Firms in the mining and resource sector represent a major segment among growth companies, something also reflected on the NEX Exchange Growth Market. Investors in these companies typically benefit from further returns on top of their initial investment when the firm moves from exploration to proving its resources or going into production.
But as with all early stage investments, the risks of investing in resource stocks can be high. For example, gaining local government permissions to carry out exploration and mining activity can be a lengthy and uncertain process.
Yet mining and resource firms continue to be popular among investors. The key drivers appear to be the potential for high yields and the opinion that demand for raw materials from the world’s emerging economies will continue to climb. This correlates with the notable fundraising success of companies in this sector quoted on NEX Exchange, especially in the last few weeks.
Australian-based NQ Minerals recently announced that it raised funds from family offices and institutional investors, accessing international sources of capital.
Equatorial Mining & Exploration raised a combination of equity and unlisted debt notes with plans to acquire a Mexican exploration project, subject to completion of due diligence.
Others include IMC Exploration Group, which recently started a comprehensive exploration programme and drilling on its base metal licence in Ireland, while Block Energy raised just over £200,000 to replace debt and strengthen its balance sheet.
For further information on the host of firms quoted in our mining and oil and gas sectors see companies & prices.