Alternative Financing Arrangements In The Mining Sector

The low commodity prices and weak equity markets of recent years have made it difficult for (in particular) junior and exploratory mining companies to secure financing at the levels required to meet their growth-driven financing requirements.

The resultant lack of funding from traditional capital sources, such as equity investments and debt financing, has made it necessary for mining companies to access alternative sources of funding.

Production-based financing, where companies secure funding by selling a right to future production at a mine, has become an increasingly common feature in the market, through which the funding gaps currently left by traditional capital providers are filled.