Australian junior miners are turning to crowd funding to battle a lack of investor interest, confidence and funding.
Small companies are turning away from traditional sources of capital to modern solutions as a means of overcoming the initial difficulties of finding investors in the industry. Funding is usually sourced from deep industry connections, an advantage junior miners do not have.
Mining executives, Cameron McLean and Joe Treacy, are planning to introduce crowd funding into the mining sector to assist junior exploration companies source seed capital.
They told The Australian, “Early-stage explorers typically tap networks of industry insiders and connections for their initial funding, with those entry-level investments often enjoying significant returns if those ventures ever make it to the Australian stock exchange.”
They are also looking to crowd fund $500,000 for a new asset mining website which will introduce crowd funding into the resources sector. The site, Mineral Intelligence, will allow companies to list mining projects, free of charge, to connect with subscriber companies.
Currently, legal limitations under the Corporations Act restrict crowd funding opportunities in Australia. However, these limitations are expected to ease under the Turnbull government.
Crowd funding raises finance by asking a large number of people to contribute small amounts of money towards a project.