Hundreds of small mineral exploration companies may have their stock delisted by Canada's TSX Venture Exchange in the coming month. As commodity prices boomed in the past decade, a flood of new issuers swelled the ranks of the Venture, but the money has dried up over the past 2 years. Hardest hit are the Venture-listed, exploration-stage companies that depend on equity financing to develop their properties to the point where they can build a mine or sell the asset to a major. While the mining sector has always been subject to boom and bust, the potential shakeout could be especially damaging this time.
I have been a senior resources analyst following the fortunes of the mining and energy sectors for the past 25 years - previously working with stockbroker Intersuisse and financial group Fat Prophets. I am also Executive Director, Mining & Metals...
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Highly likely we see a similar result on the ASX in the coming months. Plenty of quarterlies showing low cash balances and in many cases not even a full quarter of working capital. Expect plenty of consolidation talk at diggers this week