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While another year of volatile and declining commodity prices sees most junior mining and exploration companies still doing it tough, a 2015 survey revealed it is gold juniors who have the brightest prospects heading into the new year.

Grant Thornton’s 2015 JUMEX survey of junior mining and exploration companies showed 63 per cent of mining executives saw the greatest opportunities in the coming year in gold, followed by copper (50 per cent), zinc (36 per cent) and nickel (23 per cent).

“This will be a welcome ray of hope for a significant portion of junior miners given the extremely challenging conditions that persist in the sector,” Grant Thornton Australia National Head of Energy Holly Stiles said.

“Whilst there are companies who are achieving success – mainly in developing projects – the vast majority of junior miners are facing ongoing cash constraints, continuing falls in share prices, volatile commodity prices and disgruntled shareholders, which are all taking their toll.”

As a result of the tough ongoing market conditions, there has been a growing level of collaboration across the industry, in particular between miners and service companies, as the industry looks for ways to do things differently.

“In the current environment, making the most of every dollar spent is critical and there is a wide range of new and interesting technologies that can assist,” Ms Stiles said.

“We strongly believe innovation and technological developments are crucial for the survival and future success of the mining industry.”

The survey’s findings showed a lack of accessible funding was the most significant issue impacting juniors, along with fierce competition for capital.

Half the respondents were planning a fund raising within six months and 29 per cent had a cash balance of less than $500,000.

The survey also found due to funding constraints the search for investors was more global than ever and despite mostly low investor interest globally, there were some pockets of investors willing to fund attractive projects.

“Despite these challenges companies have continued to demonstrate their resilience and ability to overcome the circumstances to achieve some impressive results,” Association of Mining and Exploration Companies Chief Executive Officer Simon Bennison said.

“Whilst the number of new major discoveries is declining, some companies are proving the value of investing in exploration by generating some significant results and value for money.”

The survey demonstrated a growing trend for juniors to refocus on Australia for future project opportunities, with 89 per cent of respondents considering acquisitions shortlisting locally.

“Following a trend in recent years to look overseas for new opportunities, the refocus locally is positive for the Australian industry as a whole,” Ms Stiles said.

“Whilst there have been some positive policy changes, such as the repeal of the mining and carbon taxes last year and the introduction of the EDI, there is still a lot more to be done,” Mr Bennison said of the mining industry this year.

“Twenty five per cent of respondents cited regulatory constraints as a major impediment to business during FY15. The most notable being land access issues, delays or challenges in obtaining environmental approvals and delays or challenges on the granting of exploration permits or exploration licences.” 



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