It’s no secret that mining is a capital-intensive business, especially for early stage companies.
Speaking to the Investing News Network, experienced mining finance executive Daniella Dimitrov said that after a difficult funding environment in 2022, this year is already shaping up to be more positive for juniors.
“(There’s) definitely much better sentiment coming into the first quarter of 2023,” she said, noting that a slew of explorers and developers have closed deals in recent weeks, including Silver Mountain Resources (TSXV:AGMR,OTCQB:AGMRF), Canada Nickel Company (TSXV:CNC,OTCQX:CNIKF) and enCore Energy (TSXV:EU,NYSEAMERICAN:EU).
Dimitrov sees precious and critical metals companies getting the most attention, noting that she includes commodities like uranium under the critical metals umbrella. She also said earlier-stage companies are receiving more attention from investors.
“What we’ve seen at the beginning of 2023 is capital starting to be allocated back into those opportunities that may be higher risk, but may offer a higher growth profile than, for example, some of the majors,” she said.
That money is coming from both traditional and non-traditional sources. In terms of the latter, Dimitrov said that entities like governments and automakers are dipping their toes into the mining industry much more frequently than they would have even five years ago. However, this class of investor is not quite ready to jump into the junior sector.
“There is capital being allocated by automakers, even by governments, to getting some companies (across the line) that have assets that are really at the development stage and are trying to put financing packages together. But we’re not seeing capital necessarily being allocated at the more risky part of the lifecycle, and that is at the exploration stage,” she said.
This is something Dimitrov would like to see change in the future. “Pools of capital that will take more risk in that value creation and that have a longer time horizon — the attraction of that type of capital is really important in our space,” she said.
Watch the interview above for more from Dimitrov on the state of financing in the resource space.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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