What to look for when investing in junior mining companies

Conferences, Seminars, Forums, Insight, Mining — By on December 16, 2016 at 10:39 PM
Tanya Matveeva.

Tanya Matveeva.

What to look for when investing in junior mining companies

By James Brewer

Investors are spoilt for choice as they search the stock markets – even in tough times, there are opportunities to buy shares in for instance hundreds of emerging companies specialising in mining exploration and production.

An audience at a City event was therefore keen to hear advice offered by an expert, Tanya Matveeva of UK-based consultancy Behre Dolbear, when she gave a short address on What to look for when Investing in junior mining companies.

Ms Matveeva, senior geologist at her organisation and responsible for its weekly newsletter, said that although it might be a good time to invest, there was risk – high risk.

She advised: “When you consider which horse to bet on in this race, pick the best management team.”

Advantages such as companies having a “joint venture with reliable partner, location, permitting: yes all these things are important, but I would say a strong management team will take care of that.”

Tanya Matveeva with Glen Parsons of Mariana Resources (left) and Kurt Budgeof Beowulf Mining.

Tanya Matveeva with Glen Parsons of Mariana Resources (left) and Kurt Budge
of Beowulf Mining.

She was speaking at an investor evening jointly organised by UK Investor Forums, Mining Maven and London- and Johannesburg-based financial public relations and investor relations agency Blytheweigh.

Ms Matveeva said that Behre Dolbear was one of the oldest consultancies in the mineral industry advisory sphere, having been founded in 1911. The company carries out impartial technical and strategic studies for mining companies, financial institutions, governments and international agencies.

It works in areas such as project development, financing, engineering, mergers, acquisitions and privatisations. It says it has completed more than 10,000 assignments in 200 countries.

Ms Matveeva has considerable experience ranging from regional evaluations to advanced stage projects, particularly for precious and base metals. She spent the first five years of her career with BHP Exploration, based in Moscow, working on projects in Russia, Kazakhstan and Australia. She then moved to Canada, advising on exploration for diamonds and gold in Nunavut, base metals in British Columbia and uranium, coal and shale gas in Alberta. Following that, she moved to the Netherlands, and started working in Africa, evaluating opportunities for rutile in Cameroon, tin in Rwanda, bauxite in Guinea and iron ore in Tasmania. She a member of the Association of Professional Engineers and Geoscientists.

Behre Dolbear, which has 200 employees and associates, says on its website: “What makes us special … is not just our knowledge, it’s our completely unbiased, impartial and precise advice – which means the only agenda we ever have is yours.”

It carries out project assessments for capital raising, including prospectus and bond issues, and independent valuations for corporate mergers and takeovers.

Since 1999, Behre Dolbear has compiled annual political risk assessments. “Over time, our assessment indicates a positive correlation between the growth of a nation’s wealth and the prosperity of its mining industry. Only when a country recognises the critical need to adapt, restructure and simplify its mining policies, will it truly optimise this economic potential.”

Recent posts in the Behre Dolbear newsletter included reports of a take-over bid in South African mining, the impact of Donald Trump on minerals and mining, a big increase in iron ore imports into China and ore prices at Tianjin, movements in pricing of seaborne coking coal, and bullish global forecasts for oil, copper, zinc, and wheat in 2017.

Behre Dolbear sponsored Emerging Trends in Minerals Engineering, in London, in mid-December 2016, and will be gold sponsor at 121 Mining Investment, Cape Town, February 6-7 2017 and at 121 Mining Investment, London, May 10-11 2017.

Ms Matveeva spoke at the investor meeting ahead of company presentations by Beowulf Mining and Mariana Resources, although of course she made no public comment on those businesses.

Beowulf Mining, listed on AIM and in Stockholm, is in the midst of an application for an exploitation concession for its magnetite iron ore asset at Kallak North in northern Sweden.  A rail line 40km away from its site is connected at Gällivare with the ‘Ore Railway Line’ used by Luossavaara-Kiirunavaara to deliver iron ore material to the Atlantic port of Narvik, Norway, or to the Bothnian Sea at Luleå, Sweden.

Represented by chief executive Kurt Budge, Beowulf, Beowulf Mining has been awarded exploration licences for Åtvidaberg 1 and Sala 10, in southern Sweden which are said to be highly prospective for polymetallic and lead-zinc-silver mineralisation. Exploration work has begun at Åtvidaberg and, at Sala, an exploration programme is being developed for 2017. In Finland, Beowulf has a portfolio of five early-stage graphite exploration projects.

Mariana Resources, led by chief executive Glen Parsons, has a diversified and highly prospective portfolio of gold, silver and copper projects in Turkey and South America. It is listed on AIM and the Toronto TSXV exchange. It has what is described as an exceptionally high grade gold-copper asset named Hot Maden in Turkey. It recently bought a company with high-grade gold projects in Côte d’Ivoire and set out a work programme for 2017 on those fields.

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