Headline financings crowd terrible money picture for juniors
Despite some eye-catching financings in the last month, the juniors have been unable to raise money, said Kai Hoffmann, CEO of Oreninc, in a conversation with Kitco today.
Oreninc tracks junior financings on the Toronto Stock Exchange. Despite markets being roiled by COVID-19, late-stage companies are still managing to raise money, juniors not so much.
"The juniors are having a really hard time financing right now," said Hoffmannm, noting that financings below the $10 million mark have "...just completely disappeared in March and April."
Hoffmann said there have been some significant raises in the space, SilverCrest Metals with over C$101 million and Bluestone Resources with C$80 million, but these are advanced-stage mining and development companies.
Any junior financing is going to have to wait, and with COVID-19 restrictions still in place and lack of funds, juniors may be unable to generate any news.
"There's typically a trickle-down effect, and one thing we'll have to see: because of this COVID-19 a lot of companies might not be able to explore this season," said Hoffmann. "And nobody wants to invest in a company that can do anything for 12 months. That'd be lost money. I'd rather go the development route where companies are about to go into production."
Listen to our conversation with Kai Hoffmann.