Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Accra Mining Network
Strategies for Attracting Funding for
Mining Projects
Henry Antwi
September 2015
Funding Strategies
DISCLAIMER
• This presentation has been prepared for purposes of discussion. It
contains opinions and c...
Africa – Resource Ratio
China – Share of Global GDP
China Consumption
• Credit : Thomson Reuters
Global Industrial Production
Commodity Price Index
Mining Survey
• Credit KPMG
Exploration Spend – Top 40
• 2012 --- $12 billion
• 2013 --- $6.3 billion
• 2014 --- $4.9 billion
• Serious concern on the...
Exploration Budget 1993 – 2014 (Junior Mining
Companies)
Market Capitalization
• The market capitalization for the Top 40 was
$791 billion at the end of 2014, which is
where it sa...
Productivity
Resource Nationalism
• Governments looking to maximize returns from their natural
resources and impose windfall taxes
• In...
Social License to Operate
• “You make noise, you get in the way, you cause a problem, we give
you money; we get what we wa...
Revenue by Commodity – Top 40
Return on Capital Employed – Top 40
• Return on capital employed (ROCE) fell to its lowest level to 9% in 2014,
down from ...
Industry Response
• In 2014, the Top 40 miners delivered on their commitment to reduce capital
expenditures, which led to ...
Industry Response
• Short term quick-fixes such as idling equipment, retrenching workforce, revisiting
supply agreements, ...
Funding Strategies
• Valuing your assets
• Main Valuation Drivers – Discount Rate,
Commodity Price and Capex
• Development...
Upcoming SlideShare
Loading in …5
×

Strategies of Attracting Funding for Mining Projects

23 views

Published on

Slides of power point presentations by Mr. Henry Antwi on the Strategies of Attracting Funding for Mining Projects to the Accra Mining Network on September 25, 2015 at the Barclays Club House in Accra Ghana.

This presentation has been prepared for purposes of discussion. It contains opinions and comments that are intended to assist in the understanding of technical, commercial and legal issues that arise in valuation and project funding. It is aimed solely at educational issues in relation to those objectives and should not be used or relied upon for any other purpose. The opinions expressed herein are those of the presenter and do not necessarily reflect those of any organisation or company that may be involved in mineral industry valuation, appraisal activities or project funding.

Published in: Investor Relations
  • Be the first to like this

Strategies of Attracting Funding for Mining Projects

  1. 1. Accra Mining Network Strategies for Attracting Funding for Mining Projects Henry Antwi September 2015
  2. 2. Funding Strategies DISCLAIMER • This presentation has been prepared for purposes of discussion. It contains opinions and comments that are intended to assist in the understanding of technical, commercial and legal issues that arise in valuation and project funding. It is aimed solely at educational issues in relation to those objectives and should not be used or relied upon for any other purpose. The opinions expressed herein are those of the presenter and do not necessarily reflect those of any organisation or company that may be involved in mineral industry valuation, appraisal activities or project funding.
  3. 3. Africa – Resource Ratio
  4. 4. China – Share of Global GDP
  5. 5. China Consumption • Credit : Thomson Reuters
  6. 6. Global Industrial Production
  7. 7. Commodity Price Index
  8. 8. Mining Survey • Credit KPMG
  9. 9. Exploration Spend – Top 40 • 2012 --- $12 billion • 2013 --- $6.3 billion • 2014 --- $4.9 billion • Serious concern on the increasing difficulty of junior miners to raise capital targeted for greenfield exploration activities.
  10. 10. Exploration Budget 1993 – 2014 (Junior Mining Companies)
  11. 11. Market Capitalization • The market capitalization for the Top 40 was $791 billion at the end of 2014, which is where it sat 10 years ago. • Drop of 16% from $947 billion at the end of 2013. • Second consecutive year of declines • The market capitalization of the Top 40 is only about half of its value four years ago.
  12. 12. Productivity
  13. 13. Resource Nationalism • Governments looking to maximize returns from their natural resources and impose windfall taxes • Increasing environmental obligations across the world • Legislative lags in introducing new laws means that nationalism is coming at a time when the industry is struggling. • Governments should therefore consult the industry and consider a broader view of the returns from natural resource development
  14. 14. Social License to Operate • “You make noise, you get in the way, you cause a problem, we give you money; we get what we want, you’ve got what you want, and then once that money runs out, it starts all over again.” • Some mining companies go through extensive consultation during construction but do not engage the community during the production cycle • Community investments are disconnected from human resources capacity so some projects are not successfully executed • Social license to operate expected to remain or increase. Mining Companies should find ways to address community concerns
  15. 15. Revenue by Commodity – Top 40
  16. 16. Return on Capital Employed – Top 40 • Return on capital employed (ROCE) fell to its lowest level to 9% in 2014, down from 9.5% in 2013.
  17. 17. Industry Response • In 2014, the Top 40 miners delivered on their commitment to reduce capital expenditures, which led to a slowdown in capital velocity.
  18. 18. Industry Response • Short term quick-fixes such as idling equipment, retrenching workforce, revisiting supply agreements, deferring capital expenditure, shedding non-core assets, sharing mine infrastructure, pulling out of some geographies and commodities etc. • Mine Automation Examples – Rio Tinto - Mine of the Future program – BHP Iron Ore - Integrated Remote Operations Centre – Underground automation (LKAB etc) • Advances in Surveying technology – GPS used to control movement of dozers, drill positioning etc. Laser scanning used in underground to measure stopes and voids, inaccessible to personnel
  19. 19. Funding Strategies • Valuing your assets • Main Valuation Drivers – Discount Rate, Commodity Price and Capex • Development Risks • Value Creation • Sources of Financing • Funding Attraction Triggers • Preparing your project for funding • Due Diligence Process

×