Canadian miners raise C$3 billion

Canada's junior mining companies are cash rich for the first time in seven years, having led the way in raising C$3 billion in 2003 to signal the revival of exploration plays along with development and acquisitions both overseas and on the domestic front.

The industry has not seen such an influx of cash since the 1997 scandal accompanying the collapse of Bre-X Minerals, followed by a prolonged period of low gold and base metal prices that ended in mid-2003.

As a result the stage is set for the liveliest exploration program in Canada since the hunt for diamonds in the Northwest Territories a decade ago, but along with that there are high expectations of a discovery.

Private placements accounted for about C$1 billion of the money raised on the Toronto Stock Exchange and the Canadian Venture Exchange in the final three months of 2003 and have shown no signs of abating this year.

Industry sources say much of the private money came from European investors.

Although those placements avoid some of the costly disclosure and legal problems, they also set the stage for shares sold as private placements to be resold in the market, adding to the number of shares outstanding.

This month alone has seen Apex Silver Mines attract C$50 million, while DiamondWorks has announced plans to raise C$29 million and Tiberon Minerals is targeting C$8 million.

Flurry of financing at year-end

The industry wound up 2003 with a flurry of financing deals - about 100 in the C$1 million to C$6 million bracket and 30 raising C$7 million to C$15 million.

Leading the pack were Nevsun Resources C$68 million, Ivanhoe Mines C$50 million, Thistle Mining C$44.7 million, Bolivar Gold C$26 million, DRC Resources C$24.1 million, International Minerals C$22.3 million, Anooraq Resources C$20 million and SEMAFO C$16.5 million, with Ivanhoe concluded a bought deal for US$115 million in December.

An undetermined amount of the money will be spent in Canada, but the bulk is destined for South America, Africa, China, Mongolia and the former republics of the Soviet Union.

China is a particular hot spot now that the Chinese government has instituted regulatory changes that remove previous deterrents from the gold sector.

Taking advantage of the reforms, Calgary-based junior TVI Pacific became the first foreign company to establish a wholly owned company in the Chinese mining sector and is expecting to spend C$10 million on exploration this year.

Placer Dome, which is negotiating for a possible joint venture, heads a line-up of Vancouver-based explorers in various stages of exploration programs. The others include Southwestern Resources, Mandorin Goldfields and Minco Mining and Metals.