International commodities consultancy Core Consultants states that African mining jurisdictions can create investor awareness through initiatives that have been successfully carried out in Canada.
“Canada has successfully raised investor awareness through its support of junior mining. As a country, this support is evident in the number of junior mines listed on the TSX,” says Core Consultants MD Lara Smith.
She adds that, in terms of spending on mineral exploration, the leading jurisdictions are Quebec, followed by Ontario and British Columbia, which “account for two-thirds of exploration and deposit appraisal expenditures”.
The Canadian government provides significant support in terms of exploration and overall investment in the mining sector, including federal geomapping, informed land use and resource investment decisions for potential investors.
Smith adds that the geoscience initiative also provides the Canadian industry with the next generation of geoscience technology and the latest innovative techniques for more effective targeting of deep deposits.
“Moreover, there are many research initiatives whereby Canadian mining industry body Association of Manière du Quebec (Quebec Mining Association) identifies, develops and researches projects and opportunities,” Smith tells Mining Weekly.
She cites the Canadian mineral processing organisation COREM, which works to improve the competitiveness of the mining sector through technological innovation, as an example.
A trade advantage has been created with the Comprehensive Economic and Trade Agreement between Canada and Europe and free trade agreements with 51 countries provide favourable trading conditions with more than 60% of the global economy.
“Canada has also signed Foreign Investment Promotion and Protection Agreements (FIPA) with 37 countries. These agreements outline the conditions that signatories must put in place to provide a more transparent and predictable climate for investors. As far as I am aware, South Africa is not part of the 37 listed countries with a FIPA agreement,” Smith says.
Canada has tax incentives that enable a principal business corporation whose business is directly related to mining or oil or gas to obtain financing for expenditures on mineral exploration and development. There are also predictable wage increases, policies and royalties that encourage investment in Canadian mines.
Moreover, Smith notes that Canada has a very active retail buyer’s market for junior mining companies. There are also public relations (PR) companies that specifically cover these shares, promote investor awareness and assist in improving share price liquidity. “This helps make listing on the TSX very attractive.”
These systems can be successfully implemented in the African mining industry, Smith states, specifically citing the tax incentives and controlled costs with specific reference to wages. She notes that geological mapping in African countries can be updated.
Smith says Core Consultants, through its Core Communications service, can assist mining companies in improving investor awareness and improving share price liquidity.
“The company works similarly to some of the PR companies in Canada, which promote junior mining stocks.”
The consultancy assists mining companies in developing ‘data-rich’ content on their business or projects and supplies this content to premium news websites. “Simultaneously, we promote companies across various social media platforms and on Core Consultants’ proprietary database.”
The company also assists in creating webinars and investor days to foster awareness and interest in a specific project: “If the project has merit and is well promoted, investor interest usually follows,” Smith concludes.