Financing Conditions Remain Difficult In Mining Industry – MEG

20 September 2012, 8:55 a.m.
By Kitco News
http://www.kitco.com/

(Kitco News) - Financing conditions for junior mining exploration remain difficult, but those companies that have active exploration programs and enough cash on hand to fund those are continuing drilling activity, said a mining consultancy Thursday.

Metals Economics Group’s pipeline activity index declined slightly in July and August on financing woes, but these problems were offset by solid numbers of initial resource announcements and drilling activity.

“Explorers are coping by focusing on priority targets and avoiding wasteful spending, which so far has helped the overall junior sector evade large-scale slashing of exploration spending. However, at some point in the near term, financing conditions will need to improve or junior exploration spending will inevitably suffer,” the firm said in a press release.

The combined 96 financings completed in July and August is the lowest two-month total since 2009 and the $1.32 billion raised is the lowest two-month total since 2008, it said.

Summer exploration programs underpinned the number of significant drill results, with copper and silver the most active targets, while gold results are flat to date in 2012, but could be gaining momentum.

Initial resource announcements in 2012 have been small, but the announcements are outpacing what was reported in 2010 and 2011. The firm said 29 initial estimates were reported in July and August, which are the second-highest two-month total since late 2008.

By Debbie Carlson of Kitco News dcarlson@kitco.com

Cheers

W.C. Guy

We were lucky to get funding...ofcourse we have a great backer.