Streaming Transactions In The Mining Sector: A Financing Linchpin

As the challenging environment for mining sector financing continues, streaming transactions are playing a prominent role in bridging the "financing gap". Traditional equity, debt and project finance markets have not been available to mining companies to the extent they have been in the past. Mining companies have had to become more creative in financing the development of their projects and their M&A transactions—and they have increasingly turned to streaming transactions as a catalyst to help secure an overall financing package.

Background

A streaming transaction is an agreement whereby a financing party agrees to purchase future deliveries of minerals from an identified property in exchange for a significant up-front advance payment, referred to as a "deposit", which is applied against future deliveries, typically together with additional ongoing fixed payments (which are a portion of the market price) as the minerals are delivered. The transaction is