IM June 2023 – Financings jump 58% after 2-month decline

Funds raised by junior and intermediate mining companies bounced 58% month over month in May to $900 million after two consecutive months of decline. The month's total, however, did not exceed the $1 billion mark. The number of transactions jumped to 295, up 46% month over month and at its highest in five months. Significant financings, valued at $2 million or more, jumped to 99 from 65, accounting for 87% of the funds raised, while two transactions valued at more than $50 million took place, compared with none in April.

Gold financings recover

Gold financings increased 20% to $407 million after falling to a three-month low in April. The number of gold financings jumped to 155, up 40% and at its highest in five months. The number of significant financings increased to 51 from 37.

 The largest gold financing and the second-largest financing overall was an C$83 million private placement follow-on offering, including overallotment by Toronto Stock Exchange-listed Skeena Resources Ltd. Proceeds of the offering will be used to complete exploration and engineering works at the Eskay Creek gold-silver project in British Columbia. Skeena recently completed feasibility studies at the aforementioned project and is planning to complete an updated resource estimate in June.

Base/other metals up on higher copper, nickel financings

Funds raised for the base/other metals group jumped 79% to $254 million, buoyed by increased copper and nickel financings, along with the number of financings rising to a nearly five-month high at 96. The number of significant financings jumped to 29 — the highest in 13 months.

The largest base/other metals financing and the third-largest financing overall was a A$70 million private placement by Australian Securities Exchange-listed Chalice Mining Ltd. Proceeds of the capital raising will be used for the ongoing exploration and predevelopment activities of Chalice's Julimar nickel-copper project in Western Australia.

Lithium, rare earth metals financings boost specialty commodities

Fundraising for specialty commodities nearly tripled to $239 million month over month in May, buoyed by higher lithium and rare earth metals financing. The number of financings jumped to a five-month high at 44, with significant financings nearly doubling to 19 from 10.

The largest specialty commodities fundraising and the largest overall was a A$109 million private placement by ASX-listed Vulcan Energy Resources Ltd. The company recently completed feasibility works in its namesake brine project in Germany, wherein proceeds of the fundraisings are expected to be used for the phase one lithium plant construction and the project's further development. The mine is expected to start producing in 2025, with expected average annual production of 21,700 metric tons per year of lithium hydroxide over its 30-year mine life. 

^{This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.}