Angus Edgar, the head of corporate adviser Melbourne Capital, says in his 30 years’ involvement with the junior sector he has never seen investor appetite at such a low ebb.
“If you have got a strong story, there is terrific long-term investor interest,’’ he says.
“But if you are doing general greenfields exploration, it is very, very hard.
“No one can recollect it being as flat as it is.’’
Mr Edgar said a critical factor was the broadbased nature of the commodities downturn. “There is normally at least one cylinder firing to draw investors into the small end,’’ he said.
Mr Edgar is a director of Regal Resources, which managed to attract international backing for its copper projects in the Democratic Republic of Congo. He said what money was available for grassroots exploration and emerging development projects was coming from investment funds prepared to look beyond the squeeze on commodity prices.
But they are a demanding lot.
“The days of sitting around a table at a long lunch, then passing the hat around to raise a million dollars, is gone,’’ he said.
“The money is being led by technical analysis and involves lengthy due diligence across geological, legal and geopolitical issues. Only then will investment committees look to support exploration projects.’’
Great, but the technical analysts don't seem to have much of a grip on realities.
The market in Australia is not just scared, it's clueless about Mexico. AZS is one of only two ASX listed miners operating in Mexico, and AZS is one of only two ASX listed miners operating in Mexico. Yet it's one of the top mining destinations in the world and we've partnered with not one, but two major mining companies. Enough said.
“There is still good value in shells as long as managements aren’t arrogant and obsessed about maintaining control,’’ Mr Edgar said.
Dont fall over yourself there....Strong words Mr Edgar, sounds good. But I'd suggest that serious ability and real undertanding of the unrealised value of an asset might easily be mistaken as arrogance. Why would Tony R give up what has been achieved so far just for a cheap deal because the market is sour? Deals with two majors who have left him in charge is a vote of confidence.
He's got control and it's going to stay that way until we're producing IMO. A small CR with Drake which is the investment house that's already done the due diligence won't kill us if that's what it takes to keep control of this baby until results are in and we have lift off. IMO.
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