TORONTO Some junior
mining companies have had to enter "survival mode" due to a
lack of interest from potential financiers, First Nickel Inc.
(FNI) president and chief executive officer Thomas Boehlert
The investment sector has cooled
noticeably on mining in recent years, as evidenced by a fall in
stock prices far beyond recent drops in metal pricing, Boehlert
said during AMM sister publication Metal
Bulletins International Nickel Conference in
"Theres hardly any money
available for junior miners in the market, and that is going to
drive a lot of junior miners into survival mode: selling
assets, strictly conserving money and investing almost no money
in exploration. That is likely to create a shortage of supply
as we head into the coming years," he said.
Boehlert discussed his own
companys push for financing earlier this year, in which
FNI restructured its debt with shareholders after acknowledging
that it was "in serious financial difficulty" (
amm.com, April 1).
Boehlert said that the
Toronto-based company made the move after coming into the end
of 2013 with only Canadian $5 million in cash, well short of
its objective to "always have C$10 million cash on the balance
"We got to the end of the year
and the liquidity looked pretty tight, and in our first quarter
we were going to have an issue," he said. "The refinancing got
done because our shareholders stepped up and provided loans and
credit support. If we had tried to go out into the market and
do that kind of financing, it would not have been
Boehlert said that the dearth of
investor interest in junior mining companies is likely to
continue until metal prices improve, with many now expecting
nickel prices to climb as the supply surplus eases toward the
second half of this decade (
amm.com, April 30).
He added that many mining
companies looking at potential acquisition opportunities were
likely to concentrate their search on companies with a
"producing asset" already in place, rather than in-development
or exploration firms.
"You cant acquire assets that require more investment,
because theres just no capital out there," he said.