6 LEXPERT
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2015/16
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WWW.LEXPERT.CA
Alternative Financing
IT'S LIKE ONLINE dating for the mining industry — not so much
PlentyOf Fish as PlentyOfGold. If you have a nice figure (in terms
of mine data about a potential deposit), post it on their website and
Abitibi Royalties Inc. might do a little smelting with you.
It's part of the desperate and creative alternative financing mea-
sures happening now in the Canadian mine sector: cash-strapped
junior and intermediate mining companies – unable to access capi-
tal through the usual suspects of issuing equity or borrowing from
lenders – are trying new ways to hook up with financing for projects,
or to just keep their companies alive.
Last June, Abitibi Royalties president and CEO Ian Ball launched
Royalty Search, through which junior mining companies are invited
to send data on existing mineral assets or possible new claims to
Abitibi, one of the smaller, newer players in the metals royalty game.
If Abitibi likes what it sees, it will spring for the mine company's
claims fees and taxes long enough to keep the company going until it
finds a partner to help get a project to production.
In return, Abitibi takes a small percentage on the company's net
smelter returns for the life of the project. In its first month, Royalty
Search netted three deals. On July 8 Abitibi announced the third:
Money's tighter but finance
options have widened for an industry
in need of creativity
by Anthony Davis
PHOTO:
SHUTTERSTOCK
FINANCE
