NEW YORK (Reuters) – Junior miners, struggling to fund exploration as institutions seek lower risk and better returns from larger rivals and newer industries, sought to sell potential investors on projects on Thursday, with mixed success.
The proliferation of index funds, sluggish gold price growth and a shift into cannabis and cryptocurrencies by risk investors has left junior miners short of funding. While the mining industry has seen a tentative revival in interest, much of that capital has flowed to larger producers.
“There has never been greater divergence between big and small companies in the mining sector. Big companies are healthy. … They have a lot of (earnings),” Peter Grosskopf, chief executive of asset manager Sprott Inc, said at the Mines and Money Conference. “The juniors are nowhere near that.”
Ian Berzins, CEO of Braveheart Resources Inc, said the company is close to completing development on its British Columbia gold project, thanks to flow-through funding, but needs capital for future exploration.
Flow-through funding allows companies to pass on to investors tax deductions related to exploration or development.