Canadian gold miners keen to tap equity market as gold price pops
By Euan Rocha and John Tilak
TORONTO Feb 22 (Reuters) - Initial public offerings in the Canadian market may be dead right now, but a bevy of publicly listed gold miners is scrambling to push through equity offerings to capitalize on a bullion price pop, bankers say.
With the price of gold above $1,200 an ounce for the first time in eight months, about half a dozen players are keen to take advantage of market conditions, said two bankers who asked not to be named to protect client relationships. They declined to identify the potential issuers.
"We're in a lot of dialogue. We expect there's going to be a few more," said the first banker, adding only select names will be able to tap the market and that the quality and structure of any offering remain key.
He expects most of the capital raises to range between C$20 million ($14.58 million) and C$150 million but sees chances of a bigger offering from a mid-tier or large companies.
"The bigger hurdle is who can come to market, not who wants to come," said the source. "It's a buyer's market for sure."
Erik Goldsilver, a partner at law firm Borden Ladner Gervais, said it will be harder for early stage exploration firms to raise money, as investors still view that part of the market as too speculative.
Many investors fled the sector amid a broader slump in gold prices and stock values since 2011.
Still the roughly 14 percent rally in the price of spot gold this year has at least some looking at bullion miners more favorably. Continued...