On the floor of the Mining Convention’s Investor Exchange or in the downtown offices, it’s still far too early to call for a market turn. PDAC 2015 was very low key, mixed with some faint hope, but still looking into the future for financing, especially for juniors in outlying jurisdictions.
There is optimism that the financing window that opened earlier this year for larger producers will remain open and consolidate. This would be the necessary precursor to investors looking downstream to take on exploration risk, but at the moment, there remains very little appetite for earlier stage juniors, perhaps even less so than what we saw at the Mining Indaba in Cape Town.
Retail was sparse. The floor of the Investor Exchange was very quiet and most of the badges were of Trade registrants rather than Investors. The larger institutional private equity groups were few and far between, very selective indeed and usually looking further along the development curve. That said, the occasional junior has attracted institutional PE investment.
Possibly more optimistic but also more difficult to assess, is the appetite shown by some private equity/family office type groups voicing interest in working out deals in development projects which have a very clear path to production and a 25% annual IRR.
As usual at the PDAC, hospitality was abundant and on a final note of optimism, larger non-industry focused funds are starting to look at moving into the mining sector for value. Just as it wasn’t “different this time” as the super cycle was taking commodities up, it isn’t going to be “different this time” as we patiently wait out the cycle’s low point.