Capital Markets Starting to Thaw for Miners, Toronto Bankers Say – by Scott Deveau (Bloomberg News – March 8, 2016)

The biggest rally in mining stocks since the aftermath of the financial crisis is opening the door for producers to return to the equity market in their ongoing battle to reduce debt, according to bankers in Toronto.

While the Bloomberg World Mining Index retreated on Tuesday, it surged 16 percent in the past month, the steepest four-week rally since August 2009. Metal prices have also rebounded, with gold up 19 percent this year. That shift in sentiment may mean that a pickup in equity deals this year will accelerate.

“We’ve all seen, thankfully, a much better start to 2016 than we saw at the end of 2015,” David Shaver, managing director of mining and metals at RBC Capital Markets, told the annual PDAC convention Tuesday. “Capital is beginning to flow back into the mining sector.”

Miners raised $5.6 billion globally in equity markets in the first two month of 2016, compared with $1.4 billion in the final two months of 2015, according to data compiled by Bloomberg.

Gold Focus

Still, investors are being very selective and primarily focused on gold, he said. Money is coming mainly from traditional mining investors rather than generalist portfolios, Shaver said during a panel discussion. Bond markets remain virtually closed, he added.

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