• Funding junior mining projects in Australia

A recent roundtable discussion with mining directors and executives in South Australia, explored industry experience in attracting capital and bringing projects to market.

While overall market sentiment appears to be improving, it was clear that this improvement was not being experienced at all levels. As a result, it was interesting to discuss the underlying and continued struggles in attracting capital and bringing development and early stage exploration projects to market.

These difficulties continue to contribute to the shift in the market's expectations and pricing of exploration equity capital – with significant discounts still being expected when undertaking placements and share purchase plans. It may also be because, although the Junior Minerals Exploration Incentive (JMEI) scheme has generally been seen as a positive introduction for the industry, the benefits have not translated into the investment community and often ignored.

Directors also feel like Australia is going through a ‘risk off’ period in respect to early stage exploration projects.  This is being felt in both the equity and debt markets, with a general opinion that Australian lenders currently have a low appetite for financing small to medium sized resource projects. In recent experiences this has meant by the time a project has been de-risked and developed to an acceptable level to secure project financing, the broader market has shifted.

So what tips emerged for junior mining companies looking for funding?