NEW YORK Mining firms
need to cut costs in order to increase their ability to borrow
money, James Verraster, chief executive officer of Auramet
Trading LLC, said.
"The cost of production has in
many instances risen so dramatically and the price decline has
been so rapid that no one can borrow money," he said, referring
in large part to gold miners. "Companies need to figure out how
to access financing again, and to do this they need to cut
But the financing markets are
experiencing issues of their own.
Some lenders who left the
financing space during the 2008 crisis havent yet
returned, Verraster said April 30 at the Society for Mining,
Metallurgy and Explorations mining finance conference in
At the same time, the
traditional mining banks are in most cases not lending with the
same enthusiasm as in 2005-11, he said.
"The equity markets are
currently unable to fully accommodate the capital needs of
small mining companies," Verraster said. "Non-traditional
financing has been possible for some companies, including metal
streams, royalty financing and asset-denominated