2018 gets off to a strong start with an upbeat outlook for the mining sector

This optimism is also backed up by the recent BNamericas’ Mining Survey 2018, that highlighted the outlook from investors which remains optimistic. Whilst copper is expected to steal the show, the continued price increases across the sector are expected to lead to a return in price consolidation.

Another key topic of discussion was the prospects for cobalt and lithium which remain good as both look to continue their positive 2017 driven by the increasing demand for lithium-ion batteries matched with supply constraints. There is also huge interest in the peripheral markets around cobalt and lithium such as battery and cobalt recycling.

However, all the optimism was offset with some cautious discussion related to the current increase in commodity prices being fueled by global economic issues. For example, the supply chain crunch as a result of Chinese demand remains and the lack of new discoveries and mines is still a real challenge.

In addition, despite the recent decline in the value of the U.S. dollar boosting dollar-denominated prices of gold, there is increased competition for investment as many investors have been diverted into more speculative areas. This is very similar to 1999 when gold investors became dot-com gurus.

According to Jeb Handwerger, editor of GoldStockTrades.com, investors are starting to move away from the institutional gold mining stocks and looking to invest in the developers and explorers with proven management teams and world class assets. This was reiterated during Indaba where there was lots of appetite for sub $200 market cap gold projects.

What is good news for mining companies, is that there is a clearly a renewed vigor for investments, especially if these companies look further afield than their own geographical borders. There is a big thirst for interesting mining investments from London. This is particularly relevant to companies who are already on exchanges in markets such as Australia, Canada and Japan where heads have been turned by crypto and tech investments.

The opportunity to access finance via a dual listing on the London Stock Exchange (LSE) presents a very real opportunity. Likewise, those looking for a dual-listing from certain countries are also likely to move through the AIM and Main Market eligibility requirements relatively easily, due to many of the prerequisite processes and documents already being in place.

The LSE has long been a natural bedfellow for natural resource companies and indeed, we have seen an increasing number of natural resources companies considering a listing in London. A good example is Rainbow Rare Earth, who listed in London last year and in the twelve months since, has moved from exploration to production.

Regardless of where your company is based, whether your company is still in private hands or you’re considering a step-up from the AIM market, Memery Crystal can help you given our extensive experience within the natural resources sector. For more information please contact Kieran Stone.