Small miners are finding it increasingly difficult to raise capital to fund new ventures despite the positive demand outlook for several commodities and a world still largely awash with cheap credit.
After that it was a game of seeing whether companies actually build and operate a mine, or whether a bigger player would come along and make a takeover offer. Small-cap miners are finding it harder to raise capital through their listings, especially if they are seeking to raise amounts similar in size to their total market capitalization.
Private equity and funds managing family wealth also tend to only want to invest once the project is more advanced. Given their expectations of high returns, these investors also tend to demand large stakes in the venture and some degree of management control or oversight. While large mining companies can afford these processes, small miners are less able to fund public relations and other community campaigns to meet these goals.
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