• 2 hours How Big A Threat Is Climate Change To The Global Economy?
  • 1 day $120,000 Banana Gets Eaten At Art Basel
  • 2 days The Fastest Growing Energy Sectors Of 2019
  • 3 days How To Spy On Yourself: The Doorbell To End Civil Liberties
  • 4 days Analyst Predicts Tesla Stock Will Soar To $500
  • 5 days Australian Billionaire To Invest In $88 Million Struggling Solar Project
  • 6 days Twitter-Shaming: The Biggest Threat To Any Business
  • 6 days Canada Looks To Become A Major Source For Critical Minerals
  • 6 days Hedge Funds Are Piling Into This Key Commodity
  • 8 days Trade Deal Not Likely Before Christmas 2020
  • 8 days America's $16 Trillion Debt Bubble Is About To Burst
  • 9 days Black Friday Breaks Online Shopping Records
  • 9 days Tesla's Biggest Competitor Is Hiding In Plain Sight
  • 10 days Are Celebrities Good Or Bad For Cannabis Stocks?
  • 11 days Venezuela’s Crisis Continues As Maduro Spends $5 Billion On Oil Deals
  • 12 days Elon Musk Claims 250,000 Orders For Cybertruck
  • 13 days How To Survive Thanksgiving Politics With Cannabis Gravy
  • 14 days The Fragility Of Monetary Policy
  • 15 days 5 Oligopoly Stock Picks For Your 2020 Portfolio
  • 15 days $7 Trillion In Unfunded U.S. Pensions As Domestic Debt Hits A Record High
Rio Tinto Vies To Become Top U.S. Lithium Producer

Rio Tinto Vies To Become Top U.S. Lithium Producer

Rio Tinto, the world’s No.…

The Mining Industry Still Has a Human Rights Problem

The Mining Industry Still Has a Human Rights Problem

Nine years after the implementation…

The U.S. Doubles Down On Domestic Lithium Production

The U.S. Doubles Down On Domestic Lithium Production

Battery metals are quickly becoming…

Mining.com

Mining.com

Mining.com

MINING.com is a web-based global mining publication focusing on news and commentary about mining and mineral exploration. The site is a one-stop-shop for mining industry…

Contact Author

  1. Home
  2. Commodities
  3. Other

Mining Deals Are Dwindling

Mine

The strength of equity markets is a barometer of investor confidence. The amount of capital raised through equity placement directly reflects the sentiment in the mining industry. Although 2018 is not over yet, it is a good time to take a sneak peek at the current trends in mining equity capital raisings.

The following is a snapshot of the capital raised by mining and exploration companies in Q2 2018 compared to previous quarters. The data from Mining Intelligence represents companies listed on the following stock exchanges: TSX (+TSX-V), ASX, LSE (+LSE-AIM), NYSE and JSE. Only completed placement offerings were considered. Companies representing extractive and oil sands industries have been excluded from this report.

(Click to enlarge)

The graph shows that the value of mining capital raised at major exchanges nosedived for the third consecutive quarter. In the first half of 2018, capital raised through equity placements was 18 percent lower than that in the corresponding period of 2017. In Q2 2018, the mining capital raisings value was at its lowest level in two years. The volume of transactions also decreased.

Uncertainty caused by escalating global trade tensions is a key factor adversely impacting both the amount of capital raised by mining and mineral exploration companies as well as the number of placement offerings completed. Related: Zuckerberg Outlines Facebook's Plan To Combat 'Fake News'

While most mineral commodities markets are in a decline and struggling, one particular sector is still thriving. With the continuing buzz around green energy, electric vehicles and battery technology, the capital raised in Q2 2018 through equity placements by companies focused on lithium, cobalt and other new world critical minerals hit a record level and exceeded US$800 million. This accounted for more than 40 percent of total mining capital raised during this period at major exchanges.

This impressive growth in the battery metals sector was mainly because of two major equity offerings completed in the second quarter of 2018.

The first is unique and unprecedented for the lithium market. Nemaska Lithium’s overall C$1.1 billion (US$849 million) financing package was completed in Q2 2018. Approximately US$356 million was raised through public and private placement offerings. This comprehensive project financing package will fund the construction, commissioning, working capital and reserve funds for the Whabouchi lithium mine and the Shawinigan electrochemical plant in Canada.

The second major completed equity offering was Cobalt 27 Capital’s bought deal that raised aggregated gross proceeds of approximately C$300 million (~US$225 million). The net proceeds will be used to fund Cobalt 27 Capital’s acquisition of a US$300 million cobalt stream from Vale’s Voisey’s Bay Mine, including from the proposed Voisey's Bay Mine expansion, commencing January 1, 2021.

As more and more players in the mining and metals industry consider investing in the future supply of mineral commodities used in battery technology, it is likely that companies developing lithium and cobalt assets will remain the preferred targets for investors and outperform their struggling peers from other mining markets in the future.

By Mining.com

More Top Reads From Safehaven.com:

Back to homepage

Leave a comment

Leave a comment