Persevere, don’t shoot too high and bide your time.
That’s the message to would-be cavalier junior miners looking to take on the world with their new prospect.
It’s come from Metro Mining which is about to make a round dozen the number of shipments from its Bauxite Hills mine on Cape York to China.
Managing director Simon Finnis is to deliver an industry update at Diggers and Dealers in Kalgoorlie today (Wed 8 Aug 18).
Metro Mining has a four-year, seven-million-tonne binding offtake agreement with Chinese aluminium company Xinfa Group and secured other non binding letters of intent recently with Lubei Chemicals and SPIC for additional material sales.
The development period of two and a half years had been uncomfortable and too long, Mr Finnis said, but the minimal sovereign risk reputation associated with doing business with Australian companies went a long way to underpin its success.
“It looks very difficult; I guess particularly in Australia, very, very difficult,” he said. “I would say there’s lots of ways you can improve but the bottom line is, at least in Australia, once you’ve done the groundwork and you’ve got your permits just you’ll be in business for a long time.
“Everyone outside of Australia recognises that. Once you’re in production we’re a very low-risk jurisdiction, it just takes a long time.
“I think the benefits far outweigh the challenges but they really have to, I’m not saying make it (the approvals process) easier, but streamline it because small companies can’t actually do it most of the time. You run out of money.
“Bigger companies can be patient, it doesn’t matter if it takes two years or 10 years, they’ve got the money and the time. Smaller companies have to keep raising money. To do that time and time again saying, ‘we’re getting permits, we’re getting permits,’ you run out of money.”
Describing the prospect of developing a mine as, ‘not for the faint hearted’, Mr Finnis said junior miners needed to keep perspective.
“I think if you’ve got a good project you’ve got to persevere, but junior miners probably shouldn’t be trying to develop billion dollar projects,” he said
“Find something that you can develop. This (Bauxite Hills) is a $35 million capital project, that’s something a junior miner should be doing and then you can grow from there there and you need a big one next or the one after.
“I think trying to start off on trying to raise money from a small market cap for five or six hundred million dollars is too much.”