Mining industry analysts, investors and private equity groups from across the world converged on Toronto September 26 to 28 for the first Mines and Money conference to be held in North America.
Junior and mid-tier mining companies looking for financing were in the minority, but “for those that were there, it was a good opportunity to get exposure,” said Joshua Bailey, vice-president of exploration with Wallbridge Mining.
“We had two days set up with meetings. There were quite a few finance groups, fund managers and private equity groups that don’t have a base in Toronto and we targeted those groups for meetings, but we also touched base with Toronto groups we were already familiar with.”
Sudbury-based Wallbridge has the funding it needs for the Parkin Offset project on the north rim of the Sudbury Basin and the recently acquired Fenelon project in Quebec, but is planting seeds for future requirements.
“We were at the conference for a couple of reasons,” said Bailey. “One is to get a feel for where the industry is at and get some exposure for Wallbridge, but we are also looking at a number of other acquisition opportunities, so we’re trying to line up financing for them.
“Anytime there’s an opportunity to share our story with potential financiers is good, and if we can get them to come to Canada instead of us having to go to them, that’s even better. You can also pick up the phone and we do that as well, but face-to-face makes a big difference.”
The general mood at the conference was one of cautious optimism, said Bailey.
“Right now, about 40 to 50 per cent of investment in Ontario is in the gold space. Gold has had a good run since January and a lot of companies have been able to top up their treasuries at a reasonable valuation, so there’s some activity that’s happening. I think the expectation is that gold will bump along this year and next and get better thereafter. That’s the running thesis.
“Companies are beginning to look at development stage projects and there have been some pretty high-profile mergers and acquisitions in the past year, but not a lot of interest yet in earlier stage exploration projects.”
The outlook for base metals is much less optimistic, as depressed commodity prices force operators to focus on cost containment and efficiencies.
Baily predicts a brighter future for exploration due to the current dearth of high-quality projects.
“Wallbridge is looking at a ton of development stage projects for gold, nickel, copper and PGMs, but most of the existing projects are not very good quality, and there’s a reason they haven’t been developed yet,” said Bailey.
“If the market continues to improve and as more companies start looking toward growth, there aren’t going to be many projects to choose from and they’re going to have to reach further upstream into exploration type opportunities and deliver projects organically. That’s when we’ll see bigger companies and mid-tier companies starting to put capital into early stage exploration. That’s when the juniors will really take off.”
Wallbridge began a $3.9 million drilling program on the Parkin Offset project in October funded by its joint venture partner, Lonmin.
“We did 11,000 metres of drilling there last year and expanded our mineralization pretty significantly, so we’re looking forward to this bigger program,” said Bailey.
The Fenelon project on the Quebec side of the Detour Lake trend was picked up from Balmoral Resources, has a resource of 38,000 ounces in the measured and indicated category just shy of 13 grams per tonne and has underground workings as a result of a bulk sample that was done in 2004.
“It’s a very high-grade deposit, so we see it as a good opportunity. We can mine it with contract miners and truck the ore to a custom milling facility,” said Bailey. “We’re working on a $4.5 million prospectus, but we have already closed an initial $1.7 million and that will bring us to the point where we can have a contractor come in.”
A prefeasibility study on Fenelon is underway and a production decision is expected by Q2 2017.
Wallbridge completed a successful two-year mining program at its Broken Hammer project in October that made some money despite some “pretty horrible metal prices,” but more importantly, “it gave us a track record as a credible operator, and it has really changed the nature of the conversations we’re able to have with bigger companies about acquiring non-core assets,” said Bailey.
“That was another reason for going to Mines and Money – to meet with mid-tier companies about assets that might not be worthwhile for them, but could be very material to us.”
Several other junior miners with properties in Northern Ontario attended Mines and Money, including Avalon Advanced Materials, Red Pine Exploration, Noront Resources, Harte Gold, Richmont Mines and Transition Metals.
The Ontario Ministry of Northern Development and Mines was the marquee sponsor and there were several presentations promoting the province’s mineral exploration and development opportunities.
“The organizers wanted to hold a gathering in North America and we made the pitch that Toronto being the mining finance capital of the world would be a great place to host it,” said Michael Gravelle, Ontario Minister of Northern Development and Mines. “We got them committed for two years.
“Holding Mines and Money in Toronto is a big deal. I think people understand what a valuable opportunity this was to get together with people who are keen on investing,” said Gravelle. “There are signs that the industry is coming back and that’s great because exploration activity is crucial to the long-term development of new mines.”
