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Alternative Financing in The Mining Industry PDF
Alternative Financing in The Mining Industry PDF
3 things you
need to know
about alternative
financing in the
mining industry
www.pwc.co.uk/mining
PwC helps organisations and individuals create the value theyre looking for. Were a network of firms in 158 countries with more than 180,000 people who are committed to delivering
quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com.
This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained
in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information
contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility
or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.
2013 PricewaterhouseCoopers LLP. All rights reserved. In this document, PwC refers to the UK member firm, and may sometimes refer to the PwC network. Each member firm is a
separate legal entity. Please see www.pwc.com/structure for further details.
130709-141848-NM-OS
Contents
Three things you need to know
about alternative financing in mining
p4
p5
p6
p12
p14
Conclusion
p16
Contacts
p19
3 things you need to know about alternative financing in the mining industry Alternative financing in mining
Equity financing
Public equity
(IPOs/FOs)
Strategic
investor
Private/state
owned investor
Financial
investor
Convertibles
Public debt
Corporate
bonds
Senior
facilities
Debt financing
Private debt
Project
financing
Asset financing
Alternative
funding
Royalty
financing
Stream
financing
3 things you need to know about alternative financing in the mining industry Alternative financing in mining
1. Strategic and
financial investors
the rise of South Korea
3 things you need to know about alternative financing in the mining industry Alternative financing in mining
16%
14%
12%
10%
8%
6%
4%
2%
0%
01-Jan-12
01-Jan-11
01-Jan-10
01-Jan-08
01-Jan-09
200
180
160
140
120
100
80
60
40
20
0
01-Jan-07
% of investment
10
15
20
25
30
35
US$ bn
Target continent (where parent is based)
Australia
Africa, ME and Central Asia
Asia
North Americas
Central and Latin America
Europe
3 things you need to know about alternative financing in the mining industry Alternative financing in mining
6
4.5
3
$1,000m+
$500m to
$1,000m
$200 to
$500m
$100m to
$200m
$75m to
$100m
$50m to
$75m
$25m to
$50m
$10m to
$25m
1.5
Nation
No. of
transactions
Size of transactions
(US$m)
Average value
(US$m)
China
84
25,850
308
Chile
2,900
1,450
South Korea
16
2,188
137
Utd Arab Em
2,000
2,000
Russian Fed
1,788
358
Kazakhstan
1,347
674
Thailand
1,305
326
France
1,035
517
Singapore
643
214
Czech Republic
514
514
40
35
30
25
20
15
10
0
No.
10
7.5
<$10m
Size of activity
US$bn
3 things you need to know about alternative financing in the mining industry Alternative financing in mining
Australia
Indonesia
Chile
Canada
Panama
Mexico
Philippines
Niger
South Korea
3 things you need to know about alternative financing in the mining industry Alternative financing in mining
10 3 things you need to know about alternative financing in the mining industry Alternative financing in mining
3 things you need to know about alternative financing in the mining industry Alternative financing in mining 11
2. Convertible bonds
coming to the UK
2010
Loans
Bonds
Convertibles
Source: Thomson One, PwC Analysis
12 3 things you need to know about alternative financing in the mining industry Alternative financing in mining
2011
2012
6
5
4
2
1
0
2009
2010
2011
2012
Loans
Convertible bonds
2.5
160
2.0
140
120
No.
100
80
60
7
9
15
11
34
1.5
51
1.0
13
16
27
40
20
14
3
16
32
$US bn
US$bn
41
0.5
44
25
0
2009
2010
2011
2012
Other
Australia
UK
Canada
USA
Total proceeds
3 things you need to know about alternative financing in the mining industry Alternative financing in mining 13
3. Royalty and
streamingfinance
14 3 things you need to know about alternative financing in the mining industry Alternative financing in mining
2012
$1.7
2011
$1.6
2010
$1.2
2009
$1.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
US$ bn
Source: Review of annual financial statements of Silver Wheaton Corp, Sandstorm Gold Ltd, Sandstorm
Metals Ltd, Blackrock World Mining Trust plc, Premier Royalty inc, Callinan Royalties, Abitibi Royalties,
Bullion Monarch Mining, Virigina Mines, Franco-Nevada, Anglo Pacific Group, Royal Gold, Gold Wheaton
3 things you need to know about alternative financing in the mining industry Alternative financing in mining 15
Conclusion
16 3 things you need to know about alternative financing in the mining industry Alternative financing in mining
3 things you need to know about alternative financing in the mining industry Alternative financing in mining 17
Contact us
Visit our website:
www.pwc.co.uk/mining
PwC firms help organisations and individuals create the value theyre looking for. Were
a network of firms in 158 countries with close to 180,000 people who are committed to
delivering quality in assurance, tax and advisory services.
PwC is a leading adviser to the global mining industry, working with a wide variety of
explorers, producers and related service providers to ensure we meet the challenges of the
global mining industry into the future.
Our strength in serving the global mining industry comes from our skills, our experience,
and our seamless global network of dedicated professionals who focus their time on
understanding the industry and working on solutions to mining industry issues.
For more information on this publication or how PwC can assist you in managing value and
reporting, please speak to your current PwC contact or telephone/e-mail the individuals
below who will put you in contact with the right person.
Author
Jonathan Lee
Deals
Telephone: +44 (0) 207 212 2468
Email: jonathan.m.lee@uk.pwc.com
Contacts
Jason Burkitt - UK mining leader
Telephone: +44 20 7213 2515
E-mail: jason.e.burkitt@uk.pwc.com
Mark Binney - UK deals
Telephone: +44 20 7804 0855
E-mail: mark.binney@uk.pwc.com
Nicola Corp - UK tax deals
Telephone: +44 20 7804 4732
E-mail: nicola.corp@uk.pwc.com
Alison Baker - UK assurance
Telephone: +44 20 7804 3314
E-mail: alison.c.baker@uk.pwc.com
18 3 things you need to know about alternative financing in the mining industry Alternative financing in mining
Kameswara Rao
India
Partner
T: +91 40 6624 6688
E: kameswara.rao@in.pwc.com
Jose Almodovar
Mexico
Partner
T: +52 (55) 5263 6000 ext 7082
E: jose.almodovar@mx.pwc.com
Fernando Gaveglio
Peru
Partner
T: +51 (1) 211 6500 ext 7046
E: fernando.gaveglio@pe.pwc.com
Ken Su
China
Partner
T: +86 (10) 6533 7290
E: ken.x.su@cn.pwc.com
Colin Becker
Chile
Partner
T: +56 (2) 940 0016
E: colin.becker@cl.pwc.com
Michael Goenawan
Indonesia
Partner, Deals
T: +62 21 5289 0340
E: michael.goenawan@id.pwc.com
Ronaldo Valino
Brazil
Partner
T: +55 (21) 3232 6015
E: ronaldo.valino@br.pwc.com
Mark Binney
UK
Partner, Deals
T.+44 (0)20 7804 0855
E: mark.binney@uk.pwc.com
Tim Goldsmith
Australia
Partner
T: +61 3 8603 2016
E: tim.goldsmith@au.pwc.com
Simon Venables
South Africa
Partner, Deals
T: +27 11 797 5660
E: simon.venables@za.pwc.com
Hein Boegman
South Africa
Partner
T: +27 11 797 4335
E: hein.boegman@za.pwc.com
John Nyholt
Canada
Partner, Deals
T: +1 416 815 5086
E: john.nyholt@ca.pwc.com
Leonardo Viglione
Argentina
Partner
T: +54 (11) 48504690
E: leonardo.viglione@ar.pwc.com
Jason Burkitt
UK
Partner
T: +44 (20) 7213 2515
E: jason.e.burkitt@uk.pwc.com
Jock OCallaghan
Australia
Partner
T: +61 (3) 8603 6137
E: jock.ocallaghan@au.pwc.com
Sacha Winzenried
Indonesia
Partner
T: +62 21 5289 0968
E: sacha.winzenried@id.pwc.com
John Campbell
Ukraine
Partner
T: +380 (44) 490 6777
E: john.c.campbell@ua.pwc.com
Steve Ralbovsky
U.S.A.
Partner
T: +1 (602) 364 8193
E: steve.ralbovsky@us.pwc.com
3 things you need to know about alternative financing in the mining industry Alternative financing in mining 19
www.pwc.co.uk/mining
This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information
contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness
of the information contained in this publication, and, to the extent permitted by law, PwC does do not accept or assume any liability, responsibility or duty of care for any
consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.
2013 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity.
Please see www.pwc.com/structure for further details.
130709-141848-NM-OS