Exploration funding tight, but mining prospects look promising: Australians dig what mineral properties Northern Ontario has to offer.

• Author: Ross, Ian
• Position: THUNDER BAY

The road to riches remains a rocky one for junior mining companies. Financing to do mineral exploration continues to be tight for those on the upstream end of the industry.

While money doesn't appear to be an issue for larger, more advanced exploration plays, it's the smaller projects at the grassroots stage that are being neglected, according to Garry Clark, executive director of the Ontario Prospectors Association (OPA) in Thunder Bay.

"If I had a project that could sustain a $5-million exploration project, I could raise it. But I would have difficulty raising something south of $1 million."

Commodity prices for base metals remain relatively healthy, but investor interest is veering away from the methodical and calculated risk of exploration mining stocks toward the fast buck and quick fix of the legalized marijuana sector.

A recent BDO report indicated Canadian cannabis stocks jumped from $43 million to $770 million from the first half of 2016 to the first half of 2017.

For junior miners, financing tanked, falling 58 per cent for TSX and 23 per cent for TSXV-listed companies between 2017 and 2018.

Northern Superior Resources, a Sudbury gold explorer, landed an option agreement last November with Yamana Gold to develop its high-grade TPK gold-silver-copper property, west of the Ring of Fire.

But those victories are few and far between.

"Partnerships are important to be able to move a project along," said John Mason, the mining services project manager with the Thunder Bay Community Economic Development Commission.

A certain percentage of companies are raising money through partnerships or boutique banking, instead of the typical equity approach, a trend that began to emerge early last year, he said.

"It's still a very difficult market. Companies have had to be creative by getting involved with royalty or streaming deals." Clark stressed how important it is, for the industry's health, to have a variety of cashed-up mineral properties in the project pipeline, at all stages of exploration, to gradually feed the major mining companies.

Exploration for base metals, he cautioned, is lagging behind.

"We're barely keeping up, replacementwise," said Clark.

"We're down to having one copper-zinc deposit in Ontario," alluding to the Kidd Creek Mine in Timmins, scheduled for closure in 2023.

But Clark notices there's growing interest coming from offshore, specifically Australia.

"People are still looking for high-risk, high-reward projects and they...