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6 Sources to find investment for mining projects

6 Sources to find investment for mining projects

The resources market is rebounding; although still short of its peak; but certainly on the way back. Now it’s the good time to start planning to commence new exploration or operations; but where are good sources to find mining investments?

The banks; which traditionally have been a major source to provide infrastructure funding has been very restrictive last 24 months; and this has caused major problems for many mining companies.

Therefore; alternative sources must be explored in order for the company to secure the needed investment capital. In summary; there are 5 strategies that are useful to raise capital for mining companies:

Please look at our Global Mining Capital Providers Guide from http://researchwhitepaper.com

1. Placements to your own shareholders: This is the quickest way to raise capital; however; lack of trading liquidity is often a problem. There is a new strategy which involves in private placements with groups of international investors; particularly from China; these investors form small groups not institutions but are known to have capacity to invest $20m or more into private placements for mining projects.
 
2. Strategic Mining Companies: For instance; Australian and Canadian mining companies are very active in projects in US and Latin America now because of the relatively weak USD; and also relatively advanced projects in US and South America; you should consider approach potential miners from Australia and Canada; especially for oil & gas; also gold projects. There has not been a significant gold discovery in Australia for many years; and many of them are now seeking abroad to expand opportunities.

3. Mining Exhibitions: Mining exhibitions is very useful function to find potential investors; these days; we have also seen good deals being concluded in mining exhibitions in Middle East and Asia; particularly China. CIFIT for instance; which is probably the world’s largest financial investment exhibition held in China each year has a specific Business Matching program allowing companies to meet with each other; even just a short 10 to 20 minutes sessions; it is still far more effective than the traditional “Exhibition Stand”.

4. Strategic Investors from Asia: The majority of deals done from Asian strategic investors are actually unreported in the Media. While we have seen big press releases on Rio Tinto; Oz Minerals or others; more than 70% of deals were done quietly and privately with mid-tier strategic investors. Most of these investors are mid-tier steel companies or individuals; often tied with real estate conglomerates; instead of institutions.

5. Plenty of money from Middle East: Although impacted by the global downturn; investors from the Middle East remain very active in the resources sectors; these are usually family investors and some sovereign wealth funds. Our recent research conducted in Europe has shown significant mining related investments were taken up by Middle Eastern investors; they see this as a way to diversify their portfolio and not solely rely on oil and gas revenue.

6. The rise of Brazil: We have talked about this many times already; but Brazil is really emerging as a global players; its fast rise makes us to think if Brazil will become a major Mining Investment destination by 2015; with similar success as in Canada and Australia? It will be interesting to see if this will happen.

For one thing we are sure; with the economy growth seen in Brazil; and the upcoming Olympics; can Brazil be self-sufficient for its iron ores and other base metals? Its companies are already investing worldwide mainly in South America and Europe to control more mines.

Again; much of the investments were unreported other than those ones announced by Vale and other major companies.

We do have a program specifically for Mining / Energy projects to promote your investment opportunities; this is a bi-lingual program (In English and Chinese); if you are interested to know more; please contact us for more details.

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