Mining juniors in crisis – gold explorers particularly badly hit – by Lawrence Williams ( – January 25, 2013)

The junior gold mining and exploration sector is currently at a very low ebb – but the better juniors will survive regardless and now provide tremendous opportunities for the savvy investor.

LONDON (MINEWEB) – Feedback from the Vancouver Resource Investment meeting last week suggests the junior mining crisis is really hitting home and unless there is a turnaround soon a significant number of junior gold explorers in particular will no longer be with us even by mid-year, and certainly not by this time next year.

A conference and exhibition primarily involving junior miners and explorers, and particularly one taking place in Vancouver where the largest proportion of North American juniors are headquartered, is an excellent venue for judging the state of the industry.

And on reviewing this year’s Cambridge House event the junior mining sector is in a precarious state at present with companies finding it difficult, if not impossible, to raise new funds to keep themselves afloat.

Stock prices are so low that new share issues are not really an option, while banks and financial institutions are just not prepared to take the risk of lending to companies in a sector that, even in good times, can prove a risky one for which to provide finance.

Reports from the event note more seating areas taking up empty booth spaces (presumably for companies which may have already paid for the space but just feel they can’t afford the expense of actually attending.) Apparently traffic through the exhibits on the first day of the event (last Sunday) appeared lower than in previous years, although it did pick up substantially on the second day.

One exhibitor commented it was the quietest Sunday he’d seen for the show -Sunday normally being the busiest day of the event.

Much of the evidence picked up regarding the truly dire state of the industry was, of course anecdotal with comments made about other companies – few of those present being prepared to admit that they too are suffering that badly.

Nevertheless reports abounded of juniors with virtually zero cash in hand; of hordes (perhaps an exaggeration – what comprises a horde anyway?) of investor relations people looking for new jobs; rumours of no-shows; companies cutting down on display materials where they could; more and more companies banding together to share booths (and having plans to do so for future similar events).

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