| The proceeds from capital raisings are used for a variety of purposes.
To examine the uses, let's look at this past October where there were a record number.
Of the 239 capital raisings, more than half (51%) were raising capital for exploration purposes. This includes all aspects of exploration, but a significant amount of the funds will be used for drilling. The bulk of this drilling will be used to define a 43-101 compliant resource or to further increase an existing one. There will be drilling for brownfield projects also.
The next largest use of funds (21%) went to development. This would be to further develop existing projects and mines.
Companies also require funds for working capital which was the third group (9%).
A number of capital raisings (7%) are to be used for asset acquisition. This is for the acquisition of a single property that has an existing asset (proven resource) or even for multiple properties.
A number of capital raisings (5%) did not mention a specific purpose and therefore were included in the "Other" category
A smaller number of capital raings (4%) are to be used for debt reduction/rollover.
Capital Expenditures were the next category that funds (2%) were raised for. Capital expenditures would be used to impriove existing mines and smelters or to begin construction of new mines
The smallest number (1%) of all capital raisings that wee targeted in October will be used for Corporate acquisitions and megers.
In summary, more than half of all capital raisings in the mining sector in October, were being used for exploration purposes.
This is very good for the sector and the exploration cycle. |