There is no immediate sign of an uptick in the depressed
area of mining finance, delegates attending the Global Mining
Finance Autumn 2015 conference in London, UK, were told in late
"I hope I’m not being too gloomy – but
I’m not seeing any signs of improvement," George
Rogers, CEO of Rockface Capital, a mining debt, equity and
royalty capital specialist, said.
"For the past four years the markets have been going down.
It’s a really long and painful amount of
"I’ve spoken to Korean mining entrepreneurs who
wish they’d never heard of the mining sector," he
Rogers rejected the idea of the so-called "commodities
supercycle", stating that it is neither part of a cycle nor is
it "super". "I struggle with the concept of a cycle. Cycles are
vaguely predictable," he said.
Exploration funding is the toughest to attain, he said,
adding that the door remains ajar for more developed projects.
"There’s absolutely no money out there for people
that want to explore. It’s probably when
you’re at feasibility study (FS) stage [that
funding becomes more available], but even then, only for
exceptional projects in stable countries."
Rogers identified pension fund credit as a potential wrong
avenue for both creditor and receiver. "Pension fund credit can
be two-three times the price of regular bank credit. I see a
lot of people making mistakes here," he said, adding that a
number of funds engaging in credit lending were not experienced
in the practice.
He also rejected the notion of explorers taking on any
debt-based finance, which is typically based on positive FS
projections. "Who doesn’t believe their FS will
show it to be a wonderful and beautiful project? Nobody factors
in that a lot of these projects aren’t."
"Most companies are continuing on existing shareholders.
It’s important to get decent shareholders in the
good times – they’ll help you out in the
bad times," Rogers explained.
Rogers considered two forms of unconventional capital
raising. "Sovereign wealth money is occasionally seen, but
it’s hard for mining companies to get access to
it," he said.
When questioned on the potential of crowdsourcing in mining,
he was uneasy about the potential moral maze presented by
less-well informed investors.
"I think we’re in a sector that is technically
very difficult for the layperson to understand. Maybe for the
person receiving the money it’s a great source,
but from the moral aspect the industry needs expertise," Rogers