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LEXPERT 27
Abraham predicts that the majors will increasingly
turn their attention to co-operation in the name of risk
reduction, cost savings and other efficiencies in other
ways. "We're likely to see more joint ventures between
the majors, and not just on mines but also infrastructure
like port facilities," he says.
e upshot is that majors are less and less inclined to
take over early stage juniors, leaving the field for the mid-
tiers. "e mid-tiers are particularly interested where the
junior has a feasibility study or something else beyond a
preliminary study," Abraham says. "But it's also true that
mid-tiers may be making fewer acquisitions and instead
developing their own two- to five-million-ounce de-
posits, and as they do so, they'll start to put up packages
of these interests for sale."
One classic example is the take-over by Kirkland Lake
Gold, a Canadian miner, of Newmarket Gold, an Aus-
tralian producer, in November 2016. e combined
company, which produced more than 500,000 ounces
of gold in 2016, operates se ven mines and five mills, and
has a market capitalization in excess of US$2.4 billion.
"e transaction looks more like a merger than a take-
over because it involved mid-tier companies of approxi-
mately the same size," Bennett says. "Both companies
wanted economies of scale and a growth platform that
could achieve that goal, and to do that they needed more
than the one significant asset they each had."
As the majors and the mid-tiers shi strategies, then,
junior miners and their lawyers are increasingly forced to
rely on alternative and creative strategies, like joint ven-
tures, royalties, streams, working interests and mineral
banks, to stay in business. "For the juniors, it's all about
belt-tightening by choice or necessity, and about making
sure they have the right story out there so that the place
they're at from a process and development perspective
makes sense to the street," Misetich Dann says.
What the juniors are selling, however, is also changing,
as evidenced by the emergence of what amounts to al-
ternative methods of financing, including royalties,
streams, working interests and mineral banks. "We're
seeing more junior companies involved in royalty deals
than we did in the past," Misetich Dann says. "ere's
definitely a lucrative market out there for both streamers
and royalty companies."
As explained on the Franco-Nevada Corp. website,
royalties are economic interests in the future production
from a mining property. ey have distinct advantages
for the majors: because they are not subject to cash calls
to fund exploration or other costs, they are lower-risk
than operating interests; they provide exposure to the
upside of commodity price, reserve and production in-
creases; they can create an interest in new discoveries
made on a property; and they do not involve operations
or development management, thereby avoiding con-
siderable overhead.
Pocaluyko, R. Troy Wildeboer Dellelce LLP
(416) 361-5802 troy@wildlaw.ca
Partner, practising corporate and securities law, with an emphasis on
corporate finance, M&A and private-equity mandates. Mr. Pocaluyko rep-
resents a number of public and private companies in a broad spectrum of
industries, including manufacturing, construction, automotive, consumer
goods, financial services, technology, mining and real estate.
Raffin, Leo McMillan LLP
(604) 691-7450 leo.raffin@mcmillan.ca
Mr. Raffin practises securities and corporate law, acting for technology,
industrial and natural resource issuers. His experience includes public and
private offerings, mergers, acquisitions and take-over bids, proxy contests,
corporate reorganizations, business alliances, licensing transactions
and corporate governance matters.
Reid, David R. DLA Piper (Canada) LLP
(604) 643-6428 david.reid@dlapiper.com
Mr. Reid is Global Co-Chair of the firm's Mining sector. He practises in the
areas of securities law, corporate finance, M&A, mining law and related
corporate transactions. He advises clients on sophisticated Canadian
and international mining transactions of all types, including options, joint
ventures, royalties, mine financing, reclamation and mine closures.
Rodrigo, Nick Davies Ward Phillips & Vineberg LLP
(514) 841-6548 nrodrigo@dwpv.com
Mr. Rodrigo specializes in corporate litigation, focusing on class actions
in the securities, competition and consumer law fields. He has acted in
several major shareholder disputes and has a broad range of trial and
appellate experience, including at the Supreme Court of Canada. He acts
for clients across a wide range of industries, including telecommunications,
retail, mining and technology.
Rostom, Waël McMillan LLP
(416) 865-7790 wael.rostom@mcmillan.ca
Mr. Rostom is Co-chair of the firm's Restructuring and Insolvency Group.
His practice focuses on all matters relating to corporate insolvencies from
workouts, restructurings and receiverships to the purchase and sale of
distressed businesses, lending transactions and distressed investing. He
has represented different stakeholders in many domestic and cross-border
insolvencies and restructurings.
Saltzman, Jason A. Gowling WLG
(416) 862-4479 jason.saltzman@gowlingwlg.com
Mr. Saltzman's corporate finance and securities practice includes a focus
on mining among other industries. His clients include issuers and invest-
ment dealers where he advises on private and public offerings, M&A and
fund formation. He is a recognized leader in alternative finance/crowdfund-
ing and served two terms on the Ontario Securities Commission's Small
and Medium Enterprises Committee.
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