WWW.LEXPERT.CA
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2015/16
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LEXPERT 9
tion stage. When money runs dry, in general, the money
tends to congregate and be more readily available to
people who are closer to production, because then your
risk is reduced."
Not so long ago, TSX-V-listed exploration-focused
juniors could rely on speculative, risk-taking investors
who would pile into their penny stocks hoping to score
when a new discovery was sold to a bigger mining com-
pany that had the capital to put an asset into production.
Now, says Vancouver lawyer Alan Hutchison, Co-Chair
of Dentons Canada LLP's mining practice, it's "the pa-
tient, sophisticated investor who is going to dominate
the space."
A question surviving juniors are asking is whether
those investors will include private-equity (PE) firms
or not. Currently, low mining company valuation and
their desperation to sell assets or equity to stay alive can
mean bargains for those willing to brave depressed prices
and volatility in the commodities market. Some private-
equity funds have begun kicking the mining industry's
tires. But so far few notable deals have been made.
"I am seeing a little bit more private equity," says
Hutchison. All the significant mine financings he's done
in the past six months have been done through private
equity. "Not that there's been a lot. But there are a few
[private equity] funds that are starting to write more siz-
able cheques."
Collectively, many private-equity funds raised billions
over the last few years. "Now they actually have to deploy
that capital," explains Hutchison. "And I think there is a
sense among them the costs of assets won't get cheaper."
"ese private-equity guys are no dummies," agrees
Simon Finch, a Toronto partner with Blake, Cassels &
Graydon LLP. "is is the time to be shopping."
Several mine-focused PE funds have popped up in re-
cent years. For instance, Mick Davis, former head of the
Swiss multi-national miner Xstrata, raised US$5.6 bil-
lion in his private vehicle called X2 Resources for a fund
focused on acquiring mid-tier mining assets.
In New York, Finch's colleague Geoffrey Belsher,
a managing partner at Blakes, gets a close-up view of
the world's largest private-equity funds. "Some people
say private equity can't run away fast enough from this
[mining ] space right now," he says, adding private equity
has issues with commodity price risk and the longer life
cycles of mining investments. And they're largely avoid-
ing investments in publically held mine companies.
"We are seeing though, in this marketplace, private-
equity firms making equity investments in smaller pri-
vate companies," Belsher says. And some are making
high interest loans to miners at rates such as prime plus
10 per cent or more. Yet so far private-equity funds have
largely remained on the sidelines when it comes to min-
ing. So miners are grasping at other financial concoc-
tions to get them through hard times.
LEXPERT RANKED LAWYERS
Aycan, Nurhan
Gowling Lafleur Henderson LLP
(416) 814-5691
nurhan.aycan@gowlings.com
Mr. Aycan is a member of the firm's Corporate Finance, M&A and Private
Equity Group. He advises on M&A transactions, securities and corporate
finance matters, and private-equity and venture capital financings
for high -growth companies.
Baldwin, Christopher G.
Lawson Lundell LLP
(604) 631-9151
cbaldwin@lawsonlundell.com
Practice includes legal support for mine development/construction/
operations globally. M&A/financing. Mining contracts with foreign
governments, IBAs with First Nations, JVs, royalties, strategic alliances.
Expert witness in litigation/arbitration.
Barnes, Jeff
Borden Ladner Gervais LLP
(416) 367-6720
jbarnes@blg.com
Mr. Barnes has acted for miners, financial advisors and underwriters
in financings, operations and M&A activities for projects in Canada,
the United States, Mexico and several jurisdictions in South America,
Africa and Asia for over 30 years.
Barutciski, Milos
Bennett Jones LLP
(416) 777-6556
barutciskim@bennettjones.com
Mr. Barutciski represents Canadian and international clients in the areas
of international trade, investment and competition law & other aspects of
economic regulation & compliance. He co-chairs the firm's International
Trade and Investment Practice.
Bellemare, Marie-Claude
Borden Ladner Gervais LLP
(514) 954-3114
mbellemare@blg.com
Ms. Bellemare focuses on environmental law, natural resources, energy
and public law, both at the provincial and federal levels. She also advises
on compliance & regulatory matters with respect to environmental
protection and natural resources management.
Bergner, Keith B.
Lawson Lundell LLP
(604) 631-9119
kbergner@lawsonlundell.com
Mr. Bergner has extensive experience relating to major natural resource
projects. He advises private-sector, public-sector and government clients
on Aboriginal law and regulatory matters. His practice extends throughout
Canada including the North.
