Mining Focused Corporate Advisory

​Independence. Experience. Integrity. Client Driven. Performance.

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The Mining Landscape and a Mining Company's Daily Corporate Mission

Mining is a finite business while mines are taking longer and longer (10+ years) to approve, finance, construct and reach commercial production.  In addition to managing its own mining operations and projects, as a going concern, mining companies need to:

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• Constantly be on the hunt for opportunities (eg. other companies, mines and projects based on fit, deal structure, financial resources, degree of accretion)

• Regularly update and maintain the latest data on dozens to hundreds of prospective assets and opportunities based on publicly available data or by way of CAs

• Monitor the top focused opportunities in determining when to act (trading activity, feasibility updates, valuation updates, recent quarterly results)

• Have access to ongoing advisory, accounting, legal and technical expertise in order to evaluate and perform due diligence

 

Without the above, a mining entity’s mine lives and cash flow will cease.  Mines, projects and corporations MUST constantly be reviewed to acquire those on the most accretive basis and at opportune times.

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Internal Corporate Development Capacities Are At Times Strained

CEOs, COOs and CFOs are occupied managing the day to day operations while focusing on: 

• Development and permitting

• Capital and operating budgets

• Financial stability and cash management

• Quarterly and annual reporting

• Equity raising, debt raising, flow through financing, project financing

• Marketing as a public company to potentially new shareholders (institutional funds, retail accounts)

• Growth to return to shareholders either organically or by way of M&A

• Reporting to board members on performance objectives, strategy

• Compliance and other regulatory obligations

 

To assess opportunities as they arise, internal Corporate Development groups have a finite capacity to:

• Evaluate all the quantitative and qualitative merits of a potential transaction

• Construct and run complex financial models for various valuation sensitivities

• Perform financial and sensitivity analysis, calculate all the relevant ratios, comparables tables, accretion analysis using merged financial models

• Compile and assemble target companies and/or companies of interest

• Liaise and work with Equity Research Analysts in keeping valuations and assumptions current

• Maintain databases on various projects/mines and corporations as relevant targets

• Manage confidentiality agreements, site visits and other information

 

Mining Companies Think and Act As...

Each mining corporation or entity believes it has the full complement of people, expertise and experience necessary to continually review all relevant and beneficial corporate opportunities.  However, when an opportunity arises, management teams of mining companies need to assemble financial, legal, transactional and technical resources in order to analyze, evaluate and arrive at a conclusion in demonstrating to the board their basis of acting (or not acting).  Many times, these resources are not always at the ready or available; as such,

• Individuals are pulled from other departments lacking certain expertise

• Banking relationships are leaned on to provide outside opinion(s) that may not be in the best interests of the mining client

• Members of the corporate development team may not be familiar or have access to Bloomberg/Capital IQ for quick access to vast amounts of information necessary for decision making

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When Internal Resources Become Scarce Engaging an Independent Advisor Is A Solution

A mining corporation’s alternatives to accomplish this are:

• Dependence on investment banks to service idea generation, opine or advance the execution of a potential transaction

• Hire additional full time employee(s) to evaluate the prime project-specific opportunities identified 

• Include other employees from other departments to fulfill urgent duties

• Hire or outsource to an investment bank that may involve an expensive monthly fee, minimum amount of months, plus a success fee, or….

 

Engage an independent:

• For a specific period of time or specific mandate

• Presence may or may not be known (ie. required in the head office)

• Negotiated fee structure up front (success fee, billable hours, cash/cash and shares)

• At the bank-owned and larger mid-tier financial advisory firms, mining corporations are in competition with each other for independent advice, as such, may not be receiving the most appropriate advice or the full picture