Junior Exploration Sector

http://business.financialpost.com/

Despite the hopes of some critics, a culling of the TSX Venture Exchange is not about to happen. Venture president John McCoach confirmed that while the exchange is looking at every possible option to “revitalize” its business model, a mass delisting has been ruled out.

“We did look at that very seriously,” he said in an interview. “We think there’s room for making our continued listings standards simpler. But as far as moving the bar up or down, we think it’s in about the right place.”

The Venture has simply been mauled by the commodity price collapse and lack of financing for junior resource firms. The S&P/TSX Venture Composite Index, despite rising 11 per cent this year, is down an astonishing 83 per cent from its 2007 peak.

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http://www.theglobeandmail.com/

The chief executive of a junior mining company was frank when we recently discussed the merits of flow-through shares.

He has depended for years on peddling these shares as a way to fund his fledgling enterprises. There’s nothing unusual about that: Flow-throughs offer tempting tax breaks to brave investors, and they have long been a favourite way for early-stage oil and mining companies to raise capital.

But I had never grasped one of the additional reasons why resource entrepreneurs have become so fond of the program. “It’s quiet money,” the miner told me. “I get funding and I just about never hear from these people again. What could be better than that?”

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Canadian junior mining companies can breathe a sigh of relief as Budget 2016 extends a tax break for exploration companies that finance their exploration using so-called “flow-through” shares.

The federal government has extended the 15 per cent mineral exploration tax credit, which was slated to expire on March 31, until the end of March 2017.

“Given this is a challenging time for junior mining companies, the government proposes to support their mineral exploration efforts by extending the credit for an additional year,” the budget documents state.

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http://www.cbc.ca/news/canada/north/

The N.W.T. and Nunavut Chamber of Mines wants companies in the Northwest Territories to be able to stake mineral claims online, without having to go on the land.

The call comes as the territorial government prepares to set up its own rules — distinct from those inherited from the federal government after devolution — for how mineral claims are registered, explored and developed in the N.W.T.

The current regulations mean companies have to fly in and out of remote areas and mark the perimetre of their claims with a series of posts, a process deemed “onerous” by Tom Hoefer, the chamber of mines’ executive director.

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http://business.financialpost.com/

A steady stream of “shell” companies with little cash, assets or business plans marched onto public markets in 2014 and early last year. Now, under pressure from regulators, the Canadian Securities Exchange is taking significant steps to tighten that access.

An overhaul of the CSE’s listing requirements is in progress, the result of negotiations with regulators, primarily at the Ontario Securities Commission, sources say. The market watchdogs are understood to have been alarmed by the proliferation of these shells and the potential risk they might pose to investors.

The CSE, an upstart rival to the Toronto Stock Exchange, plans to introduce strict working capital requirements for newly listed companies, effectively pushing empty shells out of the picture.

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http://business.financialpost.com/

In mining, the great bifurcation is finally underway. After a multi-year bear market in which nearly every junior mining stock got decimated, the sector is enjoying an honest-to-goodness recovery in 2016. This year’s PDAC conference is ringing with renewed optimism as commodities, particularly gold, are rebounding.

But the early evidence suggests this recovery is limited to a very small group of companies. The high-quality juniors are raising money again and enjoying huge bumps in their share prices. Meanwhile, nothing has changed for most of the companies, which remains entrenched in an awful bear market with no end in sight.

During the commodity boom, the rising tide of metal prices really did seem to lift all boats. Hundreds of low-quality miners were able to raise billions of dollars of capital from willing investors. Venture-listed companies raised an astounding $4.2 billion from brokered deals in 2007 alone, according to Financial Post data.

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