Raising Money to Mine Copper and Gold

THE CONFERENCE CALLER: Opening the 2024 Gold Coast Investment Showcase, a panel of experts were asked at look at the current fortunes of gold and copper.

Any market watcher would be aware of the volatility of the copper price with the metal being subject to market perceptions on the outlook for global economic growth.

The gold price is, similarly, volatile and driven as much by geopolitical events as fundamental supply and demand.

On day one of the conference Wilsons Advisory head of natural resources Craig Brown, Killi Resources CEO Kath Cutler, and Kingston Resources CEO & managing director Andrew Corbett were grilled to provided delegates with some market insights.

Craig Brown kicked off proceedings acknowledging the market had been “interesting” in the first half of 2024.

“There’s been over $5 billion of capital raised in natural resource companies, and out of that $5 billion, probably about 60 per cent of that has gone into capital raisings in gold and copper specifically,” Brown said

When asked if there had been a particular breakdown between gold and copper in terms of those capital raising, Brown explained the large producers had raised capital while being active in the merger and acquisition space.

“There’s a lot of opportunity, I guess, in the market, with the prices being 30 per cent up since the start of the year,” Brown said.

When asked if she had confidence that their company might see some of either the current or next wave of investment as a junior exploration company, Killi Resources CEO Kath Cutler said she had hope they would.

“It’s been a reasonably slow start in 2024 for juniors, with not a huge amount of investment, specifically in gold and copper, right at the tail end of the market,” she observed.

“But with this increase in the current high gold price, and the rising copper price, I think we’re seeing the majors consider their positions, and specifically the inventories and their strategies for gold moving forward.

“I think investment is probably not high for retail at the moment but what we’re going to see is some industry coming in with those majors investing in junior companies with really good exploration projects.”

Killi Resources is a fine example of what can be with the company recently executing an Option and Joint Venture Agreement with an indirect wholly owned subsidiary of Gold Fields.

The deal allows expenditure of up to $13 million by Gold Fields to earn an 85 per cent interest in Killi’s West Tanami project, located in the Kimberley region of Western Australia.

“They not only completed that joint venture earning stage agreement they’ve also put half a million dollars into the company as well,” Cutler continued.
Raising money is one aspect, then how a company spends it is also important to consider.

Andrew Corbett of spoke of how his company, Kingston Resources was making its operation dollars go further at the Mineral Hill mine it had purchased in 2022.

Corbett explained the company has around three years of cost data to examine, during which time the expense of reagents, an ingredient not often spoken about, has risen between 30 to 50 per cent higher.

“That’s a huge cost increase that the industry has to absorb, he said.

“That has settled down, those reagents haven’t dropped in price, but they have stopped going up.

Corbett described how the company had expanded its workforce to over 100 people bringing with them a hefty wages bill.

“Wages in 2022-23 were seeing seven to eight per cent increases depending on key positions,” he added.

“Currently it is around 2.5 to three per cent increases this year. Again, still going up, but stopped increasing in terms of growth.”

Equipment is, of course, important to any operation and Corbett indicated it was somewhat easier to purchase what was needed at present.

“You can actually get a bit of equipment now, he said.

“The prices of equipment are still very high, but they have settled down.”

Corbett made a point of his company being owner-miners and not using contractors.

“When we had contract pricing, they were exorbitant in the past two or three years, but they have definitely changed now.”