Mining Capital by Michael Seeger

Author:Michael Seeger
Language: eng
Format: epub
ISBN: 9783030312251
Publisher: Springer International Publishing

Many failed listings in mining

Many junior mining companies listed on stock exchanges during the commodity boom phase. It was a period of easy access to mining capital. Many mining business cases and investment propositions were highly speculative and flawed, and developers failed to deliver on expectations, leaving investors disappointed. In many instances, the investors in such listed mining stocks lost significant amount of investment. This, in turn, has put off many funds into investing in listed junior mining stocks.

Not all mining companies and projects are suitable for listing

Some mining companies and projects and companies are not suitable for a listing. Listing relies on public perceptions for purposes of valuating a company and share price appreciation. An example is mining companies in the coal sector, a sector with a negative public perception of contributing to global warming. No matter how well a coal company will perform in terms of deliverables, the share price will not move significantly if public perception is against it, with no fault of the mine developer.

Equally, a company with a strong entrepreneurial flair should consider whether listing is the ideal way to raise capital. Managing a listed company requires strict corporate governance, frequent structured reporting to the market, a representative corporate image, amongst the many obligations. These obligations can stifle the entrepreneurial spirit of junior mine developers.

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