"It has been a long time since an industry has been as out of favor as precious metals mining projects currently are but that is why we believe there is now more long term potential in this industry than anything else we have seen since the oil industry in the 1980's," stated
Mining financing is subject to due diligence starting with a current NI 43-101 report and gaining confidence in the processing technology. That gives the funder a general idea of how much capital a project deserves. Other factors such as EBITDA, the amount of equity the principals have invested in the project, mine design and answering logistical questions all play a role in determining how much capital can be raised for a particular project.
The financial industry has turned a cold shoulder toward gold, silver and PGM mining for years because of weak commodity prices, better yields in other investments and a general preference for chasing gains in strong equities markets since 2009. However, runaway federal spending and political unrest are gradually setting the stage for a comeback in precious metals mining. The process has been slow but it is expected there will be an accelerated interest in this industry when currency problems and higher inflation start to strengthen precious metals prices.
Many miners are struggling with reduced operating budgets because their income has been impacted by low commodity prices at the same time traditional sources of capital have largely disappeared. The old adage that "you can only raise money if you don't need it" has never been truer than it has for miners over the past few years.
"The majority of miners don't know who to contact about getting financing for their projects and we are the answer to that problem. We have a relationship with a variety of industry partners who have a large amount of capital they need to employ. With billions to invest, and the stock market risk/reward ratio becoming harder to predict, they are slowly looking for new opportunities where to place their money," stated Housholder. "And we only get paid if the project is successfully funded. That is rare in this business and it makes us a little harder to deal with on the front end because we are taking a risk that the client will not stay the course and complete their funding or they might possibly misrepresent something that we will uncover during our due diligence which could kill the deal. However, clients definitely sleep better at night knowing we are as committed to seeing them get funded as they are. Anything short of a successful funding and we have nothing to show for it."
After a project has been conditionally accepted by
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