JOHANNESBURG (miningweekly.com) – The junior mining sector in South Africa has “huge potential” to grow and re-establish itself in the domestic mining environment; however, this potential is being blunted by a lack of funding, restrictive legislation and a lack of leadership from the Department of Mineral Resources (DMR) and government.
This is the sentiment expressed at the yearly Junior Mining Indaba, held earlier this month at The Country Club, in Auckland Park, Johannesburg. Speaking during a Junior Mining Indaba panel discussion on obstacles and challenges facing junior miners in the quest for funding, Botswana Diamonds executive chairperson John Teeling said there was simply “no money” and that it had been impossible for the bulk of junior miners to raise significant sums of money from equity financing.
Attempting to operate startup and junior mining companies during the past couple of years had been a “complete disaster”, he said. Teeling explained that the type of people who provided capital tended to do so at the end of a cycle, as “they have made a lot of money elsewhere and think that the future is going to be a little more rosy”, citing their intention to capitalise on any upswing in the mining industry.
With respect to the funding market changing its stance toward the junior mining industry in terms of its willingness to lend, Teeling noted, cautiously, that there was a “slight improvement”, implying that lenders appeared to be a little more willing to consider ‘sinking’ capital into junior mining projects.
However, it remained difficult “to get the type of private money or the small percentage of funds that go to very speculative investments”, he added. Reinforcing Teeling’s sentiment was Carton Capital director Markus Bachmann, who added that it was significantly difficult to access funding for the junior mining sector globally in most other mining jurisdictions, not only locally.
For the rest of this article: http://www.miningweekly.com/article/funding-dearth-restrictive-laws-and-lack-of-leadership-from-govt-stifling-sa-junior-miners-2017-06-30/rep_id:3650