Market uncertainty creates major challenges for critical mineral exploration – by Aya Dufour (CBC Sudbury – November 6, 2023)

Some companies are at risk of going under as commodity prices sink

Many in the mining world are used to the cyclical nature of the industry. But prospectors and the smaller junior exploration companies that carry out most of the work to find critical minerals are particularly vulnerable to the whims of the market. Unlike their larger counterparts, most juniors cannot rely on production revenues and depend entirely on the stock market and investors for the money they need to advance projects.

These companies cannot wait for more favourable market conditions before making a move as they must do a certain amount of exploration work every year to hold on to their claims. This is why the current economic slowdown is creating major obstacles for critical mineral exploration.

Midex Resources, for example, has poured a lot of money in five northwestern Ontario lithium projects in the past years, but the latest market slump means the company has to find other ways to stay afloat if it wants to continue its work.

It was planning on listing its shares on the stock exchange to raise money until lithium prices started dropping. “It’s all about timing,” says president and CEO David Jamieson. “If we had gone through that process last year, we wouldn’t have had any problems because lithium was red hot then.”

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