Strategic private placements, private equity and joint-venture partnerships are playing an increasing role in financing exploration and development projects in the mining sector, a group of Canadian bankers agreed during a panel discussion at the Prospectors & Developers Association of Canada convention in Toronto.
“It’s a pretty interesting shift both on how juniors are trying to finance their business and also how larger companies are trying to grow,” Chris Gratias of CIBC Capital Markets said in his opening remarks.
If you look at the amount of equity capital raised between 2013 and 2015 on the Toronto Stock Exchange for juniors – companies he categorized as having a sub-$500 million market capitalization – about 80% to 85% of it would have come from the public markets or investors, he said, and 15% would have come from strategic private placements. In the last 12-18 months, by contrast, 60% has come from strategic private placements and 40% from the public markets.
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