Data & Analysis

CVCA Q3 2017 Quarterly Exclusive: Digging Into Canada’s Mining & Resources Investment

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This article is part of a new series, CVCA Quarterly Exclusive, written and published by the Canadian Venture Capital and Private Equity Association. This series provides an analysis of the CVCA’s most recently published VC & PE Canadian Market Overview through expert commentary and perspectives.

Forty-four private equity deals closed in the first three quarters of 2017 in Canadian mining and resources companies with a total value of $2.3B. Sector deal volume is up compared to the entire year in 2013 when only 24 deals accounted for only $1.4B. The $2.3B dollar mark reached in Q32017 YTD is a highwater mark since 2013.

According to the Mine 2017 report by PwC, Canada’s largest mining companies played a prominent role in the sector’s emerging global recovery that began in 2016.

Maxime Guilbault, Senior Manager, Assurance at PwC asserts in the report that Canada maintains it’s position as a leading target for mining and exploration.

By being the top destination for exploration in the world, Canada is able to stay active when it comes to major future global mining projects, keeping the country a preferred mining target from an operations standpoint as well as displaying Canadian miners’ exploration skills and expertise.”

The PwC report explains that exploration dollars have poured into Canada at a faster rate than anywhere else in the world in recent years. The Canadian mining industry attracted 14% of the total global exploration investments in 2017.

In April 2017, CVCA member Waterton Global Resource Management closed a joint nickel venture with RNC Minerals. In the deal, Waterton acquired a 50% interest in Dumont Nickel Project for CAD $30M. Waterton and RNC will each inject US$17.5M (for a total of USD $35M) into a newly established limited partnership that will own and advance Dumont, and seek to acquire high quality nickel assets globally.

The Waterton Global Resource Management deal is a testament to the strong performance of the sector.

The sector in Canada is experiencing a strong partnership of capital and expertise. And, as PwC points out, this is creating an attractive climate for the future.

In the report, PwC says, Canada continues to be a leading destination for mining in the world, both in terms of raising capital and exploration, continuing to play a part in many of the major future global mining projects.

Continued investment allows Canada to continue to attract a strong talent pool within the industry, giving Canada the momentum to remain strong contender in a strengthening industry.

To read more about Canadian private equity activity YTD in 2017, read the full CVCA Q32017 VC & PE Canadian Market Overview here.