PROFILE
of what a company is doing and how its assets are performing .”
CAUTIOUS OPTIMISM There ’ s a perception the industry that there has been in quite a downturn over the last few years , but Meyer is optimistic . “ We ’ ve worked very hard with a range of companies to ensure they survived and had resources to advance their work through some dark periods when investors were not keen to get involved and other sectors were getting their attention . The markets have some cyclicality in their nature and most mining companies go through a rough patch before they head on the path to success . Two years ago , everybody was into biotech and technology . Mining almost became old economy again .
“ However , we ’ re in the early stages of a boom in battery-related commodities : lithium , cobalt , graphite … We ’ ve also had a strong resurgence in iron ore pricing and coal which is leading to huge profits for the bigger mining companies and giving rise to optimism for the smaller ones . We ’ ve been supporting companies looking to produce copper , because you can ’ t really do much with a battery without a copper cable and it ’ s vital for electric vehicles . There is less interest in gold , but that is also coming back . Even rare earth metals ( such as neodymium used to make computer hard drives ) are showing a resurgence .”
More and more companies are turning to joint ventures to secure funding and there ’ s a growing trend towards streaming agreements between companies , something Meyer is cautious about .
“ Streaming becomes problematic if companies run into financial difficulties or want to restructure operations . Straight equity offers more flexibility and is preferable from a shareholder perspective . Royalty streams are fair enough because the royalty effectively shares in the success of the company . Streaming is similar but I recommend companies avoid it unless it ’ s the last thing they need to get a project fully financed and only when there ’ s a good contingency in place to cover any problems .
“ Joint ventures companies need to be careful of the partners they choose to share the cost of operation and
10 August 2017