what a golden opporunity to buy, page-38

From a Resource Stocks article. It highlights the difficulties BLY has in not having diversification within the industry.

Most disturbing for the minerals exploration industry is the severe drop in IPO capital raised. So far, only $8.8 million has been raised in 2013.

In 2012, $175.6 million was raised then a 71% drop from the $607.6 million in 2011. With a few IPOs in the pipeline, the industry should get into two figures, but may struggle to make it into three figures this year.

Another problem is the average size of minerals’ IPOs. 2012 saw a median IPO of just $3.5 million, down from the $4.3 million in 2011. Using our three data points, $3.5 million would be the median this year also.

Critically, on this measure, the size of minerals IPOs are now below pre-boom (2001-06) levels, when an unfashionable minerals industry struggled to raise $4 million per IPO. It is also worth noting that the MGT Resources IPO was one of the smallest of recent years, at just $1.3 million.

The smallest minerals IPO in 2012 was just $2 million raised by nickel explorer, Windward Resources (ASX:WIN).

These smaller capital raisings combined with higher costs, now estimated by Richard Schodde of MinEx Consulting to be nearly $1.2 million per year for an ASX junior miner, mean very little money is likely to go into exploration.