineWeb. Indeed, he mentions - mining companies have raised USD 30bn, directly from keen investors keen to lock in great value. This is good analysis with a table having appropriate data. I would strongly disagree. Probably now, but later on…
And now, we also have heard remarkable news about the stock markets.
Real Gold Mining, a gold miner based in Inner Mongolia, has raised $132 million in its Hong Kong listing on February 23. To my thinking this is a really important event. In an environment of Financial Armageddon – here you are with the IPO – the first in Hong Kong since October last year. Individual investors and resources funds participated, as well as a good number of investors from the US, Canada, and China.
Despite all the crisis woes,  almost every week we see that some companies make announcements of their IPO plans – the latest being Delta Mining Consolidated Ltd., which has interests in coal and iron ore. The Johannesburg-based company may buy assets in Angola, Congo Republic and Cameroon, where potential acquisitions have been identified.
That supports my remark in earlier post that there is money in the market and the declaration of the death of mining financing are not exactly true.
Here I would like to address the readers to two worthy of note documents. First is – actually are two - posts of a very productive analyst Mr. Thomas Su, whose blog I read with pleasure.Here, among the latest - you may find discussion “Capital Raising Strategy for Mining and Resources Companies “ : “Money is still out there and we are talking in terms of billions” – that is what I agree 100%. “ And another thing – I cannot stop from making advertising for this event:“ Hedge funds, especially those based in North America, Europe and increasingly coming out from Asia have also taken large stakes in many junior resources companies – and prepare themselves for potential profits coming out from takeover activities.” This is worth to read and comprehend.
Another document is produced by the renowned consultancy company - Behre Dolbear - BEHRE DOLBEAR GROUP INC. 2009 RANKING OF COUNTRIES FOR MINING INVESTMENT WHERE “NOT TO INVEST” .

 So, money is there, opportunities are there – let us see the contestants….

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