Can you provide an overview of National Bank Financial’s mining and metals practice?

National Bank Financial provides a full suite of services and we have significant capital committed to the sector. We play a leading role in corporate lending, project financing, equity financing and advisory work, including M&A, and non-core asset sales. Other services include hedging and pre-paid metal sales. In Ontario, we work with all the major players and many operating mines in key districts like Geraldton and Timmins. What recent trends have you noticed across your various services in the mining sector?

Clients still need financing, but equity raising can be less attractive than in the past due to lower trading multiples. Thus we are increasingly being asked to help by lending or through creative solutions like At-The-Market financings (ATMs), which allow companies to raise funds steadily throughout the year without impacting share prices as traditional deals might. Prepaids, where some future production is sold upfront, have also gained in popularity. How can Canada improve mining financing, and what is your advice for juniors given the current challenges?

I believe Canada continues to be one of the best mining finance environments globally in part due to flow-through shares and mineral exploration tax credits. The challenge lies in how many institutional investors have shifted to directly investing in commodities, favoring ETFs and using quantitative management over individual stock picking. For juniors, a compelling exploration story is vital. There is no substitute for making meaningful discoveries when it comes to success. Recent standout examples include Filo Corp in Argentina, Reunion Gold in Guyana and Snowline Gold in The Yukon. Mining companies that consistently deliver on promises, meet guidance, increase cash flow per share and return capital to shareholders maintain better multiples. If organizations are professional, transparent and under-promise and over-deliver, they can still attract retail and institutional investors. Is your M&A advisory practice seeing increased activity in Canada?

Yes, the mining sector remains fragmented and in need of consolidation. Some juniors possess strong assets but struggle with financing and development due to limited market caps. Mid-tier companies with strong balance sheets and cash reserves, but lacking near-term development projects, can merge with these juniors, creating synergies. Additionally, institutional investors value scale, which motivates companies with similar cultures and assets to combine. We have seen significant M&A activity, such as First Majestic's deal with Gatos Silver, where we advised First Majestic. We also worked on the Filo acquisition involving BHP and Lundin Gold. In 2024, over half of our advisory mandates were with new clients, reflecting our growing franchise. Who is filling the financing gap for Canadian miners, and does this create opportunities?

Private equity is playing a larger role financing companies in place of traditional investors. Larger corporations are also investing, often taking 10–19% stakes in juniors to fund exploration and maintaining insight into the results. This approach allows them to spread exploration budgets further by backing juniors to undertake the work. For projects stalled by junior financing constraints, private equity and mid-tier companies often step in, either acquiring the assets outright or providing financial backing to advance the developments. Is predatory shorting a significant issue for juniors?

Predatory shorting can occur, especially targeting companies expected to raise financing. Shorting strategies often anticipate large equity financings, where shorts can cover their positions by participating. However, companies are countering this with creative financing solutions that limit opportunities for shorts to profit, like streams, ATMs, or smaller private placements. What opportunities does National Bank Financial see in the mining and metals market?

Over half of our advisory and equity financing work last year was with new clients. We are now doing more in Africa, collaborating with Australian companies and projects, working throughout the Americas, and engaging in emerging markets like Saudi Arabia. We are also building relationships with investors, including sovereign wealth funds in the Middle East. What are National Bank Financial mining and metals team’s goals for 2025?

A key highlight is our leadership in Artemis Gold’s Blackwater project financing, which is nearing completion. This marks our first major project finance endeavor, and we plan to do more of these in addition to our traditional activities.