Money returning for mining equity, bankers say

Sun Mar 4, 2012 3:59pm EST
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By Pav Jordan

TORONTO (Reuters) - There's a new appetite for equity financing in the global mining sector, as investors tiptoe back into a market that has fretted about funding for the last six months.

Boosted by firm metals prices and a less pessimistic outlook for a still-fragile global economy, many mining companies are again able to sell shares in secondary offerings or tempt investors with an initial public offering.

"The buyers are back, the window is opening again, and there are deals getting done for exploration," said Mike White, president of IBK Capital Corp, a Toronto boutique firm that specializes in equity financing for miners with projects under development.

The next opportunity for cash-hungry companies to strut their stuff comes with this week's Prospectors and Developers Association of Canada convention, known in the industry as PDAC.

If last year's figures are anything to go by, the annual Toronto conference, which opens Sunday, could draw some 26,000 participants, bringing prospective investors together with hundreds of explorers and miners - often small-scale outfits.

"We've certainly seen institutional money and more accredited investor/high-net-worth-individual type money going into exploration, and I think that will make for a great PDAC," said White. "I think there'll be lots of deals done."

Canada's importance as a mining capital is rarely more evident than during PDAC, the industry's largest annual event and a premier opportunity for investors to meet with mining firms.

"There's been a lot of money that came out of the market that's sitting on the sidelines looking for an opportunity to come back in, and there has been a lack of supply of new issues," said Chris Gratias, director and co-head of global mining at CIBC Global Markets.   Continued...