Securing funding for mining projects can be a difficult task as there can be many issues and red tape. Large-scale mining projects can involve challenges due to political risk and instability depending on the location of the project. They can also be environmentally and socially sensitive, subject by its nature to increasingly stringent planning laws and implementation requirements.
Financing Mining Projects
Considerations for funding mining projects include; the amount of debt on account, poor infrastructure and safety factors. These factors serve to limit the interest of international commercial banks, thus project directors looking elsewhere for the main source of mining funding. Issues of concern to potential lenders can include:
- completion risk
- security arrangements
- foreign exchange availability
- project validity
Some global coal mine businesses are closing operations as countries are becoming more engaged in using greener, natural resources to power the planet. As the world’s population increases, there’s more demand for the extraction of precious rare earth metals and minerals. Their value increases as they are manufactured for use of everyday items such as in mobile phone and computer technology and other green tech inventions. In saying that, lenders are still happy to fund viable mining projects which need significant investment over long period of time.
Many measures are put in place to lessen funder risk. They can put payments in escrow accounts, utilize hedging programs, project backing with debt instruments and political risk insurance. With your project proposal, you may be asked to submit an assay report such as a National Instrument 43-101. Each case is looked at individually as every mining project have different needs. If you require bank instruments, we are happy to assist.
Funders recognize the potentials and pit falls as well as challenges which may occur when assessing the projects needs. Areas of mining:
- Base Metals
- Precious Metals
- Rare Earth Metals
- Mineral Extraction
Going Green?
Main stream focus nowadays is leaning towards a renewable energy and circular economies to reduce wastes and emissions. Is your business designed to address these issues? it would be helpful to let funders know how your company can address these current challenges.
Please note: Assay Report/Feasibility submissions are required along with your project submission. Are you environmentally responsible? What does your company do to limit environmental destruction?