NEW YORK Mining companies either failed to recognize or ignored the risks associated with developing projects and are now paying the penalty, Cowen Securities LLC analyst Adam Graf said.
"Miners are being punished for making acquisitions or aggressively executing project pipelines, then falling victim to a number of risks," he said, noting that the political, permitting, financing or dilution, and execution risks are the main factors facing investors and those looking to make acquisitions.
"Were in a risk-off environment nowinvestors are shunning any hint of risk," Graf said at the Society for Mining, Metallurgy and Explorations mining finance conference in New York.
Junior miners and pre-producers have the greatest capability to offer value and leverage through time, he said.
But this gives these firms exposure to the highest risks, including access to financing, Graf added.