Attracting risk capital back into grass roots mineral exploration will be a major focus of this year’s Prospectors and Developers Association of Canada conference.
PDAC continues to be a premier networking event on the mining conference calendar, one that is expected to draw a crowd of 25,000 to the Toronto Convention Centre, including delegates from 103 countries.
Organizers of the 2015 conference, which kicks off next weekend, are grappling with beaten down stock valuations and a severe shortage of cash at the key junior exploration end of the sector.
So it’s not surprising to see a program lineup that includes topics such as “how we get risk capital back” and "crowd funding financing for junior mining companies."
[The roster of speakers includes Marcus New, Chief Entrepreneur at InvestX Capital Ltd., the first institutional private equity platform syndicated for retail investors. New, who is also Chairman of Stockhouse, will discuss the current state of crowd funding in Canada.]
Mindful of current challenges in the sector, PDAC is making a big effort to put the spotlight on prospectors seeking to fund grass roots properties by placing their core displays at the conference entrance, a spot that was previously occupied by a golf show.
It means prospectors and their rock samples are the first thing that delegates will see when they are heading up the escalator on route to the trade shows and speaker sessions.
“They [the prospectors] will get a bit more prominence than they had before,” explained Andrew Cheatle, PDAC’s new Executive Director, during an interview with Stockhouse.
But despite fears of a drop in attendance, the convention will offer few other concessions to hard pressed exhibitors who still have to cough up around $3,000 to pay for booth space this year.
Evidently, this is because the conference organizers think they shouldn't have to.
“PDAC still represents extraordinarily good value,’’ said Cheatle, an English Royal School of Mines graduate who recently replaced Ross Gallinger in the role of executive director. He was president and ceo of
Unigold Inc. (
TSX: V.UGD,
Stock Forum) before taking on the PDAC role in January.
“Our cost of entry is very much lower than many other conferences,’’ he said. “Our investors exchange still remains free and open to the public as does the Prospectors Tent and Core Shack.”
Besides, he said, a recent flurry of deals and financings is a sign that it’s not all doom and gloom in the mining sector.
“So far this year we have seen in excess about $1.3 billion raised for the more senior projects [headed by actual producers],’’ Cheatle said.
That includes a $162 million bought deal offering for
Detour Gold Corp.’s (
TSX: T.DGC,
Stock Forum) Detour Lake project near Cochrane, Ontario.
Romarco Minerals Ltd. (
TSX: T.R,
Stock Forum) also raised $300 million in bought deal financing for its Haile Gold Mine in South Carolina.
Cheatle also notes that
Centerra Gold Inc. (
TSX: T.CG,
Stock Forum) recently did a $300 million deal with
Premier Gold Mines Ltd. (
TSX: T.PG,
Stock Forum) to fund the Hardrock gold project in the Geraldton-Beardmore area of Ontario.
“In terms of the junior sector, the more grass roots, higher risk work, we haven’t seen as much activity in terms of financing,’’ he said.
However, he said PDAC continues to try and help those companies by acting as an advocate for flow-through shares and mineral exploration tax credits. These are tax driven financing mechanisms that aim to limit the downside risk for the investor, while acting as a catalyst for people to put money into the sector.
As usual, the 5-day conference offers exhibiting companies the opportunity to come face to face with investors and potential financiers in the trade show halls.
Attendees can also check out a speaker list that includes some of the biggest names in the industry.
This year, for example,
Ivanhoe Mines Ltd. (
TSX: T.IVN.R,
Stock Forum) Executive Chairman Robert Friedland will kick off the Commodities and Market Outlook session on Sunday, March 1, by leading a discussion titled “Minerals for a sustainable future in a global mega city era.”
One of the mining sectors most successful financiers, Friedland will also feature prominently during the PDAC awards night ceremony as Ivanhoe is the winner of this year’s Thayer Lindsley Award. This is in recognition for its Kamoa Discovery Team.
Kamoa is located in the Democratic Republic of Congo and ranks as the world’s largest undeveloped copper discovery, with an indicated resource of 43.5 billion pounds of copper.
Other award winners include David Palmer, President and CEO of
Probe Mines Ltd. (
TSX: V.PRB,
Stock Forum), which recently agreed to be swallowed up by
Goldcorp Inc. (
TSX: T.G,
Stock Forum) in a $526 million deal.
Palmer is being recognized for Probe’s Borden Gold Project near Chapleau, Ontario.