A junior resource company’s place in the mining food chain is to acquire projects and make discoveries.

There’s going to be a very real and increasing trend for Mergers and Acquisitions (M&A) because juniors, not majors, own the world’s future mines and juniors are the ones most adept at finding these mines. They already own, and endeavor to find more of, what the world’s major miners, automakers and battery manufacturers need.

Security of supply is paramount, if they cannot get offtake agreements by investing with the world’s miners then auto and battery manufacturers will slide down the food chain and invest directly into junior resource companies.

They will do whatever it takes to secure their future, their raw material supply chains, much like Henry Ford did.

Joe Biden’s Inflation Reduction Act authorizes almost $400 billion for investments in energy projects and climate change, including the mining of critical minerals. When this is combined with Biden’s $1 trillion investment law, which includes incentives for sourcing dozens of minerals, and this February 27th announcement from the White House Presidential Waiver of Statutory Requirements it appears a mining boom is close at hand.

It used to be that junior mining companies would only be acquired by majors and mid-tiers. That’s no longer the case. As automakers and battery manufacturers become more desperate for battery/ electrification/ decarbonization metals we could be looking at a monumental shift in the way juniors are valued.

Richard (Rick) Mills

aheadoftheherd.com

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