It Doesn't Feel Like It But Mining Sector Is Alive - Chad Williams
(Kitco News)- While 2018 has not been a positive year for the miningsector, the rumors of its demise are greatly exaggerated, according to onefinancing executive.
 |
| Chad Williams, president of Red Cloud Klondike Strike |
Although the sector has struggled to find investmentcapital, the Canadian mining sector continues to dominate deal flow, raisingthe most money out of any other sector in Canada, Chad Williams, president ofRed Cloud Klondike Strike, said in a presentation Xplor, a Quebec annual miningconference. He also noted that so far this year the mining sector has seendeals valued at $5 billion.
“The value of the deals made in the mining space faroutstrip what we’ve seen in the marijuana market,” he said. “Even though it hasbeen a difficult year, companies are making money even in a bear market,. Thereis hope going forward”
However, Williams added that the downside for the miningsector is that most of the financing is coming from other mining companies.Generalist investors are still avoiding the marketplace. Business-to-Businesscapital in the mining sector increased 78% from the previous year.
Another issue William raised is that the deals are beingspread out among small companies that don’t have viable projects.
“What we lack in value we make up for in the sheer number ofdeals. There are something like 2,000 mining companies out there fighting forcapital. What would this sector look like if there were only 200 companiesgetting that capital, even then maybe 200 is too many,” he said.
Despite the headwinds in the sector, Williams said that heis optimistic that capital will eventually return to the market. And it couldcome from an unlikely sector: cannabis.
“We have seen the creation of a new set of investors, youngpeople who have made money in marijuana stocks,” he said. “That has created anappetite for risk that I expect the mining sector will eventually fill.”
By Neils ChristensenFor Kitco News
Follow neils_C
nchristensen@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication. |