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Mining investors looking for projects with short-term returns

Keywords: Tags  mining, finance, Society for Mining Metallurgy and Exploration, SME, Dave Kanagy, Behre Dolbear Group, Tim Alch

NEW YORK — Investors in the mining community are looking for projects that will provide short-term returns, according to Dave Kanagy, executive director of the Society for Mining, Metallurgy and Exploration (SME).

"Investors are very cautious. They want to see better returns," Kanagy told AMM in advance of the SME’s Current Trends in Mining Finance Conference in New York later this month.

The market has not given the returns investors would like to see, he said, so those with cash are on the lookout for immediate projects.

Investors are willing to fund short-term projects in politically stable, mining-friendly locations, Kanagy said. "Brownfield expansions are the most attractive opportunities right now," while the appetite for greenfield sites is limited.

Companies will need to consider the mounting number of nontraditional financing options as well the traditional routes in order to determine the best way to raise capital, Kanagy said.

At the moment, capital is mostly likely to come from sources such as private equity and sovereign wealth funds, with South Korea and Japan in particular looking to make acquisitions, according to Tim Alch, vice president and senior minerals business analyst at Behre Dolbear Group Inc. Mergers and acquisitions also are likely to increase going forward, he said.

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