But investment flowing back into junior exploration mining sector might bypass B.C. because of new government
Initial public offerings, mergers and acquisitions, major financing deals – the signs are abundant that a five-year drought for the junior mining sector might be truly over. And while B.C. hosts the majority of Canada’s junior exploration companies – not to mention commodities, like copper and gold, that they are prospecting for – at least one mining consultant fears that little of the investment now flowing will be spent on exploration in B.C.
The turnaround for the mining sector started about a year ago with a rebound in metal prices. Mining majors are typically the first to benefit from higher metal and mineral prices and renewed investor confidence. Investment in the higher-risk early-stage exploration sector always lags.
But money is again flowing to juniors with projects at the late-exploration or early-development stage, according to several reports and indicators.According to PwC, there were five junior mining IPOs on the TSX Venture Exchange in 2017’s first half compared with none in 2016’s first half. PwC estimates that $39.2 million was raised on the venture exchange in the first half of this year.
“I think, for the most part, that really was junior mining related,” said Dean Braunsteiner, PwC’s IPO services leader. “That’s a pretty important statistic because if you look a year prior to that, the first half of the year, there was zero that was raised on the venture exchange.”
“One very interesting thing – comparing May 2017 and May 2016 – is how much more of a focus on junior companies that there is,” said Jonathan Buchanan, public affairs director for the Association of Mineral Exploration BC. “It’s been a very long time in coming.”
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