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F E B R U A R Y / M A R C H 2 0 1 7
INVESTMENT
R
aising capital to finance mineral
exploration or mine construction can
mean developing partnerships with
companies that have deep pockets or techni-
cal expertise. In this article we discuss four
common types of partnerships and pro-
file four companies who have successfully
employed a partnership model.
Stream financing, also known as
resource streaming or metal purchase
agreements, is most often used to bring a
development-stage project into production
or to expand existing capacity of an oper
-
ating mine. In a typical stream financing, a
streaming company makes an upfront pay-
ment in return for the right to purchase a
percentage of future metal production at a
fixed price.
For investors, stream financing can be
an attractive source of funding as it is non-
dilutive and allows the company to retain
its borrowing capacity. A streaming trans
-
action may also be seen by the market as
an endorsement of the project's potential
by a third-party finance provider, leading
to increased investor confidence.
Joint venture partnerships are common
in the mineral exploration industry, espe
-
cially when an exploration company has a
prospective mineral property and a major
Partnerships for mineral exploration
and mine financing
Partnerships offer alternatives for raising capital when market conditions make
equity financing dilutive or when debt financing is difficult or expensive to obtain.
by Robert Simpson
