Tough year ahead for getting exploration money, say accountants

 
Canadian junior mining exploration companies are in for a tough year in 2009 and some may run out of cash.
Many of the top 100 companies in PricewaterhouseCoopers' junior mining report will be affected by slow equity markets as this year shows little relief in sight, said the international accounting firm in its analysis of junior mining trends on the TSX-Venture Exchange.
As sources of financing dried up in 2008, overall cash in this segment of the mining industry was down $443 million and liabilities increased $1.1 billion. Despite the decline, spending itched upward with $202 million in 2008 (compared to $184 million in 2007), mostly on capitalization of properties with new plants and equipment.
"Those with proven reserves may be able to weather the financial storm" either by being scooped up major miners or by raising debt-financing "with stringent repayments terms and hedging obligations," stated the report.
Of the top 100 mining companies tracked, 42 were involved in gold mining and/or exploration.