Colombia , Mexico , Chile , Bolivia , Ecuador , Argentina , Peru and Brazil
Feature

Mexico top target for junior financing cash

Bnamericas Published: Friday, July 05, 2019
Mexico top target for junior financing cash

Mexico was Latin America's biggest target for junior financing in Q2 – with gold and lithium the key metals.

The region saw 29 new financing deals announced in the quarter worth US$128mn, according to figures collated by BNamericas. This was a sharp drop from the 37 deals and US$387mn in Q1.

The figures in 4Q18 were 22 deals worth US$143mn.

The Q2 announcements – many of which are yet to conclude – comprise 25 private placements, offerings and strategic investments, and four loan agreements.

Only deals worth at least US$750,000 by non-producing juniors are counted.

MEXICO DOMINATES

Nine of the financings are aimed at Mexican projects, worth a combined US$41.1mn. Four were for gold assets, with two each for lithium and copper projects, and one for a silver property.

The biggest Mexico-focused deals were two separate strategic investments secured by Bacanora Lithium to advance the US$420mn Sonora lithium project.

The deals, with China's Ganfeng Lithium, comprise a 14.4mn British pounds investment in the company and a second worth 7.6mn pounds in holding company Sonora Lithium.

Sonora, which was previously held up by financing issues, promises to become Mexico's first lithium operation, with initial output forecast for 2021.

COLOMBIA, ECUADOR

Colombian assets were the target of two deals worth US$26.9mn, by far the biggest of which was a US$25mn strategic investment by Eric Sprott in Continental Gold, which is advancing the Buriticá gold project in the country.

This followed a US$100mn streaming deal and US$75mn convertible debentures secured by Continental for Buriticá in Q1.

Ecuadoran assets were the target of four financing deals worth US$21.0mn in Q2, the largest of which was a Cdn$12.1mn private placement by Adventus Zinc to fund exploration at the Curipamba copper-gold-zinc-silver-lead project.

Brazil saw four smaller deals worth a combined US$16.4mn, with three each in Peru and Argentina, and one in Bolivia and Chile.

The remaining deals did not target projects in any single country.

TOP METALS

Almost half (14) of the financings were for primary gold assets, worth US$68.9mn, with six for copper (US$21mn), three for lithium (US$29mn) and three for silver projects (worth US$4.2mn).

The remaining three deals targeted platinum, uranium and zinc assets.

OUTLOOK

The value of financings in Q2 was down sharply from the previous quarter, when the deals were swelled by the US$175mn aimed solely at Continental Gold's Buriticá asset.

But a recent improvement in gold and silver prices could help lift transactions targeting precious metals assets for the remainder of 2019.

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