Junior Miners Need More Cash
Junior Miners Need More Cash
John Komarnicki recently secured $5 million in financing for his gold-mining company, Alhambra Resources Ltd.ALH.V-14.29%, but like many miners at this year’s Prospectors & Developers Association of Canada conference, he needs more.
The Calgary, Alberta-based company could need around $80 million to proceed with just one one of its Kazakhstan projects. Mr. Komarnicki is one of thousands of miners here in Toronto looking for more cash amid a continued downturn for junior miners.
“It’s been dismal for the last few years,” said Mr. Komarnicki, Alhambra’s chief executive.
Still, like many miners here, Mr. Komarnicki believes the industry has “hit a bottom.” His own company is seeing more interest from, in particular, European banks looking at potential financing deals. Other miners at the event talk of increased interest from private equity funds and specialist investors.
Bolstering a cautious optimism is a recent run up in the price of many metals. Gold, for one, is up 11% this year.
In the meantime, miners like Daniel Oosterman, chief executive of Canstar Resources Inc., are being “frugal.”
“Finance is difficult,” Mr. Oosterman said.
Paul Moore, from Buchans Minerals Corp., said miners can see the end of the downturn and now believe that the sector will be starting its turnaround by next year’s PDAC.
“It’s still a low, it’s just there is not the sense that the sector is falling anymore,” the vice-president of exploration said.
Miners attending PDAC said Monday that the halls seem emptier than usual. Many blamed a big snowfall over the weekend for the low numbers. Others said it was a reflection of the continued downturn in mining.
“In the past you would be hard pressed to walk down that corridor it would have been so full,” said Marius Mare, pointing to the walkway between two rows of the booths that miners hire. Mr. Mare, the vice president of exploration at CB Gold Inc., said the low turnout comes on top of what was seen as a quieter event last year.
PDAC itself said it still expects a full house this year. Attendance last year was slightly below 2012’s record of 30,147.
But the cubicle next to Jeff Stuart, an official from diamond prospector Arctic Star Exploration Corp.ADD.V+9.09%, is empty.
“I have a bad feeling that this is the last stand for some companies,” he said.