Juniors lacking finance options for mining exploration

Mining exploration in Peru in what is left of this year and next will diminish due to the fact that the 150 juniors at work locally are or will be struggling to obtain the financing they need from the markets on which they trade (mainly the bourses of Toronto and Vancouver, Canada, plus The City of London). Some juniors have seen their shares fall by 50% this year, notes Miguel Cardozo, president of the Comite de Mineria at the Camara de Comercio Canada-Peru as well as being executive president of the junior Alturas Minerals. The firms have been struggling for cash since February.

Peru received almost US$550mil in mining exploration investment in 2007; Cardozo expects the total to be similar this year before dropping substantially (around 30%) in 2009.Luis Vela, executive vice-president of Andean Exploraciones, a junior trading on the Vancouver exchange, says that firms must seek out other financing formats. Andean boasts two projects, Invicta (in Lima) and Sinchao (in Cajamarca). Between them, they will require investment of US$80mil in 2009 if reserves are to continue to be confirmed. Meanwhile, the director of finance at Compania Minera Buenaventura, Carlos Galvez points out that a slowing-up of investment will return to haunt firms further down the road when quality and volumes take a tumble.

Publication: SABI - Business News
Provider: South American Business Information
Date: November 2, 2008

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