Junior Mine 2013

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Miners are facing a confidence crisis and juniors are the ones hardest hit The market cap for the top 100 junior miners on the TSX Venture Exchange (TSXV) fell 44% to $6.49 billion in 2013 as compared to 2012. The cash position of junior miners has also steadily declined. Among the top 100 on the TSXV, cash and short-term investments fell by $695 million in 2013 to $1.2 billion compared to 2012’s balance of $1.9 billion.

Developers were the only junior mining category that increased capital expenditures (capex) in 2013 by a modest $74 million. Looking at other categories some juniors, particularly at the exploration stage, have been forced to stop work on their properties. Others will decide their only survival tactics is to merge with another player or accept a takeover offer.

The lowdown on write downs
Write downs were also a necessary drawback to the current volatile market environment. Write downs among the top 100 junior miners increased 175%, or by $55 million in 2013 compared to last year. In total, 2013 saw the top 100 companies take $87 million in write downs as of June 30, 2013.

These adjustments to mineral properties were not isolated to a few projects or companies, but instead spread out across 37 of the top 100.

Search for financing
Overall, cash generated from financing activities fell 34% in 2013 compared to last year – that’s after a 52% drop in 2012 from 2011 as investors are shying away from the high risk-reward proposition of junior miners.

Regarding equity financing, the top 100 raised $795 million in 2013 – down by half compared to $1.59 billion in 2012. Producers saw the biggest drop in equity financing with only 4 of the 15 producers in the top 100 raising more than $1 million.

Read our report to learn more about the drop in market cap, financing struggles and write downs junior miners are currently facing.

Previous editions

1.10 MB Junior Mine 2012: Must survive before you can thrive
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1.10 MB Junior Mine 2011: Volatility, the new “business as usual”
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1.10 MB Junior mine: Trends in the TSX-V2010 (October 2010)
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