Market Commentary – June 2014
We’ve observed a moderate bounce back in equity financings in the mining sector for the month of May. Opened financings jumped 63% in dollar value and closed financings jumped 47% in dollars raised from the previous month. A note should be made that the TSX Venture exchange has again fallen below 1,000 points as investors continue to be cautious investing in the junior markets. With the cyclical nature of the resource sector and specifically the mining industry, we continue to ask how close we are to the bottom and what will the next growth cycle look like for investment opportunities.
As companies continue to keep drill bits turning and have boots on the ground throughout the summer, it is a critical time of the year for mineral exploration. Knowing which companies have been successful in raising capital over the last 6 – 12 months is a great indicator to look for when evaluating who will be advancing their projects and providing shareholder value. The standing room only photo below is from the Cambridge House Canadian Investor Conference which was held from June 1 – 2, 2014.
One of the notable financings during the month of May was Stornoway Diamond Corp. raising $132 million through a public offering and $242 million through a private placement. Both deals were priced at $0.70/share and included a half warrant at $0.90. The net proceeds will be used for the construction of the Renard Diamond project, the first diamond mine in Quebec, Canada which is scheduled to begin commercial production in 2017.
In May 2014, the Venture Radar posted 124 deals of which 53 successfully raised a combined approximate value of $286 million dollars. Approximately 71 new deals opened during May, with a combined value totaling over $239 million dollars.