Anyone who has been involved in financing a resource exploration company over the past several years is well acquainted with how challenging it is to raise money on acceptable terms. In such environments, market participants seek out innovative solutions. In the flow-through market, more and more players have recognized that this means the better pricing, minimal dilution and expanded universe of buyers that PearTree’s structured flow-through financing options deliver. We’re proud to be the sponsor of this report unique to the flow-through market and of the leading position that PearTree has assumed in that market. With an annual growth rate of over 25% over the last 3 years (and expected to continue at that pace for at least 3 more), PearTree has become a significant contributor to the junior exploration market.
As you will see in the following presentation, despite a continued downturn in both the number and average size of financings, PearTree participation continues to grow. Since early 2012, the junior mining sector has experienced higher than normal volatility, which has made capital raising activities more difficult. Both the number of financings and average deal size have dropped annually since 2012 highlighting the difficulties in exploration financing. Unfortunately this trend continues to be downward sloping.
Despite the fact that the ‘health’ of the market as determined by the Oreninc Index is declining, share price premiums have increased in 2014, reducing dilution and increasing the amount of money available for exploration activities. As the attached data highlights, PearTree is a key contributor to this market trend.
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