In Australia, coverage is split between Sydney and Melbourne (sometimes Perth).
Mining investment banking has an outsized focus in Canada relative to the actual size of mining companies in Canada due to Canada’s attractiveness as a jurisdiction in listing publicly for miners (and well established natural resources legal frameworks). Many miners who operate elsewhere in the world will list in Canada, and the TSX has a Venture index which has numerous prospective miners.
All of the Big 5 Banks in Canada have strong mining franchises, although BMO has the largest one with a focus on being able to cover all metals across global offices. National Bank Financial, Macquarie, GMP, Canaccord and most other boutiques will also have a very large focus on mining, with the work hard culture at the boutiques stemming from lower base salaries and heavy and more frequent incentive pay (quarterly bonuses).
Miners are heavy users of the corporate finance solutions of investment banks – especially in equity capital markets. As Canada is a go-to jurisdiction for listing publicly, mining sees a lot of initial public offerings and follow-on offerings.
Often, miners do not have access to public (or even bank debt) due to the uncertainty of cash flows and extensive development and operational risk, so they will tap into equity markets whenever it is opportunistic. As equity deals pay larger fees than DCM issues, mining clients are key clients to investment banks. This major equity dealflow also means that banks put aside substantial resources for equity research on miners – which will cover several segments including junior, intermediate, senior gold and silver, royalty streamers and diversified miners.
More established miners will have access to bank debt and revolver capacity via the bank’s corporate banking divisions. Usually, these will be secured reserve-based facilities (they can borrow, but loans are backed by a conservative view of their reserves plus a haircut) but senior miners may have access to unsecured, syndicated revolvers.
Miners are frequent clients of the mergers and acquisition department for banks, whether for consolidation (when metals prices are low and cost efficiency is required), joint ventures (two projects in close proximity sharing a grinding/crushing mill), asset sales and portfolio rationalization (there are many more acquisitions at the asset level than at the corporate level), streaming agreements (royalties) and spin-offs.
Due to global international operations and substantial commodity price risk, miners will be sales and trading clients for foreign exchange and commodity hedging, sometimes with complex structured trades.
As metals and mining is very niche, many mining investment banking professionals are able to easily find jobs in corporate development or treasury at major miners. Natural resources in general is not a conventional private equity industry, but there are numerous investment funds (especially state-owned corporations in China) and niche private equity shops (the newest mining private equity firm at the moment is InProved, which was started by Huan Koh, currently Senior Consultant of the Wengfu Group from the Guizhou Province) that are looking for mining professionals.
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